To separate or divorce – that is the question
It is hard to have missed Jada Pinkett Smith’s many interviews over the last week detailing that she and Will Smith have been ‘separated’ for the last seven years.
The couple who have been married since 1997, supposedly separated in 2016, meaning they were no longer together during Will’s infamous Oscar’s speech last year in which he referred to Jada as his wife.
Technically, Will was not lying when calling Jada his wife, as despite their prolonged separation, legally they remain married.
Whilst Jada’s interview has caused media frenzy both here and across the pond, legally, what does her revelation actually mean?
Many couples like the Smiths decide to physically separate but to do not proceed with a divorce and resolve their financial matters. However, this can become problematic months or years down the line.
If there is no chance of reconciliation, it is advisable to proceed with a divorce and come to a legally binding financial agreement as soon as possible.
Why delay is not always your friend
When you do decide to proceed and resolve financial matters, it is highly likely (and is advisable) that both parties provide full and frank disclosure up to the present date, to establish their respective financial positions. Only once you are aware of what is at stake, can you then begin to negotiate from an informed perspective, hopefully facilitating a resolution which is fair in all of the circumstances.
What if your capital assets or income has substantially increased in the period since separation?
What if you have since received a substantial inheritance?
What if your pension provision has drastically increased?
For example, in Will Smith’s case, it was reported that he received income of approximately $40,000,000 for his leading role in the film King Richard alone. This was received in 2017, post separation. However, this vast income will be evidenced in any financial disclosure which takes place as part of the divorce process.
In those instances, a party may argue that the increase in capital/income as from the date of separation, should be ringfenced i.e., assets accrued since separation should not be included within the marital pot available for division.
Whilst this argument may in some cases be successful, post separation accrual may not be ringfenced in circumstances where the other party can show that their reasonable needs cannot be met from the matrimonial pot alone.
Case law has shown that in those instances, the court may ‘invade’ those assets which would otherwise be ringfenced in order to meet the other party’s reasonable needs.
In such cases, the burden of proof is on the party claiming that their needs cannot be met from the matrimonial pot to establish their case.
What if one party in a divorce has incurred substantial debts post separation?
Again, within the disclosure process the parties’ assets and liabilities will be taken into account and will therefore impact upon the parties’ financial positions. It may be that the party who accrued the debts is successful on an argument that they should receive a greater share of the capital available in order to clear their liabilities.
What if one party has had a change in circumstances and can no longer work?
In this example, that party may try and seek spousal maintenance which they may not have been able to establish a case for had financial matters been resolved at the time of separation. Consequently, instead of achieving a clean break, you may find yourself in a situation whereby you have to continue financially supporting your spouse for years to come.
All of the above are situations which may result in one party receiving an outcome which is not as financially advantageous as it would have been had they dealt with financial matters upon their divorce at the time of their separation.
It is imperative that if you and your spouse do come to a financial agreement, the terms of the agreement reached are reflected within a consent order to be lodged with the court. Only once the order has been approved and sealed by the court, will it be final and binding upon you both.
Nobody can predict what the future holds, and you do not want to be in a regrettable situation year(s) down the line. It is advisable to proceed and resolve financial matters on your divorce without delay, and our specialist team at Maguire Family Law are able to assist and advice you throughout this process.