Asset Management Protection

LAYTONS LLP

Wealth & Asset Protection Sensible financial planning for you and your family

LAYTONS LLP We understand that dealing with your family affairs requires more than just sound advice and technical excellence. We invest the time to get to know our clients’ circumstances, needs and preferences to deliver commercially informed and practical results for you.

We advise on all aspects of relationship breakdown and asset protection/ preservation issues, including: • • • • • • • • •

Pre and post nuptial agreements Advice for cohabitants, including cohabitation agreements Divorce or separation and the associated financial issues International family law Financial provision for children Wills and Estate planning Trusts Powers of Attorney Property ownership

Wealth & Asset Protection Sensible financial planning for you and your family

Wealth & Asset Protection | Sensible Financial Planning

Pre & Post Nuptial Agreements Securing your future for your own peace of mind Getting married is one of the biggest commitments that you can make in life. Weddings take months to prepare (frequently at a significant cost) but often we forget to consider the financial consequences that come with being married. It is important to be aware of your rights and responsibilities. In the unfortunate event of a marital breakdown, the court in England & Wales adopts a discretionary approach to dividing marital assets based largely upon the principles of needs, fairness and sharing. In general terms, it is known to be a fairly generous system with the starting point that all marital assets will usually be divided equally between the parties (subject to various exceptions).

At the outset, all assets of either party form part of the so-called ‘matrimonial pot’ available for division between the parties in order to meet needs (and satisfy the principles of fairness and sharing). This means that even assets acquired premarriage (sometimes before the parties even met) and as a result of gifts or inheritance will nonetheless form part of the initial ‘matrimonial pot’ and will therefore be subject to the court’s discretion.

laytons.com

As it currently stands, the only way to protect those assets and to pre-determine a financial settlement in the unfortunate event of marital breakdown is to enter into a pre or post nuptial agreement (prenuptial agreements are entered prior to the marriage, post-nuptial agreements after the marriage has taken place but the effects are the same).

Wealth & Asset Protection | Sensible Financial Planning

In the event that you are considering marriage (or have already married) and you have;

It would be prudent to speak to one of our specialist family lawyers to find out about how you can protect that wealth in the form of a pre/post nuptial agreement. Whilst it may seem like an unromantic proposition, setting out your intentions from the outset can save considerable time, expense and emotional strain in the long term.

•

Assets of your own which were acquired prior to the marriage (e.g. property, investments, trusts, pensions, cash)

•

Previously been married and/or have children from a previous marriage or relationship

•

Business assets or interests that you wish to protect

•

An interest in a family trust

•

Received gifts from third parties or are likely to receive gifts from third parties during the course of the marriage (such as friends or relatives – including property deposits)

Navdip Dhariwal

Received inheritance from third parties or are expecting to receive inheritance from third parties (such as friends or relatives) during the course of the marriage

Associate Partner victoria.goodhall@laytons.com +44 (0)20 7842 8050

•

Key contacts Associate Partner navdip.dhariwal@laytons.com +44 (0)20 7842 8046

Victoria Goodhall

laytons.com

Wealth & Asset Protection | Sensible Financial Planning

Cohabitation Agreements The myth of the “common law spouse” There are more people living with partners (or friends/ relatives) in the UK than ever before. It is the fastest growing family type in this country and this trend is set to continue.

Despite this however, there is very little public awareness of the rights of cohabitees (or perhaps more importantly, the lack of rights for cohabitees).

It is fairly widely publicised that the court system in England & Wales adopts a discretionary approach to dividing finances in the event of marital breakdown with the starting point being an equal division of assets acquired during the course of the marriage (regardless of who purchased them). By stark contrast, the court has very limited powers in respect of cohabitants in the event of relationship breakdown and the governing law is based on the principles of equity and trusts (as opposed to family law legislation).

laytons.com

There is also a widespread misconception that long-term cohabitants will be afforded the rights of a ‘common law spouse’ entitling them to protection in the event of relationship breakdown. Unfortunately this is not the case and as a cohabitant, you could find yourself in a very vulnerable position in the event of relationship breakdown (particularly if you do not own the property in which you are living) as the court does not have any power to transfer shares in property. This is especially important where the parties also have children.

Wealth & Asset Protection | Sensible Financial Planning

As a result therefore, if you are considering purchasing or making a financial contribution to a property or living with a partner, friends or relatives, you should strongly consider obtaining legal advice from one of our specialist family lawyers.

They will be able to tell you more about cohabitation agreements which can predetermine and record in writing (in the form of a contract) your wishes in respect of property ownership, meeting household expenses and dividing personal belongings both during the course of the period of cohabitation and in the unfortunate event of future relationship breakdown. Setting out your intentions from the outset can save a great deal of time, expense and emotional strain in the long term.

Key contacts Navdip Dhariwal Associate Partner navdip.dhariwal@laytons.com +44 (0)20 7842 8046

Victoria Goodhall Associate Partner victoria.goodhall@laytons.com +44 (0)20 7842 8050

laytons.com

Wealth & Asset Protection | Sensible Financial Planning

Property Ownership Whose house is it anyway?

