Sarah Walker

About the Author
Sarah Walker

Partner, Edwards Family Law

Legal 500 Recommended Lawyer 2026
University of Cambridge
Formerly Clifford Chance & Hughes Fowler Carruthers

Sarah Walker trained as a corporate lawyer at Clifford Chance before moving to family law in 2017. She worked at Hughes Fowler Carruthers under Frances Hughes, where she acted on the landmark case of Potanina v Potanin in the Court of Appeal and Supreme Court – one of the most significant international financial remedy cases in recent years. Sarah advises high-net-worth clients in the UK and abroad on complex financial disputes involving offshore trusts, business interests, and inherited wealth, as well as private law children matters.

Q: What can I do if my ex-spouse stops paying what was agreed in our divorce settlement?

A: A financial consent order or financial remedy order is legally binding and enforceable through the courts. If your ex-spouse fails to comply, you have a range of enforcement options available – from attachment of earnings orders and third-party debt orders to charging orders over property and, in serious cases, committal proceedings for contempt of court.

One of the most distressing situations I encounter is a client who has been through the entire divorce process, reached a settlement, and is then faced with an ex-spouse who simply refuses to comply with what the court has ordered. The settlement that took months to achieve is worth nothing if it cannot be enforced.

The good news is that the English courts take enforcement seriously and have substantial powers to compel compliance. The key is knowing which enforcement mechanism is right for your situation – and acting without delay.

What types of non-compliance are most common?

The most common enforcement issues I see are: failure to pay lump-sum orders on time or at all; missed maintenance payments; failure to transfer property or execute a transfer; and failure to comply with pension-sharing orders. Less commonly, a party may attempt to delay or obstruct the implementation of a business sale or asset realisation that the court ordered.

In high net worth cases, non-compliance often has a strategic dimension – a wealthy ex-spouse may be deliberately making enforcement difficult by moving assets, restructuring business interests, or simply refusing to engage. These cases require a different approach from straightforward arrears.

The most common form of non-compliance I encounter is the failure to make spousal maintenance payments. While ex-spouses are often more accepting of their obligation to pay child maintenance, they frequently resist paying spousal maintenance. In cases where the paying party has a stable and substantial income, the usual first step is to request compliance with the court order. If this is unsuccessful, the next step is typically to threaten and if necessary, pursue an application for an attachment of earnings order.

Enforcement options for lump sum and property orders

Where a lump sum has not been paid, a charging order can be obtained over the debtor’s property, which prevents them from selling or remortgaging without satisfying the debt. A third-party debt order can freeze and redirect money held in bank accounts. Where the debtor has income, an attachment of earnings order can require their employer to deduct payments directly from their salary.

For property transfer orders, where the non-complying party refuses to sign the relevant documentation, the court can appoint a court officer to execute the transfer on their behalf, meaning the transfer proceeds without their cooperation.

Enforcement options for maintenance arrears

Enforcement options for maintenance arrears

Maintenance arrears can be recovered through many of the same mechanisms available for lump sums. An attachment of earnings order is often the most effective route when the paying party is employed. For self-employed individuals or those with income from investments or business interests, the position is more complex. It may require a more forensic approach to locate and attach income at source.

It is important to note that maintenance arrears can be enforced only for the 12 months immediately preceding the enforcement application, unless the court grants permission to enforce earlier arrears. Acting promptly is therefore important.

If you begin to notice that maintenance payments are being missed or are becoming irregular, it is important to act quickly rather than waiting for arrears to build up. In the first instance, you should:

  1. Keep a clear record of all missed or late payments, including dates and amounts.
  2. Raise the issue promptly with the paying party, as non-payment is sometimes due to oversight or short-term cash flow issues.
  3. Seek legal advice early if payments are not brought up to date quickly, so that enforcement options can be considered before arrears fall outside the 12-month window.

Early action significantly improves the chances of recovery. Delays can not only limit the amount that can be enforced without the court’s permission, but may also make recovery more difficult if the paying party’s financial position changes or becomes less transparent over time.

When can committal proceedings be used?

Committal – the ultimate sanction for breach of a court order – is available where a party has deliberately and knowingly breached an order. It is a serious step, carrying the possibility of imprisonment or a fine, and the courts require a high standard of proof. It is most commonly used where all other enforcement options have been exhausted or where the non-compliance is particularly egregious.

The threat of committal proceedings often has the effect of concentrating minds without the need to go all the way. In my experience, a well-drafted enforcement application accompanied by a clear indication that committal will follow if compliance is not forthcoming frequently produces results.

What if my ex-spouse has moved assets overseas?

This is an increasingly common problem. If assets have been moved to another jurisdiction, enforcement becomes more complex but is by no means impossible. English courts can grant freezing injunctions with worldwide effect, which prevent a party from dealing with assets anywhere in the world pending enforcement proceedings.

Enforcement in another country depends on whether that country has reciprocal enforcement arrangements with England and Wales, and whether the original order meets the requirements of that jurisdiction’s law. Early advice is essential – the longer assets remain overseas without action, the harder enforcement becomes.

I have acted in matters involving the enforcement of orders against high-value moveable assets, including luxury vehicles such as a Lamborghini, where the position was particularly complex and required urgent action to prevent the asset from being moved beyond the court’s reach.

If your ex-spouse is not complying with a financial order, Edwards Family Law can advise you on your enforcement options. Contact us at edwardsfamilylaw.co.uk.

FAQs (Frequently Asked Questions)

Q: Is there a time limit on enforcing a divorce settlement?

A: For maintenance arrears, you can generally only enforce the 12 months immediately before the application without the court’s permission. For lump-sum and property orders, there is no strict time limit, but delays can complicate enforcement, particularly where assets have been moved or dissipated.

Q: Can I enforce a consent order if my ex-spouse has gone bankrupt?

A: Bankruptcy materially affects the enforceability of financial remedy orders and the available routes to recovery. The interaction between family and insolvency law is highly fact-sensitive, including issues of timing, notice, and the status of the trustee, and early specialist advice is essential.

Q: What if the order was made in another country?

A: Orders made in other countries can sometimes be enforced in England, depending on the country and the nature of the order. Reciprocal enforcement arrangements exist with several jurisdictions. The process requires specialist international family law advice.

Q: Can I go back to court if my financial circumstances have changed significantly?

A: For maintenance orders, you can apply to vary the order if there has been a material change in circumstances. Capital orders – such as lump sums and property transfers – are final once made and cannot be varied, save in the very limited circumstances where an order can be set aside entirely.

Sarah Walker

About the Author
Sarah Walker

Partner, Edwards Family Law

Legal 500 Recommended Lawyer 2026
University of Cambridge
Formerly Clifford Chance & Hughes Fowler Carruthers

Sarah Walker trained as a corporate lawyer at Clifford Chance before moving to family law in 2017. She worked at Hughes Fowler Carruthers under Frances Hughes, where she acted on the landmark case of Potanina v Potanin in the Court of Appeal and Supreme Court – one of the most significant international financial remedy cases in recent years. Sarah advises high-net-worth clients in the UK and abroad on complex financial disputes involving offshore trusts, business interests, and inherited wealth, as well as private law children matters.

Q: Can offshore trusts protect assets in a divorce?

A: Not as effectively as many people assume. English courts have wide powers to look through trust structures where there is evidence that assets have been placed in trust to defeat a spouse’s claims, or where the settlor retains effective control. A trust is not a shield – it is a factor the court will examine carefully.

My background is in commercial law before family law, and it shapes how I approach cases involving complex asset structures.

This article explains how English courts approach offshore trusts and hidden assets in financial remedy proceedings, and what clients on either side of these disputes need to understand before proceedings begin.

How do English courts treat offshore trusts?

How English courts treat offshore trusts

The starting point is that assets held in a trust are not automatically excluded from the matrimonial pot. The court will look at the substance of the arrangement rather than its form. Key questions include: who created the trust and when it was created? Who are the beneficiaries? Does the settlor retain any control or benefit? Have assets been moved into the trust recently – particularly after separation or the commencement of proceedings?

What tools does the court have to investigate hidden assets?

The court has a comprehensive toolkit. A party can be ordered to provide a detailed financial disclosure, including documentation from overseas entities. Third-party disclosure orders can compel banks, accountants, and corporate entities to provide records directly to the court. Freezing injunctions can prevent assets from being moved or dissipated during proceedings.

In serious cases, the court can appoint a receiver to take control of assets where there is a real risk they will be removed from the jurisdiction or otherwise made unavailable. This happened in Michael v Michael, where the husband’s refusal to comply with disclosure led the court to take that unusual step.

Forensic accountants are frequently instructed in complex cases to trace assets, analyse financial structures, and provide expert evidence on the value of business interests or the true extent of a party’s wealth.

What happens if hidden assets are discovered after the order is made?

An order can be set aside on grounds of material non-disclosure. The threshold is high – the concealed asset must be of a nature that would have made a substantial difference to the outcome. But where that threshold is met, the court can reopen the case entirely, which means the concealing party faces both a revised order and the costs of the further proceedings.

In MK v SK [2026] EWFC 28, a case that attracted comment from senior practitioners, the court found the husband’s assets ran to several million pounds despite his having claimed near-nil wealth throughout the proceedings. The case drew criticism that the outcome did not adequately reflect the extent of the non-disclosure, and the judgment prompted discussion about whether the courts’ existing powers are being used to their full extent.

What about assets held through companies rather than trusts?

The same principles apply. A spouse who owns a business outright, or who holds shares in a company through which they receive income or benefits, cannot simply present the company as a third-party asset unconnected to the marriage. The court will look at the reality of the situation.

Business valuations in financial remedy proceedings are a specialist area. The methodology used to value a company – whether on an earnings basis, net asset basis, or some combination – can make an enormous difference to the outcome. Expert evidence from a forensic accountant is almost always required in complex cases.

