In October of last year the Court of Appeal handed down a decision that will hopefully assist the approach taken by courts when considering ancillary relief cases where much of the wealth being contested was inherited by one party to the marriage. In Robson v Robson1 the husband appealed against an award made to his wife in ancillary proceedings. The case involved the breakdown of a 20-year marriage, which had produced two children aged 17 and 20, and the subsequent dispute over the redistribution of the parties’ assets. The husband’s assets were valued at more than £22 million, predominantly inherited from his father before the marriage, whereas in contrast the wife had assets valued at less than £350,000. The decision of the House of Lords in White v White2 introduced the principle of the “yardstick of equality”, as the basis for settling ancillary relief proceedings, a concept which has given rise to considerable debate when deliberating the redistribution of wealth inherited by one party to a divorce. The difficulty in this area was not improved with the combined decision in Miller v Miller; McFarlane v McFarlane3 the House of Lords in this case providing two competing approaches to departing from the principle of equality. It may be hoped that the decision in Robson will provide greater guidance in future cases of this kind. When considering ancillary relief cases the courts are required to follow the Matrimonial Causes Act 1973, s.25, which imposes a duty on the court to consider all the circumstances of the case, the welfare of any children under the age of 18 being the first consideration and following that the specific factors listed under s.25(2). As inherited wealth forms part of the property and financial resources of a party, it was held that it could be taken into account in considering a settlement pursuant to s.25(2)(a). The main objective of the Act was to ensure that a fair and just result was reached. Need, compensation and sharing would usually guide that search for fairness, aided by numerous other factors that the court could take into consideration; such as the length of the marriage and the needs of the parties. The Court of Appeal held that it was not only the source of the wealth which was relevant but its nature, and both might be considered a good reason for departing from the principle of equality. The court saw that ‘the parties had jointly elected to live off [the inherited assets] and, in effect, use them as a substitute for earned income’; the couple had relied heavily on the assets during the marriage, at the expense of protecting them for future generations, and this led the judges to conclude that it would therefore be acceptable to award the wife a settlement out of the estate. It seemed reasonable to conclude that the longer that the wealth had been enjoyed by both parties during the marriage, the less fair it was that it should be ring-fenced so as to render it unavailable to meet a party’s needs generated by the relationship. The wife was subsequently awarded £7 million, half of which as a lump sum to invest in an appropriate property the rest in periodical payments. It was made clear that the approach to inherited assets will not always be the same. The fact that the wealth was inherited and not earned justified it being treated differently from wealth accruing from the joint efforts of the parties (see Miller; McFarlane). However, it very much depends on the circumstances of each case, and Robson the special inherited nature of the assets was not enough to protect them, making it clear that no assets are off limits when it comes to ensuring that a divorce is settled in a fair manner. If you have any concerns about how your assets are likely to be applied in the event of a divorce why not speak confidentially with one of our expert team of family lawyers. For a FREE initial consultation, telephone 01245 228106. * The above is not legal advice; it is intended to provide information of general interest about current legal issues.