You may not be aware that there are two different ways in which property co-owners may hold the beneficial interest in a property (i.e. the equity in the property). There is an important and significant distinction between the two and it is important that you fully understand the differences:

•

Joint tenants Under a joint tenancy each owner has an indivisible share in the property and all owners are equally entitled to the whole property. Crucially, the right of survivorship applies which means that immediately upon the death of one of the owners, their share automatically passes to the remaining owners and will not form part of their estate for probate purposes.

laytons.com

•

Tenants in common Under a tenancy in common each owner has a distinct beneficial share in the property. It is advisable for the co-owners to indicate expressly the proportions in which they hold the property, rather than leaving this to be implied from the circumstances and the financial contributions made by each co-owner. This is particularly important if you are contributing towards a property purchase in unequal shares and we can ensure that this is recorded expressly at the time of purchase. The right of survivorship does not apply and your share of the property will pass under your will or under the intestacy rules.

Wealth & Asset Protection | Sensible Financial Planning

In today’s society, it is common place for family members to contribute towards a property purchase (e.g. parents providing a deposit). They may wish to ensure that their contribution is legally protected either in the event of a relationship breakdown or when the property is sold. We work closely with our colleagues in the Trusts, Estates & Private Client department to ensure that any third party contributions will be adequately protected, if so desired.

Key contacts Dee Aylward Partner dee.aylward@laytons.com +44 (0)20 7842 8019

Tom Cawcutt Solicitor tom.cawcutt@laytons.com +44 (0)20 7842 8082

laytons.com

Wealth & Asset Protection | Sensible Financial Planning

Wills and Estate Planning A Will is a constantly evolving document and we recommend our clients to periodically review and update their Wills, particularly when their circumstances in life change, for example when they get married, have children or get divorced. Given that a Will made prior to marriage is automatically revoked upon marriage unless it is made in contemplation of marriage to a particular named person, it is important that couples who are planning to get married consider either making or reviewing their Will to prevent any unintended consequences.

This is of particular importance in circumstances where one or both parties to the marriage own assets jointly with individuals outside the marriage or if they wish to leave assets to someone other than their intended spouse.

Making a Will enables individuals to choose who will administer their estate when they die and critically, who their assets pass to. If someone dies without a Will, the intestacy rules will apply to their estate and this could well mean that their assets do not pass to those who they would have wanted them to pass to.

laytons.com

Estate planning and making Wills are the mainstay of our work. Having acted for many years for a range of individuals, including those who own and lead all manner of businesses, we have seen a good deal and found many innovative ways to address the estate planning needs of our clients.

Our expertise, combined with an ability to think laterally and come up with creative solutions, enables us to craft bespoke estate-planning solutions designed to meet a range of objectives, including minimising inheritance tax, protecting family wealth and

Wealth & Asset Protection | Sensible Financial Planning

ensuring individuals’ assets pass to the right person.

Key contacts Alexandra Bartrope

We work closely with our colleagues in the Corporate & Commercial and Family teams where appropriate to ensure that solutions fit from every angle. We will also work with professionals (such as accountants, financial advisers and investment managers) with whom clients have an existing relationship, or can introduce professionals we know and trust where necessary.

Partner alexandra.bartrope@laytons.com +44 (0)20 7842 8051

Simrun Garcha Solicitor simrun.garcha@laytons.com +44 (0)20 7842 8090

Tim Harrison Associate Partner tim.harrison@laytons.com +44 (0)20 7842 8039

laytons.com

Wealth & Asset Protection | Sensible Financial Planning

Trusts We are able to advise our clients on the benefits of setting up trusts as a method of wealth protection, including the benefits and tax consequences of setting up discretionary trusts which can be a flexible way of protecting wealth through generations.

We have a wealth of experience in advising clients on setting up trusts and our expertise enables us to find the most appropriate structure for a client taking into account their aims and objectives. There may be circumstances in which a traditional trust structure may not be appropriate for a particular individual and we are also able to advise on setting up alternative structures such as family LLPs where appropriate.

We are also able to advise and put in place Declarations of Trust for use in circumstances where parties are purchasing a property together, recording each party’s interest in the property and protecting financial contributions made by third parties, such as a parent.

We work closely with our colleagues in the family department in order to ensure that any trust assets can be protected in the event of a future relationship breakdown, if so desired.

Key contacts Alexandra Bartrope Partner alexandra.bartrope@laytons.com +44 (0)20 7842 8051

Simrun Garcha Solicitor simrun.garcha@laytons.com +44 (0)20 7842 8090

Tim Harrison Associate Partner tim.harrison@laytons.com +44 (0)20 7842 8039

laytons.com

Wealth & Asset Protection | Sensible Financial Planning

laytons.com

Wealth & Asset Protection | Sensible Financial Planning

laytons.com

LAYTONS LLP Our Sectors • • • •

Technology, Communications & Digital Media Construction, Land & Planning Personal Affairs, Private Wealth & Philanthropy Retail & Hospitality

This information is offered on the basis that it is a general guide only and not a substitute for legal advice. We cannot accept any responsibility for any liabilities of any kind incurred in reliance on this information. This publication represents the legal position as of March 2018.

Our Expertise • • • • • • • • • • • •

Banking & Finance Charities Commercial & Corporate Data Protection & Information Disputes Employment & Immigration Family & Matrimonial Insolvency & Restructuring IP & Technology Real Estate Tax Trusts, Estates & Private Client

LAYTONS LLP London

Manchester

Guildford

2 More London Riverside London SE1 2AP +44 (0)20 7842 8000 london@laytons.com

22 St. John Street Manchester M3 4EB +44 (0)161 214 1600 manchester@laytons.com

Ranger House, Walnut Tree Close Guildford GU1 4UL +44 (0)1483 407 000 guildford@laytons.com

laytons.com

Š Laytons LLP is authorised and regulated by the Solicitors Regulation Authority (SRA Nº 566807) A list of members is available for inspection at the above offices.