What should you do if you suspect your spouse is hiding assets?

my spouse is hiding assets

Get advice early. The earlier a solicitor is instructed, the more options are available. Freezing injunctions, for instance, need to be applied for urgently – once assets have been moved, the position becomes significantly harder to remedy. A forensic accountant can also begin tracing work before proceedings formally commence.

Be methodical about what you already know. Bank statements, company accounts, property records, and lifestyle observations can all be relevant. A good family solicitor will help you identify what information you have and what questions need to be asked.

If you are dealing with a divorce involving complex assets, trusts, or concerns about financial disclosure, Edwards Family Law can advise you. Contact us at edwardsfamilylaw.co.uk.

FAQs (Frequently Asked Questions)

Q: Can I apply for a freezing injunction if I think my spouse is moving assets?

A: Yes, but you need to act quickly, and you will need to demonstrate a good arguable case and a real risk of dissipation. A freezing injunction is a significant step and requires specialist advice – the courts do not grant them routinely, but they are available where the evidence supports it.

Q: Are overseas assets included in an English divorce settlement?

A: They can be. English courts can make orders in respect of overseas assets, though enforcement in another jurisdiction depends on that country’s laws and any reciprocal enforcement arrangements. Specialist advice is essential in international cases.

Q: What is a Barder event, and when can it be used to reopen a settlement?

A: A Barder event is a fundamental and unforeseeable change in circumstances that invalidates the basis on which a consent order was made. The threshold is high – it cannot be used simply because one party’s circumstances have changed or because a settlement later appears unwise.

Q: Can a trust created before marriage be included in a divorce settlement?

A: Pre-marital trusts are not automatically ringfenced. The court will consider factors such as the length of the marriage, whether the trust was used to support the family during the marriage, and the financial needs of both parties. Pre-nuptial agreements which address trust assets can be relevant but are not automatically binding.

Kelly Edwards

About the Author
Kelly Edwards
Managing Partner, Edwards Family Law

Chambers HNW Ranked
Legal 500 Ranked
Spear’s 500 Listed
18+ years HNW family law

Kelly Edwards founded Edwards Family Law in 2019 after more than a decade at Sears Tooth, where she trained under the renowned Raymond Tooth, and two years as a Director at Vardags. She has worked exclusively with high-net-worth and ultra-high-net-worth clients throughout her career and is recognised by Chambers HNW as ‘iconic, tough, astute, and commercially driven’. Kelly advises on all aspects of complex family law, with particular expertise in financial remedy, trusts, and international matters.

Q: What is a consent order in divorce?

A: A consent order is a legally binding court document that records the financial agreement reached between divorcing spouses. Without one, either party can make financial claims against the other at any point in the future – even years after the divorce. It is the only way to achieve a clean financial break.

One of the most common mistakes I see in divorce cases is the assumption that reaching an agreement is enough. It is not. An agreement recorded in emails, solicitors’ letters, or even a signed document between the parties has no legal force unless a court approves it. A consent order is the mechanism that makes your financial settlement permanent and enforceable.

Below, I address the ten questions my clients most frequently ask about consent orders, drawing on more than eighteen years of advising high-net-worth individuals through the process.

1. Do I need a consent order if we have already agreed on everything?

Yes. An informal agreement – however detailed – does not prevent either party from making future financial claims. I have seen clients return to court years after separation because a partner who ‘agreed’ to ask for nothing later changed their mind after circumstances changed. A consent order permanently extinguishes those claims.

I had a case where my client thought their agreement, reached 18 months earlier, was binding, but because the value of the shares they held had increased and they were a matrimonial asset, the increase had to be shared. That would not have happened if the agreement had been made an order.

2. How does the court decide whether to approve a consent order?

The court does not simply rubber-stamp what the parties have agreed. A judge reviews the order to ensure it is fair, that both parties have made full financial disclosure, and that any children’s interests have been considered. The court will not approve an order where there has been a significant failure of disclosure or where the terms are clearly inequitable.

This is why the quality of your financial disclosure – particularly in cases involving businesses, trusts, or substantial assets – matters so much to the outcome.

3. What needs to go into the financial disclosure?

Both parties should complete a Form E, which sets out all assets, income, liabilities, pensions, and financial needs. In high-net-worth cases, this extends to business interests, shareholdings, offshore accounts, trust structures, and any assets held by third parties in which a beneficial interest may exist.

Incomplete or misleading disclosure is not only likely to result in the court rejecting the order. Still, it can also lead to the order being set aside entirely if discovered later, as the courts have made clear in a series of recent decisions.

In practice, where people have a good understanding of their family finances, a detailed schedule and copy statements might suffice. If someone does not have all of that information or a good understanding or someone refuses to provide the underlying evidence then this would be a red flag to us in terms of whether they were telling the whole story.

4. What happens if my ex-partner refuses to sign the consent order?

If one party refuses to engage or sign, the only option is to apply to the court for a financial remedy order. The court has wide powers to make orders regarding the division of assets, property, pensions, and maintenance, and it does not need the agreement of both parties to do so. Refusal to cooperate is rarely in a party’s interests.

5. Can a consent order be changed after it is made?

As a general rule, no, which is exactly why consent orders are so valuable. Once approved, the capital provisions (relating to property and lump sum payments) are final. Maintenance provisions can be varied if there is a significant change in circumstances. Pension sharing orders cannot be varied at all once implemented.

The finality of a consent order is its greatest strength. It is also why it must be drafted carefully from the outset.

6. Can a consent order be set aside?

In limited circumstances, yes. The main grounds are fraud, material non-disclosure, or a fundamental change in circumstances so significant that enforcement would be inequitable (sometimes called a Barder event). These cases are rare, and the threshold is high, but they do arise – particularly in cases where one party has concealed significant assets during the proceedings.

I acted on a case several years ago where the value of one of the husband’s business interests was recorded as having a low value on the asset schedule in the proceedings. Just under a year after the order was made, that business was sold for over £100m. It then transpired (following further disclosure) that the deal was in the pipeline and known about before the order was finalised and so the order was set aside and an additional circa £50m awarded to the wife, together with a costs order.

7. How long does the consent order process take?

Once an agreement has been reached, the consent order application typically takes between six and twelve weeks to be approved by the court, depending on court capacity. The drafting process itself, which an experienced family solicitor should do, takes a matter of days once instructions are clear.

The timeline for reaching the underlying agreement varies enormously. In straightforward cases, it may take weeks. In complex matters involving businesses, trusts, or international assets, it can take considerably longer.

8. What is the difference between a consent order and a financial order?

A consent order is made by agreement between the parties and then approved by the court. The court makes a financial order (or financial remedy order) after contested proceedings, where the judge decides the outcome. Both are legally binding, but a consent order reflects the parties’ agreement, whereas a financial order reflects the judge’s decision.

9. Do I need a solicitor to get a consent order?

You are not legally required to instruct a solicitor, but I would strongly advise it. A consent order is a permanent legal document, and errors in drafting – particularly around pensions, property, or the precise wording of a clean break clause – can have serious and expensive consequences that cannot easily be undone. The cost of getting it right at the outset is invariably less than the cost of seeking to correct it later.

10. How much does a consent order cost?

Costs depend on the case’s complexity. In straightforward situations, a consent order can be drafted and approved at relatively modest cost. In complex high-net-worth cases involving multiple assets, business interests, or international elements, the drafting, negotiation, and court process will take longer. The court fee for filing a consent order application is currently PS53.

Given the risks of financial claims remaining open and what that means to both parties and their ability to move on, making sure you enter into a legally binding court order is, in my view, invaluable and essential spending for anyone getting divorced.

If you are considering a consent order or want to understand your options following separation, the team at Edwards Family Law can help. Contact us at edwardsfamilylaw.co.uk.

As a founder, your shares and options are often your most valuable asset, and their protection would be high up on your priorities list were you ever to face getting divorced. This article will cover the types of considerations that are relevant to your business assets on divorce. These include the extent to which your shares or stock options are treated as “matrimonial”; how they may be valued; and what steps you may take now in order to protect your business interest.

Will my share in the business be included in the assets to be divided on divorce?

spouse claim on business in divorce

The likely answer is yes, unless your marriage was only very short.

Simply put, the starting point on divorce is a 50/50 division of matrimonial assets, unless one party’s financial needs require that they take a larger than 50% share. Needs is an elastic term but will essentially be their ability to meet their own housing needs and their day-to-day living costs, taking into account their income, mortgage capacity, and any other financial resources available to them.

A matrimonial asset is one that is the product of a party’s endeavours during the marriage, or the parties’ joint endeavours. This means that the following are generally not matrimonial: gifts, inheritances and assets that are owned before the marriage or acquired/ earned post-separation. Therefore the value of your interest in a business is matrimonial to the extent that value relates to the years that you were married. A marriage is deemed to start when a couple start cohabiting, provided your cohabitation period moved seamlessly into marriage.

ALSO READ: Divorce for Tech Founders: What Happens to Your Shares and Stock Options?

This means that if you founded your business before you started cohabiting with your spouse, the value of the business at the time you started cohabiting is non-matrimonial. Any growth in the value of the business during your marriage (including cohabitation) is matrimonial. If you founded your business when you were already married or cohabiting with your spouse, the entire value of your share in the business is matrimonial.

The reason why very short marriages are treated differently is because a spouse in that instance will likely not have a “sharing” claim, i.e. the starting point for their financial claim associated with your divorce is not a 50% share in matrimonial assets. It is instead limited to a “needs” claim. This means their claim will be limited to ensuring that they are put in a position where they will be able to independently meet their financial needs (including the needs of any children of the marriage) within a reasonable time period following divorce. They may need some financial assistance in the short-term to meet their needs. The hope would be that you can meet their needs claim using other financial resources without invading your business asset – for example by your spouse receiving a greater share in the family home.

Does this mean that my spouse obtains a stake in my business, or my business may have to be sold?

The aim is that this should not be necessary. For private businesses with few shareholders, the court will try to avoid either a transfer of shares to a spouse on divorce or a forced sale of the business.

