Managing equestrian assets on divorce…
Family law affects different individuals and families in a myriad of different ways –circumstances, objectives and agendas come together to make each case unique and specific to the individuals involved. For those who live, work or play in the equestrian world and who need family law advice, there is however, one common key question – what will happen to the horses?
Any asset owned by a party or in which a party has an interest is likely to be considered a marital asset to be taken into account upon divorce. Whilst the non-equestrian spouse may well consider horses to be a liability and the equestrian spouse may consider the horse to be the most important member of the family, the reality is that any horse with a value or potential value of over £500 is likely to be deemed an asset and will form part of the matrimonial pot. Likewise – horse boxes, trailers, yards and land are also assets – the value of which can be considerable, so it is not surprising they may be taken in to account in the context of all the marital assets and they will need to be valued accordingly.
It is not just the value of the horse that needs to be considered – horses are often considered an expensive luxury because the cost of their upkeep can be a heavy financial burden. Often equestrians facing divorce have to deal lengthy, costly and upsetting arguments as to the affordability of maintaining the horse and whether or not it forms a “reasonable need” after divorce.
As with any family law dispute – the best way through is for spouses to come to agreement. One way to potentially avoid arguments is through carefully drafted pre and post nuptial agreements which seek to ring fence horses from the assets to be distributed on divorce. In the absence of any agreement, the reality is the horse may be sold and the proceeds of sale added to the pot unless there is either sufficient funds to allow an equestrian spouse to continue to keep the horse or their retaining the horse in some way generates income.
In cases where the keeping of horses generates an income the approach would be the same as with a business – it needs to be valued and parties should jointly appoint an expert to produce a report. There are various ways that a business can be taken into account as part of an overall settlement but it is worth noting that generally the court would avoid making an order which ruins the business, its potential or undermines its ability to provide an income. The best approach parties can take is a pragmatic and realistic one which takes into account a long term view – particularly if many of the assets are non-liquid, as they often are in equestrian businesses.
It is wise to instruct a solicitor with experience of dealing with cases that involve businesses and horses early on – doing so will help you save time and money and will help you avoid entering into costly and unrealistic arguments about how to deal with matters going forwards.
Likewise – if you are dealing with other family law scenarios – as with couples intending to marry (pre-nuptial agreements) and cohabitees which are beyond the scope of this article. Do not hesitate to contact Lucy Mackintosh at Thursfields Solicitors for more information on 01905 677057 or LMackintosh@thursfields.co.uk