Charman –v- Charman – good news or bad news?
The divorce case of multi-millionaire John Charman, one of the richest men in the City, has attracted much media interest and with good reason. John and Beverley Charman had a 27 year marriage and about £131 million worth of assets, of which £68 million were invested in an offshore trust in Bermuda. Their divorce is the biggest English divorce settlement ever awarded following contested Court proceedings which resulted in Mrs Charman walking away with £48 million or 36% of the total assets, including those invested in the offshore trust.
The Charman divorce confirms the position in cases where considerable sums of money are involved. It is unlikely that even after a long marriage a wife will successfully claim 50% of the assets. It is fair to assume that Sir Paul McCartney will take some comfort from this judgement, particularly as his marriage to Heather is short by comparison.
As in the recently reported case of S -v- S in April, Charman does also confirm the likelihood of the divorce courts imposing a clean break on divorcing couples where there are sufficient assets to do so. This then leaves the high earner (typically the husband) to keep his future high earnings.
So what is the bad news? There is concern in legal circles about the treatment of the trust assets in Charman. Will the way in which trusts operate and are administered come under even closer scrutiny by divorce judges? Will there now be a higher threshold to overcome to persuade a divorce court to treat assets in trust differently than other assets?
Two things do seem more certain. Although not binding on the divorce courts in England and Wales, prenuptial agreements are proving increasingly popular for the wealthy future spouse. He (or she) should also try to keep divorce proceedings away from England and Wales.
For more information contact Katharine Shaw on 01722 427541 or by email: kms@wilsonslaw.com