In recent weeks the news has been rife with articles reporting that divorce proceedings have left the 1988 Winter Olympic ski-jump underdog, Eddie the Eagle, living in a shed and surviving on egg sandwiches.
Michael "Eddie" Edwards revealed that he has been 'wiped out' following divorce from his wife of 13 years. He commented that he has been forced to handover about 85% of his wealth, including the £180,000 earnt from the recent release of the biopic film portraying his raise to fame.
It has been reported that Eddie has consequently moved out of the family home and is now living in a shed in the garden of a property he is currently renovating. Eddie explained that he has been living off sandwiches ever since as he is currently without a kitchen.
Eddie has also had to sell his Bedford Flat in order to cover the tax due on the £180,000 received for the film rights. He will also have to pay capital gains tax from the property sale. What money Eddie had left has therefore been ring fenced in anticipation of the incoming tax bill.
With similar stories becoming increasing common in the news, readers are often left wondering what action can be taken to avoid suffering from similar fates.
What actions could Eddie have taken in an attempt to protect his wealth?
One available option would have been entering into a Pre-nuptial Agreement. Pre-nuptial Agreements give couples with differing levels of assets the possibility of attempting to 'ring fence' previously owned monies or investments from a divorce taking place and those assets being divided. The Pre-Nuptial Agreement will set out what the couple agree should be the financial settlement if they have a divorce in the future.
Since Eddie signed the film rights deal 7 years prior to his marriage he could have attempted to exclude the monies he anticipated receiving from ever being divided in the event of a divorce. As with all Pre-Nuptial Agreements there is never any guarantee that it will be accepted by the Court and it is vitally important that early legal advice is taken. In order to increase the chance of the Pre-Nuptial Agreement being subsequently upheld by the Court it will be necessary to ensure that the Agreement is basically fair at the time, both of the couple have received legal advice with full information being provided and the Agreement is not completed too close to the marriage.
Another option would have been entering into a Post-Nuptial Agreement after the marriage took place. Like Pre-Nuptial Agreements they can set out what the couple agree should be the financial arrangements if there is a divorce in the future. The Courts have always been more prepared to uphold such an agreement. A Post-Nuptial Agreement could have been used by Eddie in an attempt to safeguard the anticipated money and any other assets which might otherwise be put in jeopardy on a marriage breakdown.
To find out more or discuss your individual requirements in further detail, our dedicated Family Law Solicitors will be delighted to help. Contact us today on 01603 693500 or email us using the 'Make an enquiry' form. Appointments available at our Norwich, North Walsham, Brooke and Sheringham offices.