Jennifer Aniston and Justin Theroux Split – What Are Some Of The Issues In HNW Divorce?
Last week it was announced that Hollywood golden-girl Jennifer Aniston and her actor/screenwriter husband, Justin Theroux had decided to end their marriage. The end of a marriage is (usually) devastating for anyone, regardless of how wealthy and/or famous they may be. When it comes to high-net-worth divorce however, the financial stakes are high, and the standard of living enjoyed by the family as a whole plays a part in how matrimonial property and assets will be divided.
There is no doubt, when it comes to divorce, the rich do things differently. In January 2018, the BBC released a documentary entitled “Millionaires Ex-Wives Club”, which provided a detailed (and surprisingly sympathetic) exposé of the types of issues involved in high-net worth divorce. As one family solicitor comments in the programme:
“If you are a woman who got married when you were in your mid-twenties, and you’ve never got a job and never earned a paycheck, and your husband does not want to be married to you anymore, for whatever reason…and he doesn’t have to come up with a good reason, he just has to tell you he does not want to be married to you anymore…that is probably enough to induce panic, blind panic…”
Below are some of the legal issues which can arise in high-net-worth divorce that often are not present in cases where the financial stakes are not so high.
Wealthy international couples can end up in court prior to a divorce petition even being filed, if they and their solicitors do not carefully consider and manage potential disputes over which jurisdiction the divorce process should proceed in.
London is known as the worldwide capital of divorce because, historically, the courts have shown themselves to be generous to the financial needs of the wife in high-net-worth divorce cases (providing lifelong spousal maintenance for example).
Often time is of the essence when it comes to ensuring divorce proceedings take place in the most advantageous jurisdiction for a solicitor’s client, as often the first country the divorce is filed in has jurisdiction.
Broadly speaking, a court in England and Wales only has jurisdiction if:
- the court has jurisdiction under the Council Regulation (EC) 2201/2003 (also known as Brussels II bis), or
- if no contracting state has jurisdiction that either party is domiciled in England and Wales on the date when the proceedings are begun
Establishing whether a person is domiciled in a particular jurisdiction can be complex. Your family law solicitor can provide you with the best advice. The key is to contact them as soon as you are thinking of filing a divorce petition, so they can deal with matters of jurisdiction with urgency.
According to reports, Jennifer Aniston and Justin Theroux had an ironclad prenuptial agreement, designed to protect Ms Aniston’s $200 million fortune.
In the UK, while prenuptial agreements are not legally binding, the court is likely to take them into account and uphold them, provided certain safeguards are in place. These include:
- both parties received independent legal advice
- the agreement is entered into no less than 21 days prior to the marriage taking place
- both parties have made a full and frank disclosure of their assets
- there has been no major life change that would render the agreement unfair (for example, the birth of a child)
- the agreement is fair and realistic
For couples who are bringing significant assets into a marriage, a prenuptial agreement provides protection and security over hard-won assets. As a family solicitor, one of the hardest conversations I often have to have with clients involves informing them that they are likely to lose at least half of their fortune in a divorce. By entering into a fair, well-drafted prenuptial agreement, which is constantly updated to reflect the changes in your life, the financial settlement is more likely to be dictated by decisions you and your spouse made prior to getting married, than by the court.
Forensic accountancy and freezing orders
Although in all divorce cases, both parties are required by law to make a full and frank disclosure of their assets, it will come as no surprise that such accounts are not always freely forthcoming. And in high-net-worth divorce cases, whereby one spouse may have access to expert advisors who can assist them with moving money off-shore and hiding in in shell companies or intricate trusts, uncovering true net-worth can be a challenge.
It is the job of a forensic accountant to trawl through documents, accounts, and company set-up files in order to track down hidden assets. However, there is always the danger that whilst this process is being completed (and it can take many months, sometimes years), the wealthier spouse will hide or dispose of assets to avoid them from becoming part of the financial settlement.
To prevent this, the financially weaker party can apply to the court for a Freezing Order. This is an interim injunction which stops a person or persons (including third parties) from dealing with and/or disposing of assets subject to the order. Assets that can be subject to a Freezing Order include, bank accounts, shares, investments, land, and other property (such as cars, art and antiques).
A Freezing Order is an equitable remedy. This means the granting of the injunction is entirely at the court’s discretion. In addition, to succeed in applying for a Freezing Order, the doctrine of “he who comes into equity must come with clean hands” applies. This means, to request a Freezing Order, you must be free from any wrongdoing. The remedy may also be denied if you delay applying for the injunction unnecessarily (known as the doctrine of ‘laches’ – delay).
High-net-worth divorce can bring up complex legal issues. It is therefore imperative you seek expert legal advice from a solicitor who understands