The most common approach taken by the court is ‘off-setting’, whereby the non-shareholding spouse receives a greater share of the remainder of the matrimonial assets in lieu of the shares. Cash, other investments, the equity in the family home and pensions can all be applied for this purpose and you may be prepared to sacrifice your equitable share in any or all of these in order to retain your business interest.

The second most common approach taken by the court – and this may be the only option available if there are insufficient other marital assets around in order to off-set your business interest – is deferred sharing of your business interest. Your spouse retains a beneficial share in your shares and, on the ultimate sale of those shares, they receive a percentage of the proceeds. Off-setting can be used in conjunction with deferred sharing such that your spouse’s beneficial interest in the shares is reduced. The downside of deferred sharing is a lack of certainty for the non-shareholding spouse, and a lack of a capital clean break between you. A financial tie between you remains unresolved unless and until the shares are realised.

If you hold unvested stock or share options, deferred sharing is the preferred approach so that the shares, or their cash proceeds, are only divided on receipt. This is because attributing a value to a share option today is nearly impossible, and their vesting may be contingent on your continued work in the company. If you separate part-way through the vesting period, a time-based apportionment may be applied so that only a percentage of the shares are treated as matrimonial.

Specialist tax advice should be taken on the implications of the above options.

How is my interest in the business valued?

When applying the off-setting method, the challenge is in valuing your business interest so as to determine the degree of off-setting that needs to be undertaken elsewhere. It will need to be valued at the time of divorce and, if relevant, at the time of your marriage or cohabitation (if you are seeking to exclude its pre-marital value from your spouse’s sharing claim).

Where the company is at an early stage of development, whereby traditional accounts-based valuation methods may not assist, valuation might rely on recent funding rounds, profit forecasts, any offers for purchase received in the past, or other internal data.

A valuation expert can be jointly instructed to prepare a neutral valuation report. They will analyse the financial information available, compare the company with any comparables in the market and its competitors, and ask questions of the relevant people in the business as necessary. If there are court proceedings in the finances, this expert may be instructed by the court and will prepare a report for the court’s consideration. That expert may be called to give evidence in cross-examination in any final hearing, if the proceedings get to that stage.

What steps can I take to protect my business interest from any future divorce?

how to protect business from divorce

If you are not yet married, the best possible protection is a pre-nuptial agreement. You would seek to agree that the full value of the business will be excluded from any future sharing claim that your spouse may have. Please note that you cannot exclude a needs claim, so there is still a risk the value of your business interest will be invaded to some degree to meet a needs claim.

If you are already married, you may enter into a post-nuptial agreement. As with the pre-nuptial agreement, you can seek to agree to ring-fence your business interest from any future sharing claim, but whether or not this will be deemed ‘fair’ (as all nuptial agreements must be in order to be upheld) will depend on the remainder of the financial resources available to you and your spouse in order to meet any needs claim. If your business is your primary marital asset, and (for example) your family home is rented or is heavily mortgaged, it may not be possible to exclude your business from any future claim on divorce, since both of you must be able to meet your financial needs. In that instance, a post-nuptial agreement agreeing that the business is ring-fenced would not be upheld on divorce.

Agreeing a post-nuptial agreement with your spouse during the marriage can be challenging; it will precipitate some difficult conversations and you will both need to instruct family law solicitors to independently advise you on the terms of the agreement. You will also need to exchange disclosure at that time as to your financial situation, including an estimated value of the business. However the exercise could prove utterly invaluable in any future divorce.

As a founder, your shares and options are often your most valuable asset, and a divorce settlement can feel like losing control of your life’s work. This article will cover how your equity may be valued on divorce; whether or not it is “matrimonial”, i.e. to be included in the marital pot for potential division on divorce; some options to protect your stake; and other considerations such as tax.

1. Why founder equity is different

Equity in a company is treated differently, as it should be, in Family Law to both salary and other investments such as shares in publicly listed companies, bonds or investment funds. If you are not employed by the company and all your shares in the company are vested, then the shares’ treatment can be quite simple, though of course valuation issues may still arise. However what if your stock is not yet vested and is reliant on continued work? What if you separate before it is fully vested? What if you leave the company before it all vests? What if you set up the company and/or were awarded some of the stock before you got married, but have received more shares during your marriage? Is unofficial (verbal agreement) or official (contractual) “sweat equity” taken into consideration?

From your point of view, your equity represents your creation of an asset with its own life-form and financial obligations. It is not necessarily about its face-value, which itself is probably hard to determine and nascent. If some of the shares were transferred into your spouse’s name on divorce, what implications would that have for the company? What tax would arise on such a transfer? Any prospective sale may be years away so what role would your spouse play as a shareholder in the meanwhile?

Founder equity and its treatment on divorce clearly carries some complexities that other sources of income and other capital investments do not.

2. Matrimonial or non-matrimonial?

Matrimonial or non-matrimonial assets

Simply put, the starting point on divorce is a 50/50 division of matrimonial assets, unless one party’s financial needs require that they take a larger than 50% share. Needs is an elastic term but will essentially be their ability to meet their own housing needs and their day-to-day living costs, taking into account their income, mortgage capacity, and any other financial resources available to them such as savings and investments. It is a reasonable assumption at least as a starting point, however, that if an asset is matrimonial it will be treated as an asset to be shared equally with your spouse. So what makes your equity matrimonial or not in the eyes of family law?

A matrimonial asset is one that is the product of a party’s endeavours during the marriage, or the parties’ joint endeavours. “Endeavours” differentiates these assets from non-matrimonial assets such as gifts or inheritances, which are not seen to be the “fruits of the marriage”. Equally, any asset that is pre-owned and brought to the marriage by either party (“pre-marital”) is not matrimonial. Divorcing spouses should note that a “marriage” is deemed to start when a couple start cohabiting, provided that cohabitation period moved seamlessly into marriage. Therefore the years you lived together before your wedding count towards your years married.

English family law sees no difference between a founder’s endeavours in building up a business and their spouse’s endeavours in supporting that work, regardless of whether or not the spouse was working, particularly if they have raised the parties’ children or if it has been a long marriage.

This means that if you have founded a business during your marriage, and you have been married a long time (say, more than 10 years), in theory your spouse could be entitled to half of your business. If you co-own the business with fellow shareholders, then your spouse could be entitled to half of your share in the business.

What is relevant is the proportion of the business that you own at the time of separation – though a recent divestment of stock prior to separation can be reversed in certain circumstances (see further below).

If you set up the company prior to marriage (including pre-martial cohabitation) so owned the business then, but it was in its early stages and its value was highly speculative at that time – or it had a low valuation then that has since increased – then the growth in the value of the company is treated as matrimonial. I.e. the difference between the value of the company at the time of marriage vs. the value at the time of separation is matrimonial.

This is obviously a daunting thought for founders who have built up a profitable and valuable business while they have been married. We consider in this article how you can protect yourself prior to any potential future divorce.

3. Restricted stock and share options: Matrimonial or non-matrimonial?

Fully vested stock that you earned/ were awarded to you during the marriage will be valued as at the date of your separation. As above, if yours is a long marriage (10+ years), in theory the full value of those shares could be treated as matrimonial, since their full value was acquired during the marriage. Remember that “marriage” includes any prior period of cohabitation that seamlessly progressed into marriage.

Stock that is fully vested as at the date of separation, but which was awarded prior to your marriage (see note above re: cohabitation) is treated differently. Only any increase in the value of those shares since the marriage is matrimonial.

If you have a long separation before you divorce and resolve the finances associated with your divorce, shares that are awarded to you post-separation could be deemed to be non-matrimonial and will be excluded from the marital pot for sharing purposes on divorce (although this will depend on the circumstances of the award).

Stock that vests post-separation but prior to resolving the finances and that was awarded to you during the marriage is matrimonial. Their value as at their vesting date is their matrimonial value. This is because they relate to the period of shared marital “endeavours”.

Unvested stock and share options are the trickiest area, since often their vesting is reliant on your continued work in the company as at the vesting date. Unvested stock and share options that are granted to you during the marriage are potentially matrimonial, even if you separate during the vesting period. If you separate part-way through the vesting period, a time-based apportionment may be applied so that only a percentage of the shares are treated as matrimonial (since some of the share value will relate to the post-separation period).

Attributing a value to a share option today is nearly impossible because all the following factors must be considered:

  • the terms and conditions associated with the award;
  • the likelihood of the shares vesting;
  • their likely value on vesting;
  • whether it is appropriate to apply a percentage discount to the value of the options to reflect the risk of forfeiture on leaving the company, or the risk of the company depreciating in value; and
  • any tax considerations, as only the net value of the shares are matrimonial.

This means that in nearly all cases, if a spouse holds share options, their financial order will state that the shares (or the cash value received for the shares) will only be divided between the parties when the option-holder actually receives the shares. That way both parties share in the risks outlined above.

4. Valuation issues

Business Valuation Experts

Valuing a business as at a specific date is difficult where the company is private or unlisted, as the majority of tech companies are. Valuation might rely on recent funding rounds, profit forecasts, or other internal data.

A valuation expert can be jointly instructed by the divorcing parties to advise them on the likely value of the company today and at a specific date in the past (for example, marriage or separation). Experts can be instructed to reach an earnings-based valuation (an EBITDA multiple); an asset-based valuation (net balance sheet value); or a discounted cashflow valuation – or indeed all three.

5. If matters go to court

Your greatest concern may be a forced sale of shares in the business or, if there is no market for sale of the shares, transfer of those shares to your spouse on divorce. In reality, both of these outcomes for a private business with few shareholders are unlikely and the court will seek to avoid them.

The most common approach taken by the court is ‘off-setting’, whereby the non-shareholding spouse receives a greater share of the remainder of the matrimonial assets in lieu of the shares. Cash, other investments, the equity in the family home and pensions can all be applied for this purpose and you may be prepared to sacrifice your equitable share in any or all of these in order to retain your business interest.

