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Marriage and divorce should trigger a complete review of your financial situation and wealth managers are experienced in advising in such situations.

There are many areas to consider when it comes to wealth management and divorce – whether you are considering getting married, already are married or are going through a divorce. Your marital status and dependents will be key parts of your initial conversations with a wealth manager, and they will also regularly check whether your status has changed (and therefore if investment strategy may need to be reviewed). Some private banks even go so far as to offer specialist services for those in the process of going through a divorce, such as bridging loans to cover legal fees.

How it works

(Details correct at September 2014)

Marriage – and divorce – are huge life events and so correspondingly they will have a significant effect on your financial situation. Your wealth manager (and legal advisers) will take care to understand your situation and can provide vital guidance. Those with significant assets and more complicated financial affairs need to be aware of all of the implications of any change in their marital circumstances.

Below are some key areas for consideration when it comes to wealth management and divorce.

Prenuptial agreements

Prenuptial agreements remain something of a grey area in English Law; they are not legally binding as yet, but recent high-profile cases involving wealthy individuals illustrate that they are being given increasing weight when it comes to the splitting of assets – provided the agreement was not made under duress and is reasonable in the eyes of the court.

Post-nuptial agreements, where couples reassess their financial agreements in light of events such as children coming along, are a newer development which tend to be recognised only in jurisdictions like the US.

Assessing your assets on divorce

Whether your divorce is contentious or more amicable in nature, you will still need to take professional advice. You should have a financial adviser carry out a full assessment of both your financial position and that of your former partner, including your property/properties, other jointly-held assets (both liquid and illiquid), liabilities such as mortgages and loans, pension savings and life insurance policies.

You are also likely to want to put provision in place for the maintenance and education of any children you may have.

Splitting pensions

Splitting pension savings is one of the most challenging areas of high net worth divorce and working out your financial affairs. Pension pots typically represent a big chunk of a family’s total wealth and there can be significant complications if, for example, one partner has foregone a career to look after children.

There are various ways to splits pension assets. You could offset rights to the pension pot against another significant asset like your primary residence; you could split the savings right down the middle; or you may decide on a payoff amount when the pension can be accessed.

It’s hard to overstate the importance of pensions being split appropriately and the law requires that they be included in divorce settlements. Both sides should certainly take professional financial and legal advice where significant sums are at stake. Without this, it is highly possible that pension assets can be overlooked or incorrectly valued.

The generally-accepted wisdom is that both sides in a HNW divorce should have a financial adviser and a lawyer advising when it comes to splitting pension assets, and perhaps offsetting them against the marital home and career breaks for child-rearing and so on. Coming to an agreement is likely to take a fair amount of compromise, but it is in the interests of both sides to avoid protracted legal battles. There have been several cases where the legal bills of warring high net worth couples have eventually exceeded the value of the assets they were quarrelling over.

Managing settlements wisely

Once the process of coming to a settlement has concluded, one party may find themselves with a significant amount of liquid wealth. It is then crucial that they take proper financial advice so that that money is working as hard as possible within appropriate risk parameters.

A financial adviser will be able to discuss with you likely projections for how long the money will last at the level of income you need. Then will then devise an investment (and financial planning) strategy which will help you reach your financial goals.

Overseas couples

Subtle differences in law between various jurisdictions mean that it might be in one party’s interests to have divorce proceedings take place in one place over another. This has led to a phenomenon known as “jurisdiction shopping”, where partners race to start proceedings in the jurisdiction of their choice. The UK is seen by many as being favourable towards financially weaker partners and this has led to many high-profile test cases concerning high and ultra high net worth individuals playing out in London’s courts. Professional legal and financial advisers are well-versed in these kinds of subtleties.


These are just a few of the factors wealthy individuals need to consider in relation to their marital status and how it might change over time. As with all things financial, forward planning is paramount. Be sure to discuss any and all changes in your financial circumstances with your financial adviser – they may prevent you from making some very expensive mistakes.

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