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Divorcing wife granted extra £500k for sacrificing career

A wife who sacrificed her career for her marriage has been awarded an extra £500,000 as part of her divorce settlement.

The husband in the case was aged 48 and the wife was 50. They were both high earners in investment finance when they began cohabiting in 2004.

They married in the US in 2006. The wife gave up her career when they relocated to England a few months later and decided to start a family.

They had two children, now aged 14 and 11. The husband continued to earn well and the family enjoyed a comfortable lifestyle.

The marriage broke down in 2021. The couple sold the matrimonial home and put the proceeds in a joint account. They each rented a property pending the outcome of divorce proceedings.

The children divided their time equally between them.

The wife’s assets in her sole name totalled around £650,000; the husband’s totalled around £6.8 million, and the joint assets were around £4.2 million. The wife’s pension was £225,000; the husband’s was around £1 million.

The Family Court held that, by applying the sharing principle, a 50-50 division of the capital assets would be achieved by the wife receiving the following: a house in the US that the parties jointly owned, a 39% share of the husband’s pension, a 50% share of his stocks, a 50% share of the joint accounts, and an equalising lump sum of around £2.1 million from the husband.

The couple would then have assets of around £6.5 million each.

They each needed to purchase a new home. A housing fund of £2.5 million for each of them from their capital assets would generously provide for a suitable home for them and for the children, bearing in mind the standard of living they had jointly enjoyed during the marriage.

In the unlikely event that the wife never worked again, she would still have £4 million in capital assets after deducting the housing fund. That would provide her with £175,000 per annum for the remainder of her life.

Therefore, there was no justification for making any additional provision for her based on her needs.

The wife had been a high earner in the years before the marriage. The reasons for her loss of position were relationship-generated sacrifices she had made. Despite a line of authorities discouraging the pursuit of compensation claims, and despite the outcome of the sharing principle covering the wife’s needs, her case was one of the rare and exceptional cases where a compensation award in her favour was appropriate.

With those factors in mind, a fair outcome would be achieved by adding five tranches of £100,000 to the provision for the wife, to be paid as a lump sum of £500,000 on a clean-break basis. The resultant modest departure of equality on capital was justified in the circumstances.

The parties had agreed that the husband would pay all future school fees for the two children. Regarding child periodical payments, it was appropriate to order him to pay £25,000 per child per annum until they respectively ceased full-time education.

Case citations: TM v KM Family Court [2022] EWFC 155 Judge Hess

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The contents of this article are general information only. The information in this article is not legal or professional advice. The law may have changed since this article was published. Readers should not act on the basis of the information included and should obtain independent expert advice from qualified solicitors such as those within our firm.

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