Women who are banking on a short marriage and who will make a lot of money in the divorce should take note.
If you divorced a wealthy spouse 25 years ago, you would probably be much richer than if you ended up in court today.
Britain is slowly losing its status as the world’s divorce capital, with courts now handing out less money to ex-couples.
In some cases the wife is the richer partner, but in the vast majority of cases it is the husband who comes out better off.
In 2000, wives had the comfort of knowing that large divorce settlements would include a portion of the equity they had accumulated during their marriage and, more often, alimony until they remarried or until their ex-husband retired or died.
Why it’s worth it: Comedy legend Harold Lloyd in another sticky situation
The law recognised the crucial role played by wives in raising children. As a result, they were granted equal rights to the money earned by their husbands and equal participation was born.
It was only ten years ago that the law began to take a different direction, as judges interpreted the legislation in a new light. To the delight of many husbands, the concept of the wife’s ability to work and contribute to his needs after divorce was introduced.
Alimony payments are now being severely curbed and are no longer considered to be lifelong but are awarded for a limited period.
As a divorce attorney, I have worked on thousands of cases over 40 years and I can see how disappointing this change of mindset has been for those wives who were married to wealthy men for short periods. They can no longer expect to emerge from the relationship wealthier than before the marriage.
Courts are now working toward what is known as a clean break, where each party is expected to support themselves after the divorce. The wife can no longer automatically expect a share of any bonuses or wealth accumulated after the divorce, as she is deemed not to have contributed to that post-separation wealth.
Currently, payments are based on needs, meaning a place to live and sufficient income to cover the expenses that allow her to be independent and, where appropriate, a part of her husband’s pension.
Joint life orders (payments that continue until one half of the ex-partner dies) have gradually begun to be phased out in favour of trying to settle (and pay in advance) the wife’s support claims, based on her actual needs or for a set period, such as two, five or ten years.
Britain is slowly losing its status as the world’s divorce capital, with courts now handing out less money to ex-couples.
Of course, women married to very wealthy men for 20 years or more can expect to receive long periods of maintenance and, in even rarer cases, a life together with half of all assets, including pensions. As marriages become shorter (the average duration in the UK is 12.9 years), such arrangements are becoming increasingly rare.
In one case, the wife, whom we will call Natasha, had been married for only four years, did not work, and the couple had no children. She enjoyed a very luxurious, high-society lifestyle. Still, she grew bored with her elderly, millionaire husband and began divorce proceedings, expecting a large compensation. But it did not happen.
The court ordered Natasha to sell her vast collection of designer jewellery and handbags that her husband had bought her and to contribute to her independence. The support claims were reduced after two years.
In another case, a woman we’ll call Natalie completely misunderstood the meaning of “reasonable needs.” Her list ran to seven pages. She claimed she needed £3,000 a month for food for herself and her two children, £1,000 a month for cinema and theatre tickets, £20,000 a year for holidays and £50,000 for clothes. She claimed the cost of her clothes was “an investment” to help her find a new husband.
She also asked for £400 a month to have freshly cut flowers in the hallway of her mansion. She was slightly perplexed when the judge asked her if she had ever “considered buying dried flowers as an alternative”. As for the suggestion of work, Natalie turned a rather pale shade of green.
“What can you do besides work in a shop?” the husband’s lawyer sarcastically asked in court. “But isn’t it true that you trained and qualified as an accountant? Is it possible that with a few months of further training you could start earning money again?”
—No! I haven’t worked for five years! —Natalie exclaimed. —I’m 48 years old and I don’t want to go back to work.
Natalie was shocked when her husband’s legal team presented evidence of his potential earning capacity and the court credited him with the same.
“But I don’t want to work…” he replied. The judge, a woman in her 60s, made it very clear: “Madam, nowadays we all have to work until we are 70 and you are no exception.
“Maintenance is not a life-long support and the needs that are said to exist are excessive. Even if they were reduced to a realistic level, at least half of them could be covered by work and one’s own resources.”
She received child support for five years, until her youngest son finished college.
In some cases, when sufficient capital is available, the credits can be capitalized, that is, calculations are made to determine a sum that allows the support needs of the ex-partner to be covered, which over time is reduced until it reaches zero.
These equations take into account the wife’s life expectancy, her health, investment performance and inflation. For example, if a wife is 50 years old and her needs amount to £50,000 per year, she can receive £970,000 to capitalise all her needs. If a wife is 74 years old and needs £40,000, the capital can be £362,000.
And spouses who demand that their lifestyle be maintained will no longer be accepted by the courts. If the assets within the marriage no longer suffice to satisfy the ex-wife’s demands, she will be required to contribute to her own future.
And my advice? Always caveat emptor (buyer beware), for both husbands and wives.
Some links in this article may be affiliate links. If you click on them we may earn a small commission. This helps us fund This Is Money and keep it free to use. We do not write articles to promote products. We do not allow any commercial relationships to affect our editorial independence.