Inherited Wealth Not Split on Divorce
A recent divorce case has confirmed the general position that when wealth is inherited, it is not normally subject to the ‘equal shares’ rule that applies to assets built up during a marriage.
The case involved a couple who married in the UK in 1991 after an earlier marriage ceremony in Israel in 1987. The wife had inherited shares worth £700,000 at the time of their UK marriage. By the time the marriage had broken up and the financial settlement was being negotiated, the shares were worth £57 million. Although neither of the couple had worked, on account of the income available to them from the wife’s shares, they lived modestly.
The husband’s assets were approximately £300,000, which consisted mainly of the family home, which was transferred to his sole name. He wished to sell that house and to purchase instead a property in Regent’s Park, valued at an estimated £2 million. He also proposed to buy a second home in Israel for £450,000 and a new car costing £60,000, and claimed that he would require maintenance of more than £100,000 per year to fund his lifestyle – an amount which greatly exceeded the couple’s annual outgoings when they were together.
The wife made an offer of £5 million to her husband, but he sought an additional sum to enable him to accomplish his aims. The Court of Appeal rejected his claim, however, holding that the initial offer was based on a generous assessment of his needs.
Click here for a guide to the financial aspects of divorce.
