Many people assume that a Will made while you are married is automatically cancelled if you later get divorced . This is a common misconception, and the truth is that getting divorced does not mean your Will is cancelled. Your Will remains valid, but...
Failing to Disclose Your Assets before Divorce Can Haunt You Later
A failure to accurately disclose your financial position on divorce may seem clever to some but can come back to haunt you years after the event. Exactly that happened when a wife failed to reveal to her husband that she was on the verge of spectacular business success before their divorce settlement was finalised.
The couple were both wealthy people before their marriage and between them had assets worth about £6 million when they divorced, of which he held all but about £930,000. In order to achieve a clean break, a settlement was agreed whereby the husband was to pay the wife a £350,000 lump sum and to transfer a house into her sole name.
He also agreed to transfer to her his shares in a technology company, which she had founded before the marriage, for £225,000. The company had never made a profit during the marriage. However, about six weeks after the divorce settlement, it emerged that a hedge fund was to invest £3.5 million in the company in a deal which valued it in the tens of millions. The husband was left with a deep sense of grievance that the settlement had been unfair.
The High Court found that the wife had not perpetrated a deliberate fraud and had not set out to deceive the husband. However, it also ruled that the disclosure she made prior to the settlement was not full and frank. When the success of her company became clear, her response to inquiries from the husband’s solicitors had been both unhelpful and actively misleading.
In the light of the wife’s failure to properly comply with her duties of disclosure, the husband could not be said to have given his full consent to the settlement. In those circumstances, it was set aside and directions given for re-assessment of the parties’ entitlements in respect of the marital assets.