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St Basils Russia divorce cases in England

The High Court in London is poised to hear the biggest ever divorce case when Natalia Potanina make a bid to claim a share of her Russian oligarch ex-husband’s fortune. Having lost a legal battle in the Moscow courts, she has launched a bid for an estimated £5.8bn, just over one third of her ex-husband’s £15bn wealth.

Ms Potanina claims that she was by her husband’s side as he built his fortune during their 31 years of marriage. The couple split amid accusations by Ms Potanina that her husband had an affair with an employee who was 15 years his junior. Since his divorce, Vladimir Potanin has remarried and now has two children with his current wife, Ekaterina.

Leading lady divorce lawyer on the case

Vladimir Potanin had instructed eminent divorce lawyer Baroness Shackleton to represent him. This will give Shackleton a busy case load, alongside her current representation of Princess Haya bint Hussein in her court battle with husband Sheikh Mohammed bin Rashid al-Maktoum, ruler of Dubai. (Needless to say, we very much agree with eminent lady divorce lawyers taking on high profile and complex divorce cases!)

 

Expensive parking…

In another case, millionaire Russian exile Boris Shemyakin lost a divorce case brought in the London courts with his estranged wife Elena Vasilyeva. This clears the way for her to make a claim against her husband in the English courts.

Mr Shemyakin, granted asylum in Britain eight years ago, has objected on the grounds that he and is wife reached a “final agreement” in Russia. A Russian court order awarded Ms Vasilyeva:

  • a £1m flat in Moscow
  • shareholdings worth £430,000
  • a parking space worth £38,000!

However, High Court judge Mr Justice Williams ruled that Ms Vasilyeva could claim for “financial relief” in England as despite the agreement it would be unjust to “close the door” on her claim. The couple disagree on how much Mr Shemyakin is worth, with his ex wife saying £115m and he saying between £3m and £4m.

 

Spend, spend, spend

Both cases are in stark contrast to much more amicable divorce of billionaire Jeff Bezos and MacKenzie Bezos. The Amazon founder will pay his wife a divorce settlement of $38bn (£29bn) in Amazon shares. This will make MacKenzie Bezos the fourth richest woman in the world, although she has already pledged to give away “at least” half of her wealth “until the safe is empty”. Even after the divorce payout, ex-husband Jeff will still be the richest person on the planet, worth a cool $118bn.

 

You owe me

However, a court order doesn’t always result in monies being paid. This time last year, Russian billionaire Farkhad Akhmedov was in contempt of court from refusing to pay his ex wife Tatiana £453m. Mr Akhmedov had been ordered to pay his ex-wife a 41% share of his £1bn fortune back in December 2016. Judge Mr Justice Haddon-Cave said that Mr Akhmedov has concealed assets and taken "numerous elaborate steps" to "conceal his wealth" and "evade enforcement of the judgment".

 

Expert divorce advice for high worth clients

At LGFL, we understand the complexities and intricacies of high worth divorce, and the hard work and sacrifices often made on both sides to amass a multi-million pound fortune. Call us for an appointment to discuss your situation at our highly discreet countryside offices just outside Reading, or to book a Skype or telephone call with one of our Directors.

Hand holding £50 notes for spousal maintenance

Should spousal maintenance be a 'meal-ticket for life', or a payment just to cover current requirements? At present, the law allows payment of spousal maintenance until the death of the payee. What’s more, a case in 2017 (Mills V Mills) saw a judge increase monthly maintenance payments to his former wife who he divorced over 15 years ago.

Baroness Hale, President of the UK Supreme Court, has said that:

“Research has clearly shown that a person who gives up work, even for a

few years, in order to concentrate on child care or other family responsibilities will never make up what they have lost. It is a dilemma for us all, but particularly for those in the professions who would dearly love to ‘have it all’.”

So, can any spouse really “have it all”? Director Rita Gupta delves a little deeper into this contentious subject.

Having it all v. having what’s realistic

We’ve all seen the headlines where a celebrity wife (and it is usually the wife) demands hundred of thousands per year to maintain the lifestyle they and their children are accustomed to. To many, these can seem excessive, but being wealthy is an expensive business.

At any level of income or wealth, the everyday realities are more pragmatic. There are mortgage repayments and maintenance costs for the family home to be paid, utility bills, food, activities and clothing for children, school fees, car insurance, family holidays, council tax, the list goes on. Then there is the need to provide children with the chance to experience new things and expand horizons through outings, adventures and sports, none of which come cheap.

