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Don’t be left short following a short marriage

9th July 2020

Although the media are reporting the Coronavirus restrictions have created a surge in divorce enquiries, the Bill introducing ‘no-fault’ divorces, which recently passed its first Commons vote, offers hope of a less confrontational process.

It is hoped that once the Bill is written into law, couples will only have to state their marriage has broken down irretrievably. This is in contrast to the current system, which requires a party to allege adultery, unreasonable behaviour or desertion has occurred.

Although the rules might change, when it comes to the financial settlement, a consideration not expected to change is the length of the marriage.

There is no strict formal definition of a shorter marriage, but it is generally accepted that five years or less is a short marriage.

Divorce following a shorter marriage should be simpler, as there are less likely to be children to consider and the couple will generally have had less time to build a range of shared assets.

Couples may agree a settlement amicably and write off the brief marriage as a mistake, but when they cannot, what constitutes a ‘fair settlement’ can prove contentious. The best guide for how the Courts might treat finances following a short marriage is highlighted by landmark cases.

What represents a fair financial settlement?

Before examining the cases, it is worth reviewing the factors taken into account by the Courts when deciding what represents a fair financial settlement.

It is also worth noting that an extended period of cohabitation before a marriage will be counted toward the length of the marriage; for example, a divorce after 10 years cohabiting and four years of marriage will be treated the same as a divorce after 14 years of marriage.

The range of issues considered by the Courts in reaching a decision includes, but is not limited to, the following:

  • The age of the couple and the length of the marriage;
  • The income and earning capacity of both parties;
  • The assets and financial resources of both parties;
  • The future financial responsibilities and needs of each party;
  • The contributions each party made to the relationship;
  • The standard of living enjoyed prior to the divorce;
  • Any mental or physical disability of the parties;
  • The welfare of any dependent children.

Typically, when:

  • the marriage has been short;
  •  there are no dependents; and crucially
  • both parties have worked

the Court will tend to divide the marital assets equally.

The problems arise with longer relationships. These are more complex due to asset ownership and the potential imbalance between the financial ‘strength’ of each party. This is particularly true where one party has pursued a career while the other has taken the role of homemaker.

In such cases, the final settlement often sees one party receive a larger share based on need, with the Court trying to ensure that they will be financially secure.

This principle creates much of the acrimony when shorter marriages end, when one party over estimates the financial settlement they believe they will be entitled to.

In general, each party will retain assets they brought to the marriage, while those acquired during the marriage will be divided fairly by the Court.

The spousal maintenance one party will be ordered to pay the other, if needed, will be decided by the Court and are designed to bridge inequalities in incomes. They will ideally enable both parties to enjoy a post-divorce lifestyle similar to that of their marriage.

The period it must be paid will reflect the length of the marriage, with a short marriage under five years typically resulting in no regular spousal maintenance payments being made.

Departing from the sharing principle – Miller v Miller considered

Shaping the way Courts decide financial settlements was Miller v Miller [2006] UKHL 24, which reached the House of Lords in 2006. This dealt with a short marriage of less than three years with no children involved.

The husband was a high earner and brought wealth to the marriage, being worth around £32m at the time of the divorce. By contrast, his soon-to-be ex-wife was significantly less well off.

The first judgement awarded the wife a lump sum of £5m. An initial appeal to the Court of Appeal was dismissed, at which point the husband appealed to the House of Lords.

Giving the judgement of the House of Lords, Lord Nicholls stated that, with no children involved, the issue of fairness centred on the continuing financial needs of the parties, compensation for any economic disadvantage arising from the conduct of the marriage, and importantly, the ‘sharing principle’.

In this case, issues of needs and compensation did not arise. A departure from the ‘sharing principle’ of complete equality was justified by the fact that the husband had entered the marriage a wealthy man.

Considering the degree to which his wealth had increased during the course of the marriage, it was held that the £5m award was appropriate and the appeal was dismissed.

Sharp by name, sharp by divorce

The case of Sharp v Sharp [2017] EWCA Civ 408 reached the Court of Appeal in 2017, and again blurs the lines for divorcing couples who call time on their marriage after only a few years.

The Sharps cohabited for 2 years and married in 2009, when both earned approximately £100,000 per annum each. During the course of the marriage however, Ms Sharp received £10.5m in bonuses, which helped the couple enjoy a relatively lavish lifestyle.

Ms Sharp petitioned for divorce in 2013. When the period of cohabitation was included, the marriage had lasted 6 years. The union produced no children, and at the time of the first financial settlement proceedings the total assets of the couple were valued at £5.45m.

Throughout the marriage the couple had maintained independent finances, which meant there were no joint investments or bank accounts. Their outgoings were evenly split between them.

The initial financial settlement in the High Court divided the matrimonial assets equally, awarding Mr Sharp a lump sum of £2.75m, which was appealed by Ms Sharp. In the Court of Appeal the amount was cut to £2m, comprising a property worth £1.1m and £900,000.

The initial judgement accepted the sharing principle in the absence of a prenuptial agreement, and found that the different degree to which each party had contributed to the matrimonial assets was irrelevant.

The Court of Appeal however recognised the marriage was short and childless, and that both parties choosing to keep their finances separate. It followed Miller v Miller in departing from the equal sharing principle, which was further enhanced in this case by the degree to which the parties had kept their finances separate.

Seek experienced advice early

What these judgements show is the potential for a divorcing spouse to argue for a departure from the sharing principle, whilst also complicating the concept of what represents a ‘short’ marriage; the Sharps were married for longer than the accepted definition of five years.

Ultimately, case law as it currently stands indicates that no divorcing spouse should casually assume they will receive an equal share of matrimonial assets following a short marriage, and that a carefully drafted prenuptial agreement might prevent an acrimonious split and post-divorce conflict.

If you have family or marriage related issues you would like to discuss with an experienced family lawyer, please get in touch with Mike Vale on mvale@ansonssolicitors.com or call 01543 267236.

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