The challenge, of course, in off-setting is valuing your business interest at the time of divorce in order to calculate the degree of off-setting that needs to be undertaken elsewhere. The valuation of your business as at the relevant dates will likely be a critical matter for dispute. The court can direct that a jointly instructed single joint expert is appointed: this person is typically chosen by one party putting forward three potential experts (with evidence of their expertise) and the other party choosing one from that shortlist. That expert owes their obligation to report to the court rather than to the parties, and all correspondence with that expert must be copied to all parties. They will produce a report and, if necessary, can appear as an expert in court and be cross-examined on their report in a final hearing.

The second most common approach taken by the court – and this may be the only option available if there are insufficient other marital assets around in order to off-set your business interest – is deferred sharing of your business interest. Your spouse retains a beneficial share in your shares and, on the ultimate sale of those shares, they receive a percentage of the proceeds.

Off-setting can be used in conjunction with deferred sharing such that your spouse’s beneficial interest in the shares is reduced.

The downside of deferred sharing is a lack of certainty for the non-shareholding spouse, and a lack of a capital clean break between you. A financial tie between you remains unresolved unless and until the shares are realised.

Specialist tax advice should be taken on the implications of the above options. A tax expert would be jointly instructed to provide a report and, if necessary, be available for cross-examination of their evidence at any final hearing.

6. How to solve matters via reaching a settlement

Much like with the court route as set out at (5) above, settlement agreements will typically seek to either off-set your business interest in the overall asset division, or allow for your spouse to receive a proportion of the proceeds of your business interest once sold in the future.

If seeking to off-set, you may consider hiring a valuation expert to assist you in valuing your business interest. Specialist tax advice should also be sought as above.

Please note if you reach an out-of-court financial settlement with your spouse it is essential that you instruct solicitors to write that agreement up into a court order by consent, and apply for its approval by the court. This is because if you do not have a final order sealed by the court stating that its terms are in full and final settlement of all financial claims associated with your divorce, your spouse could return to court at any time in the future seeking financial relief from you. Their claims would then be determined at their time of application, by which time your business may have trebled in value.

7. How to protect yourself in a marriage, prior to any separation

how to protect yourself in a marriage

A nuptial agreement is the best possible way to protect yourself from claims against your business assets in any future divorce.

If you are not yet married, you must enter into a pre-nuptial agreement prior to any marriage. This would state that your future spouse will not acquire any legal or beneficial interest in the business whatsoever by virtue of your marriage. Please refer to our specific articles on pre-nuptial agreements here:

The Complete Guide to Pre-nuptial Agreements in England and Wales

Pre-nuptial Agreements: are they binding, and are they worth it?

Are pre-nuptial agreements legally binding in the UK?

Are Pre-Nuptial and Post-Nuptial Agreements Legally Enforceable?

When Misconduct Counts: Court Reduces Husband’s Pre-Nuptial Entitlement in Loh v Loh-Gronager [2025] EWFC 483

Presuming you are already happily married, you should consider entering into a formal written agreement now with your spouse as to how your business would be treated on any future divorce between you. Ideally, you would seek to agree that the business can be entirely ring-fenced from any financial settlement on divorce. This would strictly speaking be a “post-nuptial agreement”, but it need not consider all of the financial terms that would apply to your divorce – it could deal exclusively with the business. Whether or not a total ringfencing is appropriate or possible will depend on the wider financial circumstances of your marriage. If your business is your sole marital asset, or considerably the most valuable marital asset (for example, you have committed your life savings to it and your family home is heavily mortgaged/ you live in rented accommodation), then total ringfencing may not be possible. This is because after any ringfencing your spouse’s housing needs and income needs must still be met. If there are not sufficient other assets or income to meet those needs excluding the business, then a post-nuptial agreement that seeks to ringfence the business in its entirety from consideration on divorce will not be considered fair and is unlikely to be upheld on divorce.

If, however, you and your spouse own other valuable assets or have other financial resources – for example, your spouse is a high earner/ there are cash and investments and your family home is of sufficient value that you could both re-house with 50% of its net sale proceeds – then a post-nuptial agreement stating that your spouse will not be entitled to any share in the business on divorce may be upheld.

There may of course be some difficulty in agreeing a post-nuptial agreement with your spouse during the marriage; it will precipitate some difficult conversations and you will both need to instruct family law solicitors to independently advise you on the terms of the agreement. You will also need to exchange disclosure at that time as to your financial situation, including an estimated value of the business. This is because in order for the post-nuptial agreement to be upheld, your spouse must know the value of the asset to which they are “signing away their rights”.

There is a far higher chance that you will be able to agree to a post-nuptial agreement while you are happily married than if separation is on the horizon, as clearly at that stage your spouse will be very cautious not to prejudice any potential financial settlement on divorce. The sooner following a business’ inception that you can act to ringfence it in a nuptial agreement, the better.

8. FAQs (Frequently Asked Questions)

a) Can my spouse claim half my founder shares?

In short, yes, if you established the business during the marriage or it was valueless before the marriage. This does not mean that half of the shares must be transferred to them on divorce, but it does mean that the value of those shares may need to be paid to your spouse on divorce or that they will receive a greater share in (or all of) the remainder of the marital assets.

b) What if my options haven’t vested yet?

Typically your spouse will acquire their half-share in your options on their vesting date. Otherwise you may need to off-set that value in any financial settlement reached at the time of divorce, but valuing those options is very difficult.

C) How is a pre-revenue startup valued?

Valuation might rely on recent funding rounds, profit forecasts, or other internal data. If valuation is a particular issue in dispute a business valuation expert would be instructed (either by agreement between you, or by the court) to provide a valuation report.

d) Can I keep my company but give my spouse other assets instead?

Yes absolutely, and this is the most common approach taken by the court in dealing with these matters provided there are sufficient other assets to be transferred to your spouse in order to meet either their “sharing” claim or their “needs” claim.

e) Will I have to pay capital gains tax?

Transfers of assets to an ex-spouse pursuant to a financial order associated with a divorce are generally exempt from capital gains tax. If, however, you have to dispose of shares or business assets in order to raise cash to meet a financial settlement, this may give rise to capital gains tax so specialist tax advice should always be sought prior to any final settlement or final hearing.

f) Should I get a pre-nup as a founder?

If you are not yet married, then yes, definitely! If you are already married, you should consider proposing a post-nuptial agreement.

9. My experience

My name is Kate Pooler and I am an Associate at Edwards Family Law. I have six years of experience working in Family law and I have helped numerous business-leaders, primary shareholders, stock option-holders and founders navigate both nuptial agreements and divorce. Please do not hesitate to get in touch should you have any questions arising from this article.

Kelly Edwards

About the Author
Kelly Edwards
Managing Partner, Edwards Family Law

Chambers HNW Ranked
Legal 500 Ranked
Spear’s 500 Listed
18+ years HNW family law

Kelly Edwards founded Edwards Family Law in 2019 after more than a decade at Sears Tooth, where she trained under the renowned Raymond Tooth, and two years as a Director at Vardags. She has worked exclusively with high-net-worth and ultra-high-net-worth clients throughout her career and is recognised by Chambers HNW as ‘iconic, tough, astute, and commercially driven’. Kelly advises on all aspects of complex family law, with particular expertise in financial remedy, trusts, and international matters.

Q: What is Form E in divorce?

A: Form E is the financial disclosure document each party must complete in financial remedy proceedings. It sets out all assets, income, debts, pensions, and financial needs. Both parties are required to complete it honestly and fully – it is signed with a statement of truth, meaning deliberate omissions can amount to contempt of court.

Financial disclosure is the foundation of every fair divorce settlement. Without it, neither party – nor the court – can properly assess what a fair outcome looks like. Form E is the document that makes financial disclosure happen, and getting it right is one of the most important things you can do in your case.

In my experience, the cases that go wrong – whether through protracted litigation, orders that are later challenged, or settlements clients later regret – almost always have flawed financial disclosure at their root. Here is what you need to know.

What does Form E cover?

What does Form E cover

Form E is a comprehensive document that runs to many pages. It requires full details of all property owned (in the UK and abroad), all bank and savings accounts, investments, business interests, pensions, and any other assets. It also covers income from all sources, debts and liabilities, and financial needs going forward – including housing, income requirements, and the needs of any children.

In high-net-worth cases, it will also need to address shareholdings, options, deferred compensation, trust interests, and assets held through corporate structures. The document must be accompanied by supporting financial documentation for every item disclosed.

A well put together form E includes documentary evidence to support what you say, cross-referencing bank accounts to make sure nothing has been missed and if it calls for it, including documents to assist that are not on the standard list. This helps to limit the questions to be asked and hopefully bring the parties to a resolution far quicker.

What are the consequences of incomplete disclosure?

The duty of full and frank financial disclosure in financial remedy proceedings is absolute. Deliberate concealment is treated extremely seriously by the courts. In cases where a party is found to have hidden assets or provided misleading disclosure, the court has the power to draw adverse inferences – meaning it can assume the concealed assets are worth whatever figure it considers appropriate.

In more serious cases, the court can set aside an existing order, impose costs penalties, and, in extreme cases,s refer the matter for contempt proceedings. The consequences of being caught are invariably worse than those of the underlying disclosure.

I acted in the case of Young v Young where Mr Young was sent to prison for 6 months for failing to disclose his assets adequately. This was after several years and is generally a last resort for the court. Usually the court will make costs orders against the non-disclosing party and of course, the more the party seeking the disclosure has to keep asking and making court applications, the more the costs are.

When does financial disclosure happen?

In court proceedings, both parties are required to exchange Form E simultaneously at a fixed date set by the court – usually several weeks after the first appointment (FDA). In cases that settle outside court, disclosure often takes place through voluntary exchange, though it must still be full and honest.

In complex cases, it is common for further disclosure to be sought after the initial exchange – for instance, additional documentation about business valuations, trust accounts, or overseas assets. This process is known as questionnaire responses and can add considerable time to proceedings if one party is uncooperative.

