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Husband fails to get £2m lump sum from wife in divorce settlement

Husband fails to get £2m lump sum from wife in divorce settlement

A husband has failed in his attempt to get a £2m lump sum from his wife as part of their divorce settlement. The court held that there was nothing to justify such a payment.

The husband and wife had married in 2007. They divorced in 2016 and had a six-year-old son. They had lived in a rented flat in London during their marriage, and both had successful careers. The husband had a net income of £130,000 per year.

In 2015 the wife, as settlor, had set up two identical discretionary trusts on her father's advice. Her letters of wishes stated that the trustees were to act only on the advice of her father. In 2016 her father paid £2,718,885 into her bank account to fund the purchase of a property that she and her son could live in as she was going through a divorce.

The father also paid a further $23m into the two trusts. The wife repaid the bulk of the £2.7m to her father and was in a position of net debt.

The husband applied for a £2m lump sum as his share of the trusts but the court ruled against him.

It held that his claim floundered on the fact that he had not demonstrated a need for a substantial capital sum, and the non-matrimonial wealth, namely the trust funds, was not available to the wife.

The trusts were for the benefit of family members of the settlor. It was clear that "family members" extended to the wife's son and a spouse; they did not include a former spouse.

The wife’s father had made it abundantly clear when giving evidence that there had never been any distribution of the trusts' funds, nor would there ever be in his lifetime.

It was not reasonable for the husband to seek to get the trustees to pay a lump sum for his benefit when neither the wife nor his son had received anything from the trust. To treat the wife as having £20m available from the trusts was fanciful.

As for the husband’s needs, he required a reasonable home which related to his marital standard of living that was suitable for his son and comparable to his wife's accommodation. It did not follow that he needed to be able to buy his own home; he had lived in rented accommodation throughout the marriage.

He had a significant net income; he paid £15,000 per year towards the maintenance of his son, plus extra when the son stayed with him, and £30,000 per year on rent. He had enough to purchase a flat.

If you would like more information or advice about the issues raised in this article, or any aspect of family law please contact our expert legal team on 0208 004 0065, by email at hello@southgate.co.uk or using the form below.

Case Citations: DAGA (2018) Fam Div (Holman J)

The contents of this article is general information only. The information in this article is not legal or professional advice. The law may have changed since this article was published. Readers should not act on the basis of the information included and should obtain independent expert advice from qualified solicitors such as those within our firm.

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