A recent Supreme Court ruling in favour of the estranged wife of a Nigerian oil tycoon, means that business people can’t hide assets in corporate structures to protect themselves in the event of divorce.
The high profile case involved the £17.5m divorce of businessman Michael Prest. He argued that properties held by his companies were not owned personally by him, so couldn’t be transferred to his wife on their divorce.
In a complex case, the original decision to transfer the properties was overturned on Appeal, but the Supreme Court ruling in Yasmin Prest’s favour, confirmed that the properties were ‘held on trust’ for Mr Prest by his companies.
In corporate law there is a principle that a company is independent from its shareholders. But in this case the court ruled that where a company is owned by one spouse with no third party interests, and assets have been bought with the individuals own money, the court is able to exercise legal discretion and make orders relating to those assets.
As a family lawyer I see this landmark case as a victory for fairness. It sets a precedent that wealthy divorcing couples should be aware of. Any wealthy divorcing couples with business assets must be aware that courts will examine their specific circumstances carefully when making a decision, particularly where there is any suspicion that one party may be trying to hide assets.
I would certainly recommend seeking specialist legal advice at an early stage where there are any complex business and financial issues involved in a divorce.