What if I think my spouse is hiding assets?

Spouse's hidden assets


This is one of the most common concerns I encounter. Suspicions of hidden assets range from unexplained lifestyle gaps – where a spouse appears to live beyond their disclosed means – to complex offshore structures, undeclared business interests, or the deliberate undervaluation of assets.

If you believe your spouse is not being honest about their finances, there are several tools available. A questionnaire can request further documentation. The court can order third-party disclosure, requiring banks, companies, or other institutions to provide records directly. In serious cases, a freezing injunction can prevent assets from being dissipated. A forensic accountant can be instructed to analyse financial records and provide expert evidence.

If I or my client suspect non disclosure, what we do will very much depend on what stage we are in the process. There is almost always a paper trail and so it is really down to knowing where to look and who to ask, which comes down to experience.

Can Form E be used in non-court proceedings?

Yes. Even where parties are resolving their finances through mediation, collaborative law, or direct negotiation, voluntary financial disclosure in the Form E format is standard practice and strongly advisable. Any settlement that does not involve full disclosure risks being challenged later, and the court is unlikely to approve a consent order where disclosure has been inadequate.

If you have questions about financial disclosure or are concerned about your spouse’s finances, Edwards Family Law can advise you. Contact us at edwardsfamilylaw.co.uk.

Frequently Asked Questions

Q: Do both parties have to complete Form E?

A: Yes. Both parties must complete and exchange their Form E simultaneously. Neither party should complete their form having seen the other’s – the exchange is simultaneous precisely to prevent this.

Q: What happens if my spouse refuses to complete Form E?

A: If a party refuses to provide financial disclosure, the court can make orders compelling disclosure and, if necessary, draw adverse inferences against them. Persistent non-compliance can result in costs orders and, in extreme cases, committal proceedings.

Q: Can I use my spouse’s financial records without their knowledge?

A: This is a complex area. Documents that come into your possession legitimately during the marriage – such as bank statements you have accessed on a shared account – are generally admissible. Covert recording or hacking into accounts is not. If you have concerns about what your spouse may be concealing, take legal advice before gathering evidence.

Q: How far back does financial disclosure go?

A: Form E requires 12 months of bank statements and two years of business accounts as a minimum. In complex cases, particularly where there are concerns about asset dissipation or historic transactions, the court can order disclosure going back much further.

Sarah Walker

About the Author
Sarah Walker

Partner, Edwards Family Law

Legal 500 Recommended Lawyer 2026
University of Cambridge
Formerly Clifford Chance & Hughes Fowler Carruthers

Sarah Walker advises on all areas of family law. She has specific expertise in complex cross-border financial disputes, which often involve offshore trusts, complex award packages, high-value business and inherited or pre-acquired wealth.

Having worked in the audit department of PricewaterhouseCoopers and trained in corporate law at Clifford Chance before moving into family law, she brings a unique perspective to her cases.

Sarah has worked on a number of reported cases, including the seminal case of Potanina v Potanin in the Court of Appeal and the Supreme Court.

Q: What family law issues should expats consider when returning to the UK?

A: Returning expats should consider which country’s courts have jurisdiction over any divorce or financial claims, whether any overseas divorce settlement can be reopened in England and Wales, the status of pre- or post-nuptial agreements, and how to regularise arrangements for children, particularly where relocation involves more than one jurisdiction. Early specialist advice is strongly recommended, as timing can be decisive.

In an increasingly globalised world, it is common for British families to spend significant periods living abroad for work, business, or lifestyle reasons. However, many expats eventually decide to return to the UK. While the logistics of relocation (housing, schooling and employment) often take centre stage, the family law implications of returning to England and Wales can be equally important.

For individuals who have married, separated, or had children while living overseas, relocating to the UK can raise complex legal issues. Understanding these considerations early can help avoid costly legal disputes and ensure that family arrangements are legally robust.

Which Country’s Courts Have Jurisdiction?

Courts Jurisdiction

One of the first legal questions that may arise when expats return to the UK is jurisdiction, meaning which country’s courts have the authority to deal with family law matters such as divorce, financial remedies, or child arrangements.

For British nationals who have lived or are still living abroad (albeit with a view to moving back), multiple countries may potentially have jurisdiction over their family law matters. The courts of England and Wales will have jurisdiction in the following scenarios:

  • Both parties to the marriage or civil partnership are habitually resident in England and Wales
  • Both parties were last habitually resident in England and Wales and one of them continues to reside there
  • The respondent is habitually resident in England and Wales
  • The applicant is habitually resident in England and Wales and has resided there for at least one year immediately before the application was made
  • The applicant is domiciled and habitually resident in England and Wales and has resided there for at least six months immediately before the application was made
  • Both parties are domiciled in England and Wales
  • Only the applicant or respondent is domiciled in England and Wales

If you are a family living between two countries, even temporarily, this could lead to competing proceedings in different jurisdictions.

Even if you are not living in England and Wales, if you retain a British domicile, you or your spouse could choose to issue proceedings here. Domicile is an important concept in English family law. In simple terms, it refers to the country a person regards as their permanent home, even if they are currently living elsewhere. Individuals typically acquire a “domicile of origin” at birth, usually from their father, and this remains unless and until they establish a “domicile of choice” in another country by settling there permanently and intending to remain indefinitely.

For expats returning to the UK, domicile can be highly relevant because even long periods spent living abroad do not necessarily change a person’s domicile. As a result, some expats may still be considered domiciled in England and Wales, which can enable the English courts to hear certain family law claims.

The choice of jurisdiction can have significant consequences. England and Wales is often viewed as a financially generous jurisdiction in divorce proceedings, particularly in cases involving substantial assets or a non-working spouse. It is therefore important for returning expats to seek legal advice promptly if divorce or separation is a possibility.

Cross-border jurisdiction disputes can be expensive and complex. In some cases, the timing of when proceedings are issued can determine which country’s court will ultimately deal with the matter. For this reason, it is advisable to seek specialist legal advice as soon as possible if you believe that a dispute involving multiple jurisdictions may arise.

Sarah has recently advised British expats living in Dubai but who retain significant connections to the UK, including the former matrimonial home. There were competing proceedings in the two jurisdictions and Sarah navigated a tricky jurisdiction issue which ultimately enabled her client to obtain a greater settlement than they would have achieved had the matter been dealt with in Dubai.

Pre-Nuptial and Post-Nuptial Agreements in International Marriages

Pre-Nuptial and Post-Nuptial Agreements  in International Marriages

Many expat couples marry abroad or acquire assets in multiple jurisdictions. In these circumstances, pre-nuptial and post-nuptial agreements can play an important role in providing clarity about financial arrangements if the relationship later breaks down.

While pre-nuptial and post-nuptial agreements are not automatically binding in England and Wales, the courts will generally give them significant weight provided that:

  • Both parties entered into the agreement freely
  • There was full and frank financial disclosure
  • Each party had independent legal advice
  • The agreement is fair in the circumstances

For internationally mobile couples, these agreements can be particularly valuable in setting out how assets located in different jurisdictions should be treated. They may also help to reduce uncertainty where spouses have connections to multiple legal systems.

For couples returning to the UK after a period abroad, it may be advisable to review any existing pre-nuptial or post-nuptial agreement to ensure that it remains effective and appropriate under English law. In some cases, it may be sensible to update an existing agreement or enter into a post-nuptial agreement after relocating, particularly where the couple has acquired additional assets overseas or their financial circumstances have changed.

Taking legal advice at an early stage can help ensure that any agreement is prepared in a way that maximises the likelihood that it will be upheld by the courts of England and Wales.

Clients who have entered into a pre-nuptial agreement abroad should seek legal advice promptly after returning to the UK. Different countries have very different rules about the validity and effect of pre-nuptial agreements, and an agreement that is binding in one jurisdiction will not be treated as binding by the courts in England and Wales. In England and Wales, pre-nuptial agreements are not legally binding, but the courts may give them significant weight and may hold parties to their terms where it is fair to do so.

Obtaining early advice allows the agreement to be reviewed to assess how likely it is to be upheld in the UK and whether any further steps should be taken to strengthen it. In some cases, it may be sensible for the parties to enter into a new agreement under English law, or to update the existing agreement so that it better reflects the requirements that the English courts typically consider when deciding whether to give effect to a pre-nuptial agreement.

Can You Still Bring Financial Claims After an Overseas Divorce?

Some expats may have already obtained a divorce in another country before returning to the UK. However, an overseas divorce does not always bring financial matters to a complete conclusion.

In certain circumstances, it may still be possible for a spouse to bring a financial claim in England and Wales after a foreign divorce under Part III of the Matrimonial and Family Proceedings Act 1984. This may arise where the financial settlement reached overseas was limited or did not adequately address assets located in, or connected to, the UK.

These types of claims can be legally and procedurally complex. Specialist legal advice at an early stage is therefore important to assess whether a claim may be available and whether the courts of England and Wales are likely to grant permission for such a claim to proceed.

Sarah has experience advising on claims under Part III of the Matrimonial and Family Proceedings Act 1984, including through her work on the seminal case of Potanina v Potanin. Part III allows a party to apply for financial relief in England and Wales following a divorce that has taken place overseas, in circumstances where the financial provision made abroad was insufficient or where there are strong connections to this jurisdiction.

Many clients are unaware that this route exists. This is often because they assume that once a divorce has been finalised in another country, the financial outcome cannot be revisited elsewhere. However, where one or both parties have a sufficient connection to England and Wales (for example through residence, domicile, or assets located here) it may be possible to seek further financial provision from the English court.

Children and International Relocation

Children and International Relocation

Children are often at the centre of legal issues when expat families relocate. Returning to the UK can raise questions about schooling, residence arrangements, and parental responsibility.

If both parents agree to the move, matters may proceed smoothly. However, difficulties can arise if one parent relocates with a child without the consent of the other parent or without a court order. In such cases, the relocation may amount to international child abduction, particularly where the child was habitually resident in another country prior to the move.

