Short, sharp sharing - are assets split equally following a 'short' marriage?
The recent case of Sharp v Sharp  has changed the way the courts will divide up a divorcing couple's assets where the marriage is short and childless.
Julie and Robin Sharp had been married for four years, following two years of living together, they separated in 2013 when Mrs Sharp discovered her husband's infidelity. They had no children together and both worked full-time. Mrs Sharp was an energy trader and Mr Sharp was an IT consultant. At the start of their marriage they were both earning similar basic annual salaries of around £100,000, but Mrs Sharp received bonuses thereafter of £10.5 million. Mr Sharp's bonuses were insignificant. Before they got married they bought a property in joint names for £1.02 million which was funded solely by Mrs Sharp. During the marriage they bought a second property in joint names for £2 million. Other than the jointly owned properties they generally kept their finances separate.
Originally the court awarded Mr Sharp £2.725 million, worked out as half of the matrimonial assets. These assets totalled £6.9 million but Mr Sharp conceded that this figure should be reduced to £5.45 million to take out the first property, funded solely by his wife. Mrs Sharp appealed and argued that her husband should not get as much as half of the matrimonial assets given their marriage was short, childless, they both enjoyed full-time employment and had largely kept their finances separate.
The Court of Appeal reduced Mr Sharp's award to £2 million. In addition, the judges took a different approach to the properties, considering that Mr Sharp should receive 50% of the value of these, approximately £1.3 million. The Court of Appeal held that Mr Sharp should receive an additional lump sum to make the total £2 million to take into account:
- the standard of living enjoyed throughout the marriage;
- the need for a modest capital fund in order to live in the property he would retain; and
- some share in the assets held by Mrs Sharp.
Previously the case law had suggested that all matrimonial property and assets should be divided equally, but this decision acknowledges that, whilst this may be appropriate in many cases, it should not be an automatic presumption. The length of the marriage is a relevant factor to be taken into account when apportioning the assets.
Some questions remain, for example how many years constitutes a short marriage? This can sometimes be difficult to pin down, particularly if couples live together before they marry as this cohabitation time can be added to the length of the marriage. The best way to avoid uncertainties if you are concerned about protecting your assets is to put in place a pre-nuptial agreement before you marry, or a post-nuptial agreement after marriage. Whilst these lack romance they provide certainty in that the current case law shows they will be upheld unless there are significant reasons not to.