Henry Brookman provides the answer to a Financial Times’ `Wealth Question’ regarding the circumstances which may or may not cause a divorce deal to be reconsidered by the court.
Financial settlements agreed during divorce often take into account assets such as property or business interests, as well as debts. But what happens if the financial settlement turns out to favour one party more than the other after, for instance, a property increases in value, or the debts were less significant than originally assessed? Can either party request to have the settlement reconsidered?
For the most part, once a divorce is finalised and the financial terms are wrapped up in a court order, it is unlikely that either party could reopen their claim. The valuer can only fix a settlement value at a point in time and they must use their skill and judgment to put a figure on what could be a not entirely known quantity.
For example, the value of property or land is typically decided during the divorce, however, those assets could significantly change in value in the months and years after divorce. In one case, a husband took on the responsibility for paying a large tax bill which was therefore taken into consideration when the assets were divided. However, due to unforeseen circumstances after the divorce, the tax liability turned out to be a much lower figure. In all these cases, the court has held that the parties made their financial agreement and should stick to them.
There is, however, precedent for a court to reopen a case if something completely outside the scope of the settlement arises. This comes from the tragic case where, one week after a settlement gave substantial assets to the wife, she killed herself. In this case, the terms of the order were set aside and the estate did not pass to the deceased wife’s relatives.
If you would like to know more about this issue please contact Brookman Solicitors for more information.