 

The rising cost of living

What’s more, these costs are not fixed from the point of divorce onwards; mortgage rates can rise, and utility bills alone have risen by over 3% in the last year alone. Utility bills alone currently account for 5% of the average UK household income, according to MAS.

With an international perspective, the fall in the value of the pound abroad affects the price of European and other holidays. So it’s important that spousal maintenance is based on an accurate figure of ongoing needs, not just covering current costs.

That’s why at LGFL, we work for an accurate settlement that is rooted in the real world of rising costs, economic fluctuations and personal circumstances, which can of course change on both sides.

 

Flexible and realistic spousal maintenance

When you and your spouse divorce, you both can agree that maintenance payments will be automatically increased or decreased automatically year on year. Payments usually change in line with the retail or consumer prices index, to account for changes in the UK economy.

You can also agree a specified term for maintenance to be paid, such as until your youngest child has finished secondary school, or until one of you dies, or remarries. This is known as a Joint Lives order. You can also agree a fixed amount to be paid per month, or a percentage of the payee spouse’s income.
 

Can spousal maintenance agreements be changed?

You can agree between yourselves, initially through mediation, to vary payments, and then apply for a court order to make that agreement binding. If you can’t agree, one ex-spouse can apply to the court to change the amounts payable.

Courts have a range of powers to change orders or even terminate them. However, judges can differ in their approach to the concept of alterations to spousal maintenance claims.

In 2015, Lord Justice Pitchford ruled that the wife of a wealthy racehorse surgeon should go out to work, and not believe that she should be “supported for life”.

“Mrs Wright has made no effort whatsoever to seek work or to update her skills...I am satisfied that she has worked on the basis...that she would be supported for life. It is essential... that she starts to work now.”

In the speech cited above, Baroness Hale took a more considered approach:

“My own view is that the goal of divorce settlements should be… to give each party an equal start on the road to independent living. But that equal start is bound to involve, for most couples, an element of compensation for the disadvantage, often the permanent disadvantage, resulting from the choices made by both parties during the marriage. Sometimes, but not always, the only way to do this is by open-ended periodical payments. To refer to this as a ‘meal ticket for life’ is indeed patronising and demeaning, but making an award for those reasons is not.”

 

A transition to independence

The Law Commission has stated that:

“The objective of financial orders made to meet needs should be to enable a transition to independence, to the extent that that is possible in light of the choices made within the marriage, the length of the marriage, the marital standard of living, the parties’ expectation of a home, and the continued shared responsibilities (importantly, child care).”

However, for many divorcees, financial independence isn’t all it’s cracked up to be. The introduction of Universal Credit has caused particular problems for newly-single parents looking to return to work. A recent article on the MSN Money site highlighted the case of a working mum who has a good job, a 10-year-old daughter - and has had to resort to pay day loans after being switched from Working Tax Credits to Universal Credit.

 

Universal Credit and cash flow

The nub of the problem is cash flow, or more precisely, late payments. According to the article, under Working Tax Credits, monies were paid in advance, allowing parents to budget for childcare and monies to go almost direct from government to child care provider. However, under Universal Credit, payments by the parent/s must be made upfront, and claimed back one month later when proof of payment has been sent in.

This is one reason why this year’s summer holidays are particularly difficult for those reliant on Universal Credit. Childcare costs rise or suddenly appear for children normally at school during the parent’s working hours. Away-from-home holidays, treats, entertainment all need paying for, as does the perennial issue of new school uniforms for ever-growing children.

As the article’s author says:

“It is not easy to say that you are living in poverty; no one wants to stand up and admit that. We want to be proud, not seen to be struggling. It feels so insecure. … We are not asking for extra money, we’d just like the money we’re entitled to, to be accessible when – not after – we need it, at the point we need to pay, to stop the cycle of borrowing and, consequently, debt.”

 

Creating realistic spousal maintenance awards

At LGFL we help clients to delve deep into their finances to work out exactly how much they need for themselves and any dependent children to thrive, not just survive. We encourage both sides to provide full financial disclosure so that misunderstandings and misconceptions about the precise net worth of each party.

Also, whilst we always fight our client’s corner for maximum benefits, we also encourage realism about how much the payee can actually afford. There is little point in demanding large sums if the payee simply cannot afford them, resulting in resentment and hardship all round.

It’s also important to get it right first time as much as possible. A fully contested spousal maintenance application can cost a considerable sum, and the costs may actually outweigh any financial benefits gained for years.

