Divorcing couples should avoid divorce finance dramas by promptly reaching final agreements backed up by a court order when they separate, according to an expert at Thursfields Solicitors.
The advice from the leading Midlands law firm comes following media coverage of the divorce of Bev Sharp and Adam Woodyatt, who plays Ian Beale in TV’s Eastenders.
Mr. Woodyatt is to be a contestant in the next series of reality TV show ‘I’m a Celebrity’, which could earn him a reputed six-figure sum.
But Mr Woodyatt’s estranged wife may argue for a proportion of this fee because while they have been separated for more than two years the divorce and financial agreements have not been finalised.
Lorna Tipple, a director in the Family Law department at Thursfields, said: “This high-profile situation reflects a crucial issue for anyone involved in a divorce about how post-separation earnings are treated.
“This could all have been avoided had the couple promptly dealt with financial matters arising from their divorce when they separated in 2019.
“Had a final agreement been reached and embodied into a court order at that stage, there would have been finality and no question could then have arisen as to any sharing of future earnings.”
Lorna explained that where a financial settlement has yet to be agreed, case law outlines three categories in the court’s approach to post-separation earnings accrual.
They are: new ventures; passive economic growth of the matrimonial asset (such as savings, property or pensions); and active economic growth of a matrimonial asset (such as an actively managed investment portfolio).
Lorna said: “Passive growth, case law states, should not be viewed as non-matrimonial property and should therefore be shared equally. Active growth, however, is likely to be a different story.
“Mr. Woodyatt’s signing on fee for ‘I’m a Celebrity’ may well be treated as a new venture acquired by him ‘by virtue of his own industry’, which means it would be unlikely to be considered a matrimonial asset.”
Lorna went on to cite a case from 2018 where significant earnings post-separation were excluded from the matrimonial pot.
However, she pointed out in that case both parties’ needs could be met fully from the matrimonial pot, making it easier to exclude post-separation monies.
“Needs are always key,” Ms. Tipple continued, “and can trump any other argument in a financial case.
“If Mr. Woodyatt’s estranged wife is unable to meet her needs from the matrimonial pot, she may successfully be able to argue that some of his post-separation wealth is required to meet those needs.
“This underlines how crucial it is that once a marriage has broken down and there are no prospects of reconciliation, it is advisable to proceed with the divorce and negotiation and finalisation of financial matters without delay.”
She added: “A relationship breakdown is stressful enough without the added uncertainty and drama that further issues such as these can bring, particularly where they could have been avoided.”