The UK is a signatory to the Hague Convention on the Civil Aspects of International Child Abduction, which provides a framework for resolving cross-border child disputes. Parents considering relocating with children should therefore seek legal advice before making any permanent move.

Where parents separate after returning to the UK, the courts in England and Wales will prioritise the best interests of the child when determining living arrangements and contact with each parent.

Sarah’s advice to parents who are considering returning to the UK with their children is to seek legal advice before making any plans to relocate. Where both parents have parental responsibility, one parent cannot ordinarily remove a child from the country in which they are habitually resident without the consent of the other parent or the permission of the court.

Early legal advice can also help parents understand which country’s courts are likely to have jurisdiction and how a proposed move may be viewed by the court.

Practical Steps for Returning Expats

Expats returning to the UK may benefit from taking proactive steps to manage potential family law issues, including:

  • Reviewing marital agreements and considering a post-nuptial agreement where appropriate
  • Understanding which jurisdiction may apply to any potential divorce or financial claims
  • Clarifying arrangements for children, particularly where relocation is involved
  • Seeking early legal advice if separation is anticipated

Conclusion

Relocating back to the UK can be an exciting new chapter for expat families. However, cross-border family arrangements often involve complex legal considerations that should not be overlooked.

Obtaining specialist advice at an early stage can help individuals understand their rights, avoid jurisdictional disputes, and ensure that both financial and childcare arrangements are properly addressed under English law.

At Edwards Family Law, we regularly advise clients with international family law issues, including expats returning to England and Wales. If you are relocating to the UK and have concerns about divorce, financial matters, or arrangements for children, seeking early legal guidance can help you navigate these issues with confidence.

If you are returning to the UK and have concerns about divorce, financial arrangements, or children, Edwards Family Law can advise you. Request an initial consultation at edwardsfamilylaw.co.uk or email us directly. We respond to all enquiries within 24 hours.

Frequently Asked Questions

Q: Can I get divorced in England if I was married abroad?

A: Yes, provided the courts of England and Wales have jurisdiction. Jurisdiction is based on habitual residence and/or domicile, not where the marriage took place. If you have returned to England or Wales, or have retained a British domicile, it is likely that the English courts will be able to hear your divorce petition.

Q: Does my overseas divorce mean all financial issues are settled?

A: Not necessarily. If you obtained a divorce abroad and have since returned to the UK, it may still be possible to bring a financial claim in England and Wales under Part III of the Matrimonial and Family Proceedings Act 1984, particularly where UK-based assets were not addressed in the overseas settlement. Specialist advice is essential.

Q: I have a pre-nuptial agreement signed in another country. Is it valid in England?

A: It may carry significant weight, but it will not be automatically binding. The English courts will consider whether both parties entered into it freely, with full financial disclosure and independent legal advice, and whether the terms are fair. If you are returning to the UK, it is advisable to have any existing agreement reviewed by an English family law solicitor.

Q: Can I bring my children back to the UK without my ex’s consent?

A: If the other parent has parental responsibility and the children are habitually resident in another country, relocating without consent could constitute international child abduction under the Hague Convention. You should obtain either written consent from the other parent or a court order before making any permanent move.

Q: How quickly do I need to take legal advice if there are cross-border implications?

A: As soon as possible. Jurisdiction in international family law can turn on timing. In some cases, the first party to issue proceedings determines which country’s court will have authority. Delay can also complicate enforcement of financial claims. Early advice is strongly recommended.

Q: What is ‘domicile’ and why does it matter?

A: Domicile is the country you regard as your permanent home. Unlike habitual residence, it does not simply follow where you are living at any given time. Even if you have lived abroad for many years, you may still be domiciled in England and Wales, which could give the English courts jurisdiction over your divorce or financial claims. An English family lawyer can advise on your domicile status.

Written by Sarah Walker, Partner, Edwards Family Law. Edwards Family Law is authorised and regulated by the Solicitors Regulation Authority (SRA number: 658249).

Discovering a spouse’s affair can be deeply painful, and it is very common to wonder whether their cheating means you will receive a larger divorce settlement or a different outcome on child arrangements in England and Wales. In most cases, adultery itself does not change the financial settlement or child arrangements. Still, there are important exceptions.

This guide explains what the law actually says, when an affair might matter, and what practical steps you can take to protect yourself and your family.

1. Does adultery matter legally in the UK?

Since April 2022, you no longer need to prove adultery, unreasonable behaviour, or any other reason to get divorced. The Divorce, Dissolution and Separation Act 2020 introduced “no-fault divorce” to England and Wales, meaning you simply provide a statement that the marriage has irretrievably broken down.

The court does not investigate who is “to blame” for the breakdown. While the emotional impact of an affair is vast, the legal process itself is not about punishing an unfaithful spouse. Previously, adultery was one of five “facts” you could use to prove irretrievable breakdown, but this system no longer exists.

Key point: Whether or not your spouse had an affair, the divorce process is the same. You cannot mention the affair in your application. 

2. Does cheating affect your divorce settlement?

divorce settlement

In most cases, no. English courts do not punish infidelity in the division of assets. The family court’s primary focus is on fairness and on meeting both parties’ needs, not on moral judgment.

When deciding how to divide assets, the court considers the factors set out in section 25 of the Matrimonial Causes Act 1973:

  • The income, earning capacity, property and other financial resources each spouse has or is likely to have
  • The financial needs, obligations and responsibilities of each party, including housing needs
  • The standard of living during the marriage
  • The age of each party and the duration of the marriage
  • Any physical or mental disability
  • Contributions made by each party, including non-financial donations such as caring for children
  • The needs and welfare of any children of the family are a first consideration.

“Conduct” is only taken into account in rare cases where it would be inequitable for the court to ignore it. That threshold is very high and typically involves serious financial or personal misconduct rather than the fact of an affair alone.

A recent reported case which dealt with the issue of “conduct” is the case of Loh v Loh-Gronager [2025] EWFC 483. In this case Cusworth J determined a heavily contested financial remedy dispute arising from a short, childless marriage governed by a pre-nuptial agreement, in which the husband engaged in serious litigation misconduct. The court found that the husband had fabricated or doctored key emails and made systematic unauthorised withdrawals of substantial sums, most of which were treated as advances on his entitlement pursuant to a pre-nuptial agreement. Applying s.25(2)(g) MCA 1973 and Radmacher v Granatino [2010] UKSC 42, the court held that the husband’s conduct crossed the high threshold at which it would be inequitable to disregard it. The court found that fairness required a sanction beyond costs, resulting in significant deductions from the husband’s entitlement under the pre-nuptial agreement and a substantially reduced final award.

Notably, while the husband made some suspicious bank transfers that could suggest personal relationships, it was not any alleged affairs that constituted serious litigation misconduct. He was sanctioned for misappropriation of funds and egregious litigation misconduct, as well as an overall pattern of behaviour that undermined the integrity of the proceedings, for example, posting personal photographs of the wife on Instagram and instructing a private investigator to loiter outside her home. These actions, not marital infidelity, contributed to the court’s finding that his conduct crossed the s.25(2)(g) threshold.

At Edwards Family Law, we frequently act for clients who raise conduct issues within their financial proceedings, and we are able to advise on the merits and prospects of any potential conduct claim. We can guide you on whether such arguments are likely to be relevant, proportionate, and effective in the context of your case.

In a recent matter we acted for a husband whose wife made serious but ultimately false allegations of abuse in Children Act and Family Law Act proceedings. She incurred disproportionately high legal costs pursuing these claims compared with the husband, and the court ultimately penalised her litigation conduct in the financial settlement.

3. When an affair can affect your settlement: financial misconduct

Although adultery itself almost never changes the outcome, how your spouse spent money during the affair can sometimes be relevant. This is often described as “dissipation of assets” or “financial misconduct”.

The amount of money that is dissipated has to be significant and cannot just comprise of gifts or holidays, examples of “financial misconduct” might include:

  • Significant monetary transfers to an affair partner
  • Using marital funds to purchase a property in the affair partner’s sole name without the other spouse’s consent 
  • Setting up the affair partner in a business using marital funds

Where one spouse has used marital funds in this way, the court can take the dissipation into account when deciding a fair settlement. This might mean “adding back” the sums that have been spent so the innocent spouse is not unfairly disadvantaged.

For higher-value or more complex cases, forensic accountants, careful analysis of Form E financial disclosure, and targeted questionnaires can be used to unpick unusual spending patterns and uncover hidden assets or accounts.

Our lawyers have acted in a case where a husband deliberately made himself bankrupt in an attempt to frustrate his wife’s financial claim and spending lavishly (amounting to hundreds of thousands of pounds) on his affair partner. This was a rare instance in which the husband’s financial misconduct, linked to his affair, was relevant to the overall outcome of the case.

4. Does an emotional affair count as adultery?

Legally, no. Under the old divorce law, adultery was defined as voluntary sexual intercourse between a man and a woman. A close relationship involving messages, emotional intimacy, or even kissing, but without sexual intercourse, was not considered adultery.

However, this distinction no longer has a practical effect. Since no-fault divorce was introduced in April 2022, you do not need to prove adultery or categorise your spouse’s behaviour at all. You simply state that the marriage has irretrievably broken down. If an emotional affair has led to serious financial misconduct (described above), that spending can still be relevant to the monetary settlement, regardless of whether it was a physical or emotional relationship.

5. Will an affair affect child arrangements?

affair and child arrangements

An affair alone will not affect custody or contact arrangements. The court’s priority is always the child’s welfare under the Children Act 1989, and having an affair does not make someone an unfit parent.

However, the circumstances around the affair can be important:

  • If the new partner presents a safeguarding risk because of their behaviour, substance misuse, or history
  • If the home environment has become unstable, with frequent arguments, moves, or emotional distress affecting the children
  • If a parent is prioritising the new relationship over their caring responsibilities, leading to neglect or unreliability

In such situations, the court may consider adjusting living arrangements and contact patterns, or imposing safeguards to protect the children’s well-being. The focus remains on stability, safety, and the children’s long-term emotional health, not on punishing a parent for having an affair.

