Divorcees' settlements 'unaffected by fluctuations in wealth'

26 June 2009



Divorcees have been reminded that they will not be entitled to more of their partner's assets should they suddenly see a surge in wealth, the Financial Times reports. This follows executives being told that they will not be able to get themselves out of big money settlements if their finances are depleted.

This report refers to refers to Kim Walkden, who attempted to increase the amount of her divorce settlement from her former husband, alleging that he had failed to declare the true value of his interest in a privately owned timber business. He received $3m when the business was sold in October 2007, whereas only months earlier he had estimated the value of his shares at £216,000. Her case was thrown out of court. "It needs, I think, to be stressed that Mrs Walkden was not obliged to translate the shares into cash. She chose to do so," commented Lord Justice Wall, one of the Court of Appeal Judges.

Sue Andrews, head of family law practice group, comments: "I have yet to read the full report but it would appear that in this case no formal value was placed on the shares at the time of the original proceedings, but Mrs Walkden sought and obtained more of the liquid capital leaving her husband with what one usually describes as the more risk laden assets, his shareholding in the private company.

"This case demonstrates that where you have a private company, other than one which is no more than a vehicle through which a self employed individual works, it is important for the value of the shares to be evaluated by an appropriate expert. In that way both spouses can make a proper assessment about whether they want to retain shares or take more of the liquid assets in lieu. If, however you make the wrong choice, as this case and that of Mr and Mrs Myerson shows, you will be held to your agreement unless you can establish fraud or misrepresentation."

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