Wedding bells to alarm bells: how divorce risks family businesses

Divorce is rarely simple—but when there are significant or complex wealth structures involved, the stakes become much higher.

The English Family Court applies the “sharing principle” broadly, and even nonmarital assets can become subject to division. For families with business assets, investments, or inter-generational trusts, preparing in advance is not only prudent—it can be vital to preserving legacy, stability, and control.

With this in mind, there are numerous key considerations that HNWIs and their IFAs must make when navigating this difficult landscape, to give the best chance of bolstering defences and securing a positive outcome.

Preserving non matrimonial wealth

This month, the Supreme Court handed down its landmark ruling in Standish v. Standish which affirmed that non matrimonial assets – for example, those acquired before marriage – need not automatically be shared, even if held by a spouse for reasons such as inheritance tax planning.

However, the Court also cautioned that assets can become “matrimonialised” through use or shared intent during a marriage. For high net worth individuals, the case underscores the importance of detailed records and transparent intentions, helping ensure that non-marital wealth remains protected in the event of divorce.

The power of nuptial agreements

Pre-nuptial and post-nuptial agreements are among the most effective tools for protecting wealth in the event of divorce. While not automatically binding here, the English Family Court is increasingly likely to respect them if they have been entered into properly by being fair to both spouses, freely agreed, with full financial disclosure and independent legal advice.

Amongst other reasons, these agreements allow couples to:

• Define what is matrimonial (to be shared) and non matrimonial (to be excluded);
• Set valuation methods for a business or investment upon divorce; and
• Exclude inherited wealth or earmark it for children from previous relationships.

Even where not fully binding, they influence outcomes and are likely to act as a drag on a financially weaker spouse’s financial claims.

Structural legal protections: shares, trusts, governance

Beyond agreements, HNWIs and their IFAs should be aware of the robust structural layers that can help to shield assets:

• Shareholders’ or partnership agreements can seek to stipulate that shares must only pass to lineal descendants;
• Trusts may offer a layer of separation compared to those assets held in a spouse’s personal name and much will depend on the specific circumstances of the family and the use of the trust during the marriage.
• Policies can be put in place by a company’s shareholders / family offices / trustees to provide that all family members or shareholders must enter into a nuptial agreement in advance of marriage or before acquiring shares / an interest in wealth structure.

Financial preparation and early professional advice

In the event of a divorce involving a privately owned business, it is highly likely that an independent valuation will be required by a forensic accountant. Equally, impartial expert reports on the value of other assets such as artwork or real estate, or on the appropriate sharing of pensions, is likely. Being mindful of this – particularly the documents that would be expected to be disclosed to any such expert – is vital.

In addition, the venue for any divorce and associated financial dispute can impact the outcome materially. International families may have connections to a number of different jurisdictions and some will be far more favourable than others. Taking early advice to maximise protection is key.

Privacy and confidentiality considerations

There is a big push for more transparency in financial remedy proceedings on divorce in England. Given the Court’s wide powers to order disclosure, there is real risk to business owners and those who value wealth privacy. Nuptial agreements can help to mitigate the risk of public and damaging litigation. There are also many private forums available to seek to resolve disputes out of Court which ought to be considered carefully.

Key takeaways

For those with significant wealth or business interests, early preparation is not optional – it’s essential. Without it, there is real risk of asset dilution, loss of control, and public scrutiny. By utilising proactive IFAs and implementing protections early on, wealthy families can mitigate these risks even if a marriage ends.

This article was first published in IFA Magazine in July 2025.