Our team includes specialists in complex children’s matters. Our lawyers have recently acted in a matter where child arrangements and safeguarding had to be considered in light of the fact that a new partner was charged for a serious criminal offence. For more information, see our guide to child arrangements.

6. Can I sue my spouse for having an affair?

No. There is no legal claim for adultery in England and Wales. Unlike some US states, which allow claims for “alienation of affection”, the UK has no equivalent. You cannot sue your spouse or the affair partner for damages.

The only legal avenue is through divorce proceedings and the financial settlement process. If your spouse has misappropriated marital funds in the context of an affair, you can raise this as financial misconduct, but there is no separate claim for the emotional harm caused by infidelity.

7. The emotional reality versus the legal reality

There is often a painful gap between how betrayed spouses understandably feel and what the law can actually do about that betrayal. Many people expect the court to “compensate” them financially for the affair. Still, the legal focus is on meeting needs and achieving a fair, workable outcome for both parties and the children.

That does not mean your emotions are not valid. Feelings of anger, shock, grief, and confusion are widespread. Seeking therapeutic support alongside legal advice can help you process what has happened and make clear, informed decisions about your future.

“Some clients come to us expecting the court to financially penalise their ex-spouse for their behaviour during the marriage. We help them understand that the legal system focuses on practical outcomes, not moral judgements. That said, we fight hard to ensure any financial misconduct is fully accounted for.”

8. Practical steps if you have discovered an affair

Once the initial shock subsides, it can help to take some calm, practical steps:

1. Prioritise your wellbeing

Ensure you are eating, resting, and relying on trusted friends, family, or a counsellor. You do not have to make every decision immediately.

2. Gather key financial information

Gather all relevant financial documents that are readily accessible, such as bank statements, mortgage records, investment and pension information, and any business accounts that can reasonably be produced. This should be done in line with the principle from Imerman v Imerman, which provides that disclosure should generally be limited to documents that can be “found on the kitchen table,” without breaching your ex-spouse’s confidentiality or going beyond what is proportionate.

An “Imerman document” refers to a document in divorce or financial proceedings that is confidential and personal to one spouse, often business, personal, or financial records, which the other spouse cannot access without consent or a court order.

This is a complex area of law, and you should seek specialist legal advice regarding which documents you are entitled to access. At Edwards Family Law, we have extensive experience advising clients on the management and disclosure of “Imerman” documents.

3. Document any suspected financial misconduct

Keep a record of unusual withdrawals and transactions. However, avoid any unlawful access to accounts or devices.

4. Avoid retaliatory action

Try not to make significant financial decisions, move money, or confront the affair partner in a way that could escalate conflict or risk allegations against you.

5. Seek early legal advice from a specialist

Speaking to an experienced family solicitor at an early stage can help you understand your options, timelines, and likely outcomes before you decide whether to separate or divorce.

6. Consider emotional and relationship support

Whether you are considering reconciliation or separation, professional counselling can support you in processing the betrayal and thinking clearly about the future.

9. Frequently asked questions

Does cheating affect divorce settlements in the UK?

Generally, no. The court is not there to punish a spouse for infidelity, and adultery alone does not usually entitle the other spouse to a larger share of the assets. However, if the cheating spouse has engaged in serious financial misconduct related to the affair, this may be taken into account when dividing assets.

Can I get more money because my spouse cheated?

You are unlikely to receive more money just because of the affair, but you can raise concerns about assets that have been spent or hidden as part of the relationship. The court will still base its decision on needs, resources, and fairness overall, not on moral blame.

Is adultery still grounds for divorce in England and Wales?

No. Since the introduction of no-fault divorce in April 2022, you no longer need to prove adultery or unreasonable behaviour to obtain a divorce. A simple statement of irretrievable breakdown is enough, whether or not an affair has occurred.

How does an affair affect child custody?

An affair on its own does not usually affect child arrangements. The court will consider the children’s best interests, including whether the new relationship presents any safeguarding issues or instability that might affect the children’s welfare.

Can I claim compensation for emotional distress caused by the affair?

No. There is currently no separate claim in English family law for damages for emotional distress caused by adultery. While the emotional impact is very real, the financial settlement is based on needs, resources, and fairness rather than compensation for hurt feelings.

What if my spouse denies the affair?

It does not matter for the divorce itself, as you no longer need to prove adultery. However, if you are claiming financial misconduct, you will need evidence of the misappropriation of funds. This can often be discovered through the financial disclosure process by way of exchange of Forms E.

Does it matter if my spouse is now living with the affair partner?

This can be relevant to the financial settlement. If your spouse is now co-habiting, their housing costs may be shared, which could affect the court’s assessment of their needs. It does not, however, mean you are automatically entitled to more.

How Edwards Family Law can help

If you have discovered your spouse is having an affair and are unsure what to do next, our team can guide you through your options, from initial advice and financial disclosure through to negotiated settlements or court proceedings where necessary.

We provide discreet, strategic advice tailored to your personal and financial circumstances, with a particular focus on protecting children’s welfare and long-term financial security.

“For a confidential discussion about your situation, contact one of our partners Kelly Edwards, Daniel Chalmers or Sarah Walker, who specialise in complex financial remedy and high net worth divorce cases. Call [020 3983 1818] or email [contact@edwardsfamilylaw.co.uk] to arrange an initial consultation.” Edwards Family Law is authorised and regulated by the Solicitors Regulation Authority (SRA number: 658249).

Overview

In Loh v Ardal Loh-Gronager (following earlier reported judgments in Loh v Ardal Loh-Gronager [2024] EWFC 241 and Y v Z [2025] EWFC 221), Cusworth J heard a heavily contested final financial remedy hearing arising from a short childless marriage. 

Cusworth J described the husband’s actions as amounting to “the most serious level of litigation misconduct that may be seen in these courts”. While the judge was swiftly able to conclude that the husband’s deplorable conduct merited significant sanction, he had to contend with whether this should solely be addressed in the arena of costs or also in the substance of the award made. 

Background 

The wife was extremely wealthy, with substantial business assets and trust interests. The husband, a former investment banker, entered the marriage with comparatively modest assets. The parties entered into a comprehensive pre-nuptial agreement in March 2019, expressly disapplying the sharing and compensation principles and defining “Separate Property”, “Joint Property”, and a limited “exceptional one-off fund” of £100,000 intended to provide short-term security on separation.

Although the parties had been living together for a few years before their marriage the marriage lasted approximately four years, and they had no children. 

Under the pre-nuptial agreement, the husband’s accrued entitlement at separation was agreed to be £6,449,802, subject to accounting for sums already received.

Disputed Issues

The court was required to determine whether several substantial payments taken by the husband during the marriage were:

  1. Gifts or Separate Property, as the husband contended; or
  2. Unauthorised withdrawals, to be treated as advances against his entitlement under the pre-nuptial agreement. 

The disputed sums comprised:

  • £655,000 withdrawn from joint accounts (2020–2021);
  • £750,000 withdrawn later to fund the running costs of the husband’s investment business;
  • £2.05m taken from mortgage funds under a power of attorney (November 2022); and
  • £1m transferred shortly before separation (April 2023).

Central to the husband’s case was his reliance on three emails said to evidence the wife’s knowledge and consent.

Key Findings

Loh v Ardal Loh-Gronager - Key Findings

Creation and/or doctoring of emails: Cusworth J found that on the balance of probabilities, that the husband had created and/or doctored three emails relied upon to support his case. The originals had been deliberately destroyed, and the PDFs produced were found to be unreliable. This was described as serious litigation misconduct, undermining the integrity of the court process.

Joint Accounts and Separate Property: Cusworth J stated that even if the husband had understood that the money in the joint account was now joint property, he could not have sensibly thought that by taking it for himself it would become his Separate Property. The judge also rejected the husband’s case that those funds had been converted from joint to Separate Property by the husband taking them. He stated “the wife had made them available to meet joint expenses. If they were not so employed, but were removed from the joint accounts, then they would revert to being notionally hers in the absence of any different express agreement”. 

Individual sums: In relation to the individual sums the judge found the following: 

  • The £655,000 was systematically removed and invested by the husband without consent. The judge therefore treated this as sums taken on account of his pre-nuptial agreement entitlement. 
  • The £2.05m that the husband was taken from the mortgage account was found not to be a gift. They were funds that were intended to continue to service the mortgage account. This was also treated as an advance on his entitlement. 
  • The £1m that the husband took during the marital breakdown was found to be done under false pretences and again treated as an advance on his entitlement under the pre-nuptial agreement. 
  • In relation to the £750,000 that was transferred for business running costs, although unauthorised, the court accepted that had the wife known that they were being used for this purpose she would probably have approved of that use. 

Conduct and Fairness

Applying s.25(2)(g) MCA 1973 alongside the fairness test in Radmacher v Granatino [2010] UKSC 42, the court held that the husband’s conduct plainly crossed the threshold at which it would be inequitable to disregard it.

The conduct included systematic unauthorised withdrawals, concealment of financial activity, attempts to intimidate and distress the wife (including posting personal photographs of the wife on Instagram and instructing a private investigator to loiter outside of the wife’s London home on her birthday and pose as a member of the press). 

While the judge declined to extinguish the husband’s entitlement to a settlement entirely, he found that fairness did require a partial substantive sanction beyond costs alone. 

Outcome

Starting from the PNA entitlement of £6.45m, the court deducted:

  • £655,000
  • £2,050,417
  • £1,000,000
  • plus 50% of the £750,000 business costs (£375,000) to penalise the husband for his conduct. 

This resulted in a final award of £2,369,385 to the husband.

The court indicated that there would be an indemnity costs order made against the husband, to be determined separately.

Key Takeaways

Conduct is rarely taken into account in financial remedy proceedings, reflecting the court’s consistent reluctance to allow litigation to descend into moral judgment or satellite disputes about behaviour. 