 

LGFL: pragmatic advice, real world results

At LGFL, we offer a free 30-minute consultation for anyone considering a divorce, where you can talk through your situation and receive sound, legal advice. One of the reasons we offer this is to meet you, and for you to meet us. You need to see for yourself that we will always fight your corner and work tirelessly for the best outcome for you and your families. In turn, we need to know that you will work with us for the same outcome.

If you would like to meet and talk about your divorce financial settlement needs, or concerns over your current levels of spousal maintenance, call us.

 

It is crucial to get a grasp on your finances before any divorce proceedings start. This applies equally if you have a financial team working on your behalf, or whether it’s just you and your accountant.

If you want to reach a fair and reasonable financial settlement as part of your divorce, you’ll need to disclose your own assets, and in turn receive in turn full disclosure from your soon-to-be-ex-spouse.

In the second of her articles, Director Anne Leiper explains how full and open financial disclosure is important for any divorcing couple, regardless of their net worth.

 

How to account for your finances in 30 minutes

If you don’t know where to start with disclosing your finances, the Money Advice Service (MAS) have produced a handy downloadable spreadsheet that guides you through the process of accounting for all your financial assets.

Whilst the 30-minutes completion timeframe is wildly optimistic, it does lay out a sound action plan that anyone divorcing, billionaire or otherwise, should follow:

  • Draw up a budget and control current spending (divorces do cost money even when amicable)
  • Plan for costs, legal fees and “the likely expense of running two households” or more
  • Calculate your worth in terms of Property, Assets and Debts
  • Work out support arrangement costs, including child maintenance, private school fees, etc.

Saving up for your divorce

Whatever your income, it's always advisable to out money aside for your divorce. Use the MAS Quick Cash Finder to find out how much you spend on regular items such as lunches, coffees, gym membership, clothes, etc. It is astounding how these seemingly small items do add up, and savings here can also be considerable. This is particularly useful at a time when maintaining a sufficient cash flow will become important.

We doubt Jeff Bezos would bother counting his coffees, but the principle is sound for most of the rest of us!

 

Plan for legal fees

Any divorce in England and Wales incurs reduced fees from the court, which are set by the government. In addition, you should budget for your legal team’s fees, which will vary according to the complexity of your finances, family situation, financial setup and level of current contact with your spouse. (See below on how our transparent billing could save you money.)

 

Calculating your net worth - property

The value of a property will depend on market forces, but in terms of your divorce, it’ll also depend on:

  • The amount of any remaining mortgage
  • What’s left to pay off, by when and by whom
  • Any early repayment costs or fees
  • Subsequent selling costs

Again, the MAS spreadsheet will guide you through the process of calculating this. Calculating your debt is also very important, not just for an accurate figure of worth but to ensure you can continue with repayments after you separate.

 

Child maintenance costs

If you have dependent children, you will need to calculate how much child maintenance might be due by the non-resident parent. Needless to say if you’ve never had to pay this before, you’ll need to know what is the ‘going rate’ before entering into negotiations. The Child Maintenance Options website has a handy calculator that will give you a ballpark figure that we can take forward into negotiations.

 

Paying for pets

Remember, any pets are classed as chattels, which is a term to describe any item of property apart from land. So you’ll need to factor in who gets the pets, including valuable animals such as stud horses, livestock, racehorses and polo ponies, and the ongoing cost of keeping them. For more details, see our article: “Who gets the dog?”

 

The true cost of good advice = priceless?

Please don’t be tempted by online, ‘quicky’ or ‘cheap’ divorces. As experienced divorce lawyers, we have seen people give away so much they were entitled to simply by filling in their forms incorrectly or not taking time for proper legal advice. It saddens us that even just 30 minutes invested in talking to us and gaining invaluable insights could have ensured a totally different outcome.

As a new client, you may be entitled to our free, no obligation 30-minute consultation to discuss your divorce. You can also extend the consultation by prior arrangement to an hour or more if you wish. Call us, email us or fill in our reservation form online.

 

Why pay for professional legal advice

In any divorce, taking advice from an experienced family law firm such as LGFL will, literally, pay dividends. We know exactly how to ensure you get a full and fair settlement, and how to ensure your ex has made a full and frank disclosure of their assets. We can also help you protect your assets and your future from inflated claims made by your ex-spouse. Let’s be honest, the more you are worth, the more you stand to lose…

 

Transparent fees for your divorce

At LGFL, we are committed to transparent pricing for all legal action, including divorce. You are always fully informed of costs, with no hidden fees, and no unexpected charges. Our costs are usually based on the amount of time we spend working on your behalf, based on our standard hourly rates.

