Should boardroom squabbles ever make their way into the bedroom? Not if the recent spate of high profile co-business divorce cases is anything to go by. The well documented cases of oil trader Michael Prest and his wife Yasmin, Ford boss David Thursfield and his wife Linda, Scot and Michelle Young and billionaire philanthropist Sir Christopher Hohn and his former wife Jamie Cooper-Hohn have firmly turned the spotlight on the issue of marital discord and corporate asset division.

In all of these cases, problems have arisen as a result of one party believing that the other party has inaccurately declared their assets. In the UK, divorcing couples are required to complete a Form E, which is the financial statement that details their assets, liabilities, living costs and income. It is the primary document that the courts use to decide the financial division of assets.

However, whilst Form E arguably has many plus points in its favour – indeed, many believe it to be the best method to date that the legal system has implemented regarding full financial disclosure – one of the major drawbacks is that it only requires the previous 12 months of information to be declared.

This means that some ‘forward thinking’ spouses who are planning to divorce their husband or wife, may begin to divert assets long before they officially call time on their relationship. As a result, these assets may not then be taken into consideration when settlements are being made, unless the court can be persuaded to allow much more extensive enquiries to be made.

As with all divorces, the dividing of assets plays a key role, but when a couple are in business together, or one of them has their own company, the issues become even more complicated. The business will be seen as an asset, which means that it’s value will be taken into consideration when the couples’ assets are being divided up. If there is found to be a surplus of resources once financial needs have been met, then further thought will be given as to how this will be distributed.

When deciding whether the assets can fairly be divided in a way that allows for a clean break between the parties, the value of the business, and any cash that might reasonably be extracted from it, will be amongst the factors taken into account. This means that neither spouse can make any further financial claims on the other once they are divorced. Alternatively, if there is insufficient capital available to fund this, it may be that the income produced by the business will continue to fund maintenance payments from one spouse to the other.

At Jones Myers, we have a number of clients involved in such situations and we always recommend that those clients who aren’t yet married, but who are in business together, draw up a pre-nuptial agreement.

A pre-nuptial contract has a provision that allows assets such as a business – which can have been acquired, started up or inherited – to be included within the agreement. This means that the parties can agree how the business should feature in the financial issues to be resolved upon a future separation or divorce. However, the agreement must be drawn up with consent of each party, who each have the benefit of legal advice, full mutual disclosure, and a reasonable time prior to the proposed marriage – otherwise the court may well discount it.

Ultimately, nobody wants to kill the ‘golden goose’ and destroy a family’s main source of income, so the end result has to be fair to both parties, with the interests of children taking a priority.

Do you think Form E should be reviewed? Should there be a time restriction on the listing of assets? Would you consider signing a pre-nuptial agreement?

If you have any questions or concerns about your divorce and are worried about how your assets should be divided, please call us on 0113 246 0055, leave us a comment below or drop us an e-mail.

The post In business with your soon-to-be-ex? How to protect your biggest asset appeared first on Jones Myers.

Contrary to perception that ‘common law marriage’ is a legal entity, the harsh reality is that if the couple splits, one party could be left penniless and homeless.

In many areas of life from buying a car to safeguard our health, property and even our pets we take out insurance to cover worst case scenarios. So why when it comes to cohabitation – now the fastest growing family type in the UK – do we leave ourselves vulnerable and exposed?

While increasing numbers of couples are signing pre-nuptial arrangements before they marry, people planning to cohabit are often unaware that they could protect themselves with a similar agreement.

It may not be romantic to agree the ‘what if’ scenarios should one partner leave, win the lottery – or die. However, putting in place safeguards in the form of a cohabitation agreement before the furniture is unpacked or even after it can potentially save emotional and financial trauma at a later stage.

If you are among the six million cohabitees in the UK we recommend that you sit down with your partner and consider the following ten key questions:

• How long do you want the agreement to last
• Who has contributed what?
• Who owns what?
• How will monthly outgoings be met?
• What happens if you separate?
• How do you ensure that your children, including any from a previous relationship, are protected financially and otherwise in the event of your death?
• Should a property be bought in joint names and if so in what shares will the ownership be?
• What happens to that property if one of you dies?
• Can the survivor stay in that property forever, or at all?
• When do your children receive your part of the property as their inheritance?

Your answers will be instrumental in formulating a cohabitation agreement with legal and financial advisors. It is important that each party seeks independent legal advice and discloses all financial information in the lead up to signing the agreement, which should be reviewed regularly – particularly as personal circumstances change.

While a cohabitation agreement may not be 100 per cent enforceable, embarking on this arrangement – often achieved through “round-table” meetings within the collaborative process – can reduce the likelihood of cohabitees being left destitute should the relationship flounder.

Jones Myers LLP can help if you or someone you know is about to cohabit. We have considerable experience in drafting cohabitation agreements and, sadly, in dealing with disputes arising from separations where there has been no such agreement.

The post Considering cohabitation? Ten key questions to ask yourself appeared first on Jones Myers.

The notion of the ‘seven year itch’ – the magical term indicating when partners in marriage are deemed most at risk of straying – has officially been consigned to history, if the latest survey information  is to be believed.

A study of 1,500 couples by the parenting website Netmums, found couples are now four and a half times more likely to split after three years than the ‘traditional’ seven. Couples with young children are particularly affected; many are under increasing pressure to balance jobs with home life and to share the responsibilities in a way that satisfies all parties.

It would also be a mistake to assume modern marriage breakdowns mainly affect couples who marry young. This may well have been the case in the past, but today’s economic and career priorities mean that people marry later in life but tend to have children sooner –perhaps before they have had time to cement their own relationship.

Who can forget the iconic image of Marilyn Monroe standing over a subway grating in that famous white dress? It’s rather unfortunate that the hugely successful 1955 comedy film, ‘The Seven Year Itch’ – coupled with the tendency of psychologists to use the phrase as a catch-all term about exiting a long standing relationship – has led to a rather blasé approach to the subject. The study and the reports on it seem to gloss over the emotional impact in favour of the entertainment value of the headline.

It is easy to forget that real people and a plethora of issues accompany marital breakdown. That’s something that the team of collaborative lawyers at Jones Myers have at the core of their ethos – helping real people with real issues. Our approach is not only non-confrontational and geared towards avoiding the courts wherever possible, but we focus very strongly on relationship management in order to achieve the best outcome for all concerned.

The collaborative approach is based on a series of round-table meetings where both parties work out a solution based on a commitment from everyone not to end up in court. Jones Myers has a team of four collaborative lawyers whose role is to help the parties agree on a fair way forward, eliminating protracted arguments and disputes.

If you have an itch – however old – that you need help in scratching, visit our website for more information or give us a call.

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