Section 25(2)(g) MCA 1973 sets a deliberately high threshold, providing that conduct will only be taken into account if it is so serious that it would be inequitable to disregard it. This case is a striking example of that threshold being met. 

The court found that the husband had engaged in egregious litigation misconduct, including the fabrication of evidence and deliberate attempts to intimidate and distress the wife during the proceedings. In those exceptional circumstances, the judge held that fairness required the husband’s entitlement under an otherwise valid pre-nuptial agreement to be adjusted, demonstrating that while conduct arguments will usually fail, they will succeed where behaviour fundamentally undermines the integrity of the process and the court’s confidence in the party advancing them.

Every case is different and will turn on its own specific facts. There is a question over whether a judge would take the same approach to this conduct if there was no pre-nuptial agreement or if the funds in the joint account had not all so clearly emanated from one party, in this case the wife. At Edwards Family Law we frequently act for clients who raise conduct issues within their financial proceedings, and we are able to advise you on the merits and prospects of any potential conduct claim. We can guide you as to whether such arguments are likely to be relevant, proportionate, and effective in the context of your case.

You’ve just received a substantial inheritance from a deceased parent or relative. It may represent family legacy, financial security, or funds intended for your children’s future. Then your marriage deteriorates, and you’re facing divorce. Here’s the critical question: Will you have to share your inheritance with your spouse?

The answer isn’t simple. Whether inherited money remains yours, is partially divided, or is fully divided depends on multiple factors, such as when you inherited it, how you used it, whether you mixed/mingled it with marital assets, and what the court decides is “fair.” This complexity makes inheritance one of the most contested issues in divorce settlements in family law

This comprehensive guide explains how inheritance is treated in divorce, how to protect inherited wealth, and what to do if inheritance issues arise in your settlement negotiations/court proceedings.

The Basic Legal Principle: Is Inherited Money Separate Property?

inherited money

The Starting Position

In English law, inheritance is considered non-matrimonial property. This means:

Money inherited during marriage remains, in principle, separate property. It’s not automatically shared equally with your spouse on divorce. However, the English court has substantial discretion to override this presumption if they believe fairness requires it. In some cases, inherited assets may be included in the division of assets, with the court making an unequal division if the circumstances or needs of the parties justify a departure from an equal split.

Robson v Robson (2010)

The landmark case of Robson v Robson confirmed that inherited property is not treated as matrimonial property, even if received during the marriage. However, the court also confirmed that:

Inherited property can be considered as an available resource. If it is necessary to meet a spouse’s financial needs, courts may make claims against inherited wealth. The weight given to inherited property depends on its use and the circumstances.

Bottom line: Inherited money is protected but not absolutely insulated from division in divorce.

How the English Family Court Treats Inherited Money: Key Factors

The court considers various factors when deciding whether inherited money remains yours or is divided:

1. When the Inheritance Was Received

  • During the marriage: The longer the marriage continues, the more likely inherited assets become intermingled with marital assets. If inherited assets are mingled then they will likely be available for division on divorce.
  • After separation: If you receive your inheritance after separation, it generally will remain separate unless one spouse cannot meet their needs from their share of the existing assets.
  • Once a “clean break” order has been made: Once a final financial order has been made with a clean break, all future financial claims between spouses are dismissed. Any inheritance received after that point is a post-order asset, and your ex-spouse has no entitlement to it. (Although this assumes that full and drank disclosure wad made at the time the order was approved).

2. How You Used the Inherited Money

This is critical. The court will distinguish between:

  • Money or assets that are “ring-fenced” (i.e. kept completely separate): This includes where funds are held in a separate bank account in your sole name and have not been mixed with marital assets and has not been used for the family’s benefit (for example payment of a mortgage secured against the family home).
  • Partially Mixed: An example of partial mixing is where you used some of the inheritance for a down payment on a family home and/or contributed to the payment of the mortgage from your separate inherited assets.
  • Fully Integrated: This would include a situation in which your entire inheritance was used to pay for a family home and/or used to meet family living expenses. You may also have spent your inherited funds on joint family projects or investments, thereby co-mingling them with marital assets. If you placed inherited money into a joint account and used it for shared expenses, the court may also find it more difficult to exclude it from consideration.

3. The Length of the Marriage

  • Short Marriage (1-5 years): If you divorce after a short marriage, the court will be more reluctant to divide assets not acquired during the marriage (unless there are children and it is necessary to invade inherited assets to meet needs). 
  • Medium Marriage (5-15 years): How your inheritance has been deployed will be critical. The court may invade inherited assets to meet needs, especially if there are children of the marriage.
  • Long Marriage (15 or more years): The longer the marital partnership, the more likely the inherited assets will have been mingled and therefore treated as marital. It is also more likely that inherited assets will need to be invaded to meet a needs claim.

4. The Financial Needs of Your Spouse

This is crucial. Even if inheritance is technically separate property, if one party’s financial needs cannot be met from their own resources combined with their share of the matrimonial pot, the court may order that assets be divided equitably to prevent hardship.

This is divided into housing and income needs. If there is not enough money in the matrimonial pot and there are inherited assets, the court may order that a portion of the inherited property be used to meet needs. The inherited property will be divided to ensure your spouse is not left in financial hardship. If your spouse is financially independent or has adequate resources, inherited property is much more likely to remain untouched. 

5. Whether You Have Other Matrimonial Assets to Meet Needs

If you have sufficient other matrimonial assets (marital property, retirement savings, other investments), the court is more likely to protect inherited property. If inherited wealth is your only significant asset, the court may be more willing to divide it (although depending on the value of your inheritance they will not necessarily divide it equally). 

Civil Partnership and Divorce: How Inheritance Is Treated

Civil Partnership and Divorce

The principles governing civil partnerships are the same as those for married couples. Still, there are important nuances to consider, especially when dividing matrimonial assets and inherited wealth.

When determining how to divide assets in a dissolution of a civil partnership or divorce, the court will consider the same factors as they would upon a dissolution of a marriage. As in divorce arising from marriage, the overriding principle is fairness, and the court’s primary aim is always to ensure that the financial settlement meets the needs of both parties and any children.

Pre and Post-nuptial agreements

Pre-nuptial and post-nuptial agreements can play a crucial role in protecting inherited assets in both marriages and civil partnerships. While such agreements are not binding in England and Wales, they are being given increasingly significant weight. Such agreements can clarify how inherited and other assets will be divided upon separation, providing greater certainty and protection for inherited wealth.

Protecting Inherited Wealth in Divorce

1. Keep Inheritance Completely Separate

If you’re anticipating or have received an inheritance it is important to try and “ring fence” your inheritance by keeping it entirely separate. 

  • Bank Accounts: It is advisable to open a separate account in your sole name. You should not deposit marital funds into this account or allow your spouse to access the funds in that account. You should keep all your transaction records so that in the event of a divorce you can evidence that the funds have been ring fenced.
  • Investments: Invest inherited funds in separate investment accounts in your sole name. It may be sensible to invest via a different financial institution from the one used for marital investment accounts, although that is not essential provided your inheritance is clearly kept in a separate account. You should maintain clear records of the source of the investments.
  • Property: If you own real estate separately, it is advisable to keep or purchase the property in your sole name and it is essential that you do not include your spouse’s name on the title. Do not use inherited property as a marital residence (if possible).
  • Documentation: Keep copies of inheritance documents (will extracts, tax documents, transfer documents). Maintain records showing the source of the inheritance and document date of receipt and fund movements. 

2. Create a Will or Trust Protecting Inherited Wealth

Before marriage or early in marriage:

Update your will to protect inherited assets for your children or heirs. Consider trust structures that protect inherited family wealth. 

3. Enter into a Post-nuptial Agreement

If you’ve already received an inheritance (or expect one) and want clear protection it is advisable to enter into a post-nuptial agreement (agreement signed during marriage). This will document that inherited wealth remains separate property. The agreement should specify how inherited property is treated if the marriage ends. Both parties must receive independent legal advice for enforceability.

4. Avoid Co-mingling Inherited Funds

You should try and keep your inherited property separate from marital property by avoiding co-mingling. This means there will be less ambiguity as to the source of the funds in the event of a divorce and can lead to fewer disputes and lower legal costs in the long-run. 

5. Full Financial Disclosure 

Full and frank disclosure of inherited property is essential. If inherited assets are not disclosed and your spouse later becomes aware of this, they may make an application to the court to set aside the financial order.

If you are found to have been dishonest in your disclosure, there may be adverse costs consequences. In addition, it is likely to damage your credibility before the court and may result in you losing the judge’s confidence and sympathy over the longer term and you may get a worse result than if you had just been full and frank from the outset. 

6. Obtain Legal Advice Early

If you are considering a divorce and you have inherited assets you should consult a family law solicitor early so that you can discuss with them how best to protect your inherited wealth and understand what is at risk. 

The Role of Your Solicitor in Inheritance Matters

family law solicitor for inheritance matters

A specialist family law solicitor helps by:

  • Evaluating whether your inherited property is protected or at risk.
  • Gathering evidence showing the inheritance source and how funds were used.
  • Negotiating with your spouse’s solicitor to exclude or limit claims on inherited property. 
  • Drafting agreements that protect inherited wealth.
  • If the spouse has received an inheritance, investigate and recover it.
  • Presenting evidence effectively if inheritance disputes go to court.

Why Choose Edwards Family Law for Inheritance Matters?

At Edwards Family Law, we have extensive experience protecting inherited wealth in divorce and family law proceedings. 

Edwards Family Law specialises in protecting the interests of high net worth clients in family law matters, including inheritance protection, asset division, and pre-nuptial and post-nuptial agreements. Our team combines family law expertise with forensic financial analysis to protect clients’ interests and assets.

This article is for general information purposes only and does not constitute legal advice. Family law continues to evolve, and each situation is unique. For advice specific to your situation, contact Edwards Family Law.