Those of us who follow the longest running and most well known radio soap will be only too aware of the sad news of Alice and Chris’ divorce on the Archers. Although fictional, what lessons can be learnt from the events of the soap?
Reaching a fair settlement
After a Vegas wedding, a spiral into alcoholism and the recent arrival of their daughter Martha, the marriage has not been short of drama.
As is often the case, in circumstances where the marriage is of a reasonable length and there is a minor child to consider, both parties want a settlement which reflects what is fair and what will meet their respective needs.
Given Alice’s family wealth and her share in Home Farm, Chris is quite rightly starting to look at how those assets will be taken into account.
Protecting your interests
In circumstances where part of Alice’s assets comprise the farming partnership, the best way for her to protect her interest would have been to enter into a pre- or post-nuptial agreement. Those agreements, whilst not binding on any family court judge, would hold significant persuasive weight in looking at how the joint and sole assets held should be treated.
In the absence of any such agreement, Alice’s share in the family business is at risk. The view of court would likely be that Alice’s business interests are a non-matrimonial asset given that it is not something that the parties have built up and contributed to jointly during the marriage, and is therefore capable of being ringfenced.
However, it is possible for court to “invade” non-matrimonial assets where required in order to meet the needs of the parties, and any minor children – in this case, Martha.
Valuing assets
The first step when looking at business assets would be to see whether there is an agreement as to the value and subsequently, Alice’s share of that. In farming partnership cases this can be particularly complex, especially in the absence of any written partnership agreement.
Invariably, parties will require the expertise of a forensic accountant who is instructed jointly and who will provide a valuation.
The accountant will provide a full report, having looked at all the partnership documents and accounts and often undertaking a site visit, commenting on value, tax issues, liquidity and exit options, amongst other things specific to that business.
The parties are then able to raise questions on the report if considered necessary. In Alice and Chris’ case, there was a round-table meeting with the accountant present, but in reality, this is not usually the case so as to ensure absolute impartiality.
The court and the parties will then be bound by the valuation and that figure will be used for the purposes of the settlement negotiations.
The broad legal principle governing Chris and Alice’s divorce however will be “need” and despite holding status as a “non matrimonial asset”, the court may consider it necessary to look to Alice’s family business interest as a resource to meet those needs.
We work closely with a large number of expert accountants who are familiar with scenarios akin to the Archers storyline and it is vitally important to take legal advice at an early state where business interests feature in cases of marital and relationship breakdown.