How Influential Is Parental Wealth On Divorce?

ModernFamilies

The future financial landscape for millennials is, to put it mildly, rocky. For the vast majority, house owning is out of reach and with that many fear the prospect of 'long term financial security'.

The Resolution Foundation, a think tank dedicated to improving families' standard of living, say there is good news on the horizon. A report produced by the Foundation in June last year found that £11 trillion of wealth is currently in the hands of the ageing baby boomer generation. Millennials are set to benefit hugely from inheritance.

The issue of inheritance was at the forefront of a recent family law case (Hayat Alireza v Hossam Radwan [2017] EWCA Civ1545). The husband had wealth of around £16 million - the majority of which had originated from his inheritance. Although the wife by contrast had little in the way of assets in her own name, the High Court Judge found that the wife's future inheritance prospects from her wealthy father were so significant (and certain as a result of forced heirship rules in Saudi Arabia) that her financial needs arising from the marriage were accordingly limited. As a result the wife was granted only an entitlement to occupy a flat in London owned by the husband's family until the children had grown up or she got remarried. Although she was awarded a capitalised maintenance fund for her assessed income needs and maintenance for the three children, she did not receive any property in her own name (nor any money with which to acquire a home of her own).

The Court of Appeal did not agree with this approach. Instead, the appeal Judges were clear that the wife's future inheritance prospects did not diminish the financial claims she had flowing from the marriage. This meant that her husband had an obligation to provide sufficient funds to enable her to buy a home for her and the children outright. They observed that leaving the wife's future in the hands of a series of men (her husband, and thereafter a future husband of her father) 'sat uncomfortably with contemporary mores' and significantly impacted upon her personal autonomy in contrast to her former husband who had already remarried and started a second family.

As a general trend, not just inheritance but also the wider issues of parental support and family money have become increasingly prevalent features in divorce disputes. We have seen from case law that in addition to parents, other third parties (such as siblings as well as trustees and...