Will divorce cost me my property portfolio?
It has been reported that Jason Manford has been selling off his property portfolio to “pay off” his first wife from whom he was divorced in 2017.
We do not know how accurate these reports are, nor the terms of any settlement and/ or court order, but the reports do raise a few questions.
Can the court make you sell your property?
The short answer is yes. The court has the power on divorce to order that property is sold and the proceeds of sale are divided in a certain way or that one party transfer their interest in a property to the other.
What other orders can a court make?
Aside from property adjustment orders the court can make orders that one party pay a certain sum of money to the other (lump sum orders), orders that share pension benefits (there are different types) and/ or orders that one party make regular payments to the other (known as maintenance or periodical payments).
What are the factors the court looks at when deciding what order or orders are appropriate?
The factors a court must look at are set out in section 25 Matrimonial Causes Act 1973 and are as follows:
- The income, earning capacity, property and other financial resources which each of the parties to the marriage has or is likely to have in the foreseeable future.
- The financial needs, obligations and responsibilities which each of the parties to the marriage has or is likely to have in the foreseeable future.
- The standard of living enjoyed by the family enjoyed before the breakdown of the marriage.
- The age of each party to the marriage and the duration of the marriage.
- Any physical or mental disability of either party to the marriage.
- The contributions which each of the parties has made or is likely to make in the foreseeable future.
- The conduct of each of the parties (which has to be quite significant and is rarely taken into account).
The priority of the court is meeting the needs of any child under the age of 18.
When parties agree matters out of court solicitors will usually point them towards these principles in coming to an agreement.
Why would Jason Manford be selling property now if he divorced in 2017?
We can only speculate as to why this might be but some possible reasons might be:
- The properties simply took a long time to sell
- The parties agreed to defer the sales for financial planning or other reasons
- There was an order that the properties be sold only if Jason Manford defaulted on another part of the order eg paying a lump sum order
- It is also possible to get divorced and resolve your financial arrangements later, although this is unusual.
One point which is relevant here is that the court very often can be “black and white” in terms of the orders it makes if parties cannot agree and, for example, may simply order a property portfolio be sold immediately rather than staggering sales to try to minimise tax. One reason why it is always a good idea for parties to try, if they can, to agree matters is that they can potentially come to a much more sophisticated agreement to benefit everybody.
What should I do if I am worried about losing my properties or anything else?
If you have any concerns about the financial impact of divorce you should take specialist family law advice. This applies whether or not you are going through a divorce now. It may be that you are due to get married and could benefit from a pre-nuptial agreement to provide you with some security or, if you are married, you may want to consider a post- nuptial agreement.