Wealthy Parents And Divorce Settlement
Divorce and Finances
Wealthy parents and impact on divorce settlement
In the case of AM v SS, the Husband and Wife had been married for approximately 2 years when they began divorce proceedings.
There was one child of the marriage, a daughter.
The Wife lived in a rented flat in London with the party’s daughter.
The Husband had two main homes, which were located in Cairo and London.
The Husband paid interim provision by way of maintenance at the rate of £5,500.00 per month.
The Wife made an application for financial provision.
The Court had previously determined that the Husband had no interest in the Cairo property nor in the two properties in London, which had been in issue.
The Husband maintained that he had assets which amounted to only a few hundred thousand pounds, including a flat in Maida Vale worth about £1,000,000.00, with equity of £500,000.00 and a reasonable salary of about £100,000.00 net per annum.
However, the Wife argued that the Husband’s assets were the merest tip of a huge family financial iceberg. The Wife stated that the Husband’s father had wealth in the stratosphere, worth billions and that he could reasonably be expected and predicted (due to his past generosity) to make capital available to meet a reasonable claim by her, based on his wealth.
In view of this, the Court needed to determine whether to make an order.
The Court considered whether the Husband’s father would come to the aid of his son and if so whether the case was a “backfill” case or one where the Court could go further and order “new money” to be provided coming from the Husband’s father.
The Court confirmed that the general practice was that even if it was prepared to proceed on the basis that a relative could reasonable by expected to “back fill” to compensate for a share of the visible assets which had previously been removed by the Court Order, it was very unusual to make an order that the relative produce money to meet an award to a former spouse.
The Court found that the Husband’s father would help out, but only to the minimum necessary to relieve his son from visible financial hardship. The Husband’s father would not provide sums unrelated to his son’s present wealth.
In view of this, the Husband’s father’s wealth could be said to amount to a resource which the Court needed to have in the back of its mind when deciding an appropriate order.
However, the Court considered the case to be a “back fill case” and therefore would work closely as it could within the parameters of the assets on the table and in view.
The Court proceeded to make various orders.
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