We fully itemise all work we do on your behalf, including complete details of what has been done. You can ring and ask for your outstanding bill figure and costs of any work in progress, at any time.

 

Expert financial settlement advice from LGFL

For more details on our bespoke, pragmatic and transparent approach to divorce:

High net worth for divorce

At the beginning of this month, Jeff Bezos, founder of Amazon, finalised his divorce settlement to ex-wife MacKenzie. According to the law in Washington USA, assets acquired during marriage are to be divided equally. Bezos has a reported net worth of more than $157 billion, so his ex stands to gain a lot. An awful lot.

However, as a US lawyer pointed out:

“The major thing for billionaires is that most of the time, their assets are very complex and mostly illiquid — with Bezos, a lot of his assets are linked to Amazon stock.”

In the first of two articles for high worth couples on the brink of separating, Director Anne Leiper looks at the implications of financial disclosure for divorce. She also explains how her expert advice and determination for full disclosure can save you considerable time, money and stress.

Your business is his business?

The settlement agreed between Jeff and MacKenzie Bezos highlights one of the issues I deal with on a regular basis - joint financial involvement in a family business or group of companies. This ranges from a couple both being on the Board, to joint shares ownership, and companies/properties registered in a single spouse’s name.

That makes high worth divorce settlements much more complicated. Indeed, the same applies for divorce settlements for any marriage or civil partnership where your finances are intertwined with your business interests.

Both spouses must ensure they fully disclose all their assets at the start of any divorce process, in order to reach a robust, reliable and reasonable settlement. If new assets are disclosed (or uncovered) at later stages, things can get very awkward indeed.

 

Divorce and your company’s value

The divorce of high profile figures within a company can also have a detrimental effect of the company’s worth too. Bezos retained 75% of his shares in Amazon (59.1 million shares), still making him the wealthiest man in the world, whilst his wife retains 25%. Crucially, MacKenzie relinquished all her voting rights to her ex, so he still has control over the company. Perhaps it’s this openness that has seen Amazon’s shares rise 20% this year, rather than dip as some expected.

 

Defining your assets prior to divorce

So, what is the process of sorting and defining your financial assets? If you have a pre-nuptial agreement that lays out the basics, this is a very good place to start. It enables both parties to say “I came to this marriage with £xm”.

In a pre-nuptial agreement, there is usually agreement reached over how these and subsequent assets are to be allocated in the event of a couple separating. (If you’re not married, a cohabitation agreement can achieve the same.) Whilst a pre-nup is not currently legally binding in the UK courts, it is a significant factor the court will take into account.

 

What’s included in full financial disclosure

Financial settlements rely on complete and full disclosure by both parties of all monies and assets, including:

  • Cash in current accounts
  • Property, whether owned individually or jointly
  • Businesses owned
  • Savings
  • Investments
  • Pensions -workplace, state and private
  • Company shares
  • Personal assets such as jewellery, art, cars, etc

If you consider that your partner has not disclosed all their assets, whether intentionally or not, we will investigate further. If disclosure is not forthcoming, we can go to court to obtain orders to force disclosure. The court has the power to order your ex to fully disclose their assets. If you later discover assets that were not revealed at the time of the Consent Order, it can be expensive and difficult to go back to the court later and ask for more money.

Remember, disclosure works both ways. You may consider that you already know what your spouse owns (or not), or consider that parts of your financial affairs are simply none of their concern. As above, non or partial disclosure could result in legal action from your spouse.

 

Getting your financial agreement sorted

The good news is you can agree a financial divorce settlement without going to court. AT LGFL, this is the route we always advise. You can use mediation to come to an amicable and mutually agreeable solution that is tailor-made for you, your family and your situation.

With our help as experienced family lawyers, a legally binding agreement known as a Consent Order can be drawn up that works for both of you. This method keeps your divorce financial details out of the public domain (and hopefully, the press too). You can also include non-disclosure clauses.

If you can’t agree, then the process will have at least provided considerable information for any subsequent court hearing and ruling. It is a condition that you will have at least met together to consider mediation before you go to court (unless you are separating from an abusive partner).

At LGFL, we relish high worth divorce cases, applying our considerable expertise and experience to sort through any complex maze of financial arrangements and structures. Call us to discuss your situation in complete confidence either in person or via Skype if you are living or working abroad.