January 20, 2012

Would you settle for less?

By Peter Jones, partner

Telephone number divorce settlements often hit the headlines, and this week has been no exception. The ex-wife of Russian oligarch Boris Agrest has won a £12.5million divorce settlement awarded by the London High Court – but Janna Kremmen will be lucky to see a penny of it.

Mr Agrest has gone to great lengths to conceal his considerable assets, estimated at various levels between £30million and £600million, and has previously refused to pay anything to Ms Kremen – or in support of their three sons. In 2001 Mr Agrest even pressured his wife to sign a ‘post-nuptial agreement’ which limited any claim on his wealth to $1.5million (£969,900).

A long-running legal fight followed the eventual collapse of the marriage in 2007. An arrest warrant was issued in May 2010 further to an order that he be sent to prison for non-payment of maintenance, but Mr Agrest’s whereabouts are in fact a mystery.

So, regardless of Mr Justice Mostyn’s scathing denouncement of Mr Agrest’s “foul means” to disguise his wealth, it seems likely that it will nevertheless remain out of the reach of his former spouse.

This case, and many others like it, really does serve to highlight the difficulties of reaching an agreeable financial settlement when a marriage breaks down. Mere mortals with minimal assets and savings face just the same challenges as a Russian oligarch or premier league footballer – although reaching an amicable settlement, perhaps through mediation or collaboration, is almost certainly easier when the parties are not under the daily scrutiny of the tabloids.

It’s also less likely that the ‘average’ husband or wife will go into hiding to protect their assets. The real challenge is in managing the expectations of both partners, especially in the current economic climate where investments and pensions have shrunk and savings all but disappeared. The stagnant housing market, similarly, means that selling a property may not realise the hoped-for cash boost.

To a wife (or husband) looking for ancillary relief from the main breadwinner, my advice is: be realistic. Don’t get over-excited about what you think you might get and consider instead what is realistic. Pushing the boundaries will alienate your spouse and damage the relationship – almost certainly impacting on the future welfare of any children. Push too far and you may end up with nothing but heartbreak, and a pyrrhic victory is no victory at all.

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