{"id":861,"date":"2023-05-18T10:00:00","date_gmt":"2023-05-18T09:00:00","guid":{"rendered":"https:\/\/ctt-group.co.uk\/tax-trust\/?p=861"},"modified":"2023-09-27T10:46:33","modified_gmt":"2023-09-27T09:46:33","slug":"protecting-assets-from-divorce","status":"publish","type":"post","link":"https:\/\/ctt-group.co.uk\/tax-trust\/protecting-assets-from-divorce\/","title":{"rendered":"Protecting assets from divorce"},"content":{"rendered":"
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Around 42% of UK marriages end in divorce. With divorce rates in 2021 reaching their highest in seven years, this increase illustrates the importance of ensuring a stable financial future for clients where marriage is a concern.<\/p>\n

Can they safeguard their assets in the event of a split \u2013 and if so, how can this be done? This article will provide you with some guidance on protecting assets from divorce.<\/p>\n

Assets, ownership, and divorce<\/strong><\/h2>\n

Deciding to get a divorce from a partner can be a very difficult time. One of the most stressful aspects of divorce tends to be the financial side of proceedings, having to divide up the assets and deciding which spouse keeps the family home.<\/p>\n

This is especially tricky in instances where an individual has inherited the home or brought significant assets with them into the marriage. It may not feel fair to have to split these assets equally in a divorce settlement when they were the sole property of an individual pre-marriage.<\/p>\n

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Trusts: protecting assets from divorce<\/h2>\n

Setting up a trust to preserve wealth for future generations is one of the most effective ways of protecting family wealth from divorce.<\/p>\n

The recent case of WX v HX heard at the Family Division of the England and Wales High Court (the Court) has highlighted that the manner in which assets are managed and utilised during a marriage can determine their treatment on divorce, resulting in outcomes that may seem unfair.<\/p>\n

The case concerned an application for a financial remedy order made by the Wife (WX) against her Husband (HX). Both parties brought significant assets into the 33-year marriage; these were mostly from the husband\u2019s career but included \u00a314m deriving from the wife\u2019s family. The couple\u2019s combined assets totalled \u00a355m.<\/p>\n

During the marriage, HX\u2019s assets had been incorporated into the matrimonial property as he used his income to meet the family\u2019s outgoings, purchase their homes, and other assets. On the other hand, WX\u2019s family assets were largely held in trusts of which she was a beneficiary. These were kept completely separate from the shared matrimonial assets. Although she used the income to meet some of her outgoings, the capital remained untouched.<\/p>\n

Assets are categorised into two classes: <\/strong><\/h4>\n