At Emmersons Solicitors we have a team of family lawyers dealing with Financial Settlements when our clients divorce or separate.
A simpler case may involve the matrimonial home, some pensions and maybe some savings. This type of case is quite typical of those that we handle. They are, from my perspective, quite straightforward. I can see the pattern of assets, the overview that a judge will probably take and the likely financial outcome. The difference between our clients and us is that we consider hard-headed figures, whereas our clients are trying to deal with huge life changes. That is why they instruct us, to handle everything whilst they try to come to terms with their new life.
We take a great deal of pleasure in being able to guide our clients through a stressful period and out the other side. I often advise clients to imagine their lives three years ahead, when dealing with us is just a distant memory. I see our role as being to obtain the best deal for a client that will help them not just now but in the years ahead. When a client says, I just want to take any deal, I just want an easy life, my job is to guide them to a better outcome.
Consider “Lisa”. Her husband had received a lump sum because of an accident that he had. This didn’t affect his ability to work and he was doing quite nicely financially. Though of course, his accounts would say otherwise, but that’s another story. He spent most of this money and gave Lisa no maintenance for the children. Unusually this matter proceeded to court as Lisa’s husband would not negotiate. He was of the view that the Matrimonial Home should be sold and that he should receive half of the money. This was never going to happen as far as any judge was concerned.
On the day of the court hearing, the husband put forward the same offer. If Lisa accepted the offer there and then it would save her having to give evidence, but it would also leave her and the children homeless and penniless.
We suggested that Lisa should receive all of the remaining personal injury settlement and the house signed over to her with her husband having no further interest in the same. It was clear that the husband had squandered a lot of money, he had not paid a penny towards the mortgage or the children since the couple separated and there was little chance of him ever doing so. As far as we were concerned Lisa had nothing left to lose by walking through the door of the court.
We were right! The judge agreed with the arguments we had proffered. Lisa was able to remain in her home with the children, and the lump sum she received helped her to maintain that property whilst the children were young. As you would imagine, Lisa was nervous at court; the financial carrot was being dangled. But the long term position looked different to us; it’s about being able to keep your eye on the long term gain. The Business Owner’s Divorce
As I have progressed in my career, I have dealt with more complicated cases. Many of my clients own their own businesses. I like dealing with this type of work. As a business owner, I understand the need for cash in a business, what is really going on behind the profit and loss accounts, what to look for in business and personal bank statements and the different ways in which a business can be valued.
In the case of “Fred” and “Tina,” Fred had his own business. Tina did not work, and she sought a large proportion of the value of the house, a large maintenance payment for life and a lump sum equivalent to half of the value of Fred’s business. She was determined that the value of Fred’s business would be about £400,000.
Having looked at the accounts and turnover of Fred’s business, I could see that he would have very little by way of goodwill in his business. It was the classic case where the business is reliant upon Fred to keep it going, he was the main income generator. So without him at the helm, there would not really be a business to sell. I thought the business would be worth at most £40,000. We arranged for a specialist accountant to value the business, it was actually valued at about £25,000. This was a joint instruction from both Fred and his wife, via solicitors, and the judge accepted it.
It can be very complicated to unpick the workings of a business. Is one partner going to leave the business, if so how are they to be compensated? Can the business afford to compensate them? The business is the golden goose that provides the income, often for the whole family. If you strangle it then that income is lost. Again, it’s about the long term view, how can two separate parties be provided for in the long term.
A well-run business, with strong branding, strong service culture and repeat clients can be worth a lot of money. If it doesn’t rely solely on one person to keep it going, then it is worth even more. Is your pending divorce the time to sell up and reap the rewards?
