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Contributions To The Family’s Wealth When Dividing Matrimonial Finances

Posted on Thursday, 12th March 2015 by

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Many client’s will often say that they have worked long hours in order to earn a high salary and build a good pension, whilst their spouse has stayed at home looking after the children and therefore they should be able to keep a larger share of this wealth and pension. However this is not the case, since the case of White v White in 2000 it has been well established that a spouse who stays at home and looks after the home and children has made an equal contribution to the spouse who goes out and works long hours etc.

The court will, though, consider an argument of a “special contribution”. This will usually be where a spouse’s special skill/effort or genius has allowed the parties to accumulate a large amount of assets. The difficulty is what level of skill/effort or genius is required and what degree of assets counts as ‘exceptional’? The court has very deliberately not placed restrictive guidance on these points. However in Lambert v Lambert an amassed wealth of £20 million was not considered exceptional. Recently the special contribution element has been examined in 2 cases, SK v TK and Cooper-Hohn v Cooper-Hohn.

In SK V TK the husband was a technology entrepreneur. The net assets were approximately £18 million. Moor J stated it would not be accurate to describe him as a “genius”. Equally, whilst the extent of his business success is rare and something to be applauded, it cannot be said to be “exceptional”. In this case the principle of equality was not departed from.

In Cooper- Hohn v Cooper-Hohn the husband was a financial investor and had been incredibly successful generating assets of between $1.35 – $1.6 billion and a charitable foundation of $4.5 billion.

Roberts J asked the following questions in order to reach a conclusion:

i. Can it properly be said that he is the generating force behind the fortune rather than the product itself?

ii. Does the scale of the wealth depend upon his innovative vision as well as on his ability to develop those visions?

iii. Has he generated truly vast wealth such that his business success can properly be viewed as exceptional?

iv. Does he have a special skill and effort which is special to him and which survives as a material consideration despite the partnership or pooling aspect of the marriage?

v. Would it, in all the circumstances, be inequitable for me to disregard that contribution?

She answered each of these with a ‘yes’ and so the principle of equality was departed from.

So what is a special contribution? Recent precedents shows that judges are considering how the parties’ wealth is accumulated, not just the size of the wealth. However it seems that assets must far exceed 20 million. Other than this there is no guidance, leaving practitioners and parties struggling.

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The information provided in all of our blogs reflects only a narrative of some elements to consider on the topic. The blogs do not contain considered legal advice and should not be relied upon as advice. Please see our website terms and conditions for full details of our disclaimer. If you are interested in obtaining advice, please contact one of our lawyers who will be happy and able to advise you on your own particular circumstances.

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