Picture the scene. Your search for a ‘good breeder’ with a helicopter license has proven unfruitful. Your mansion, a family seat from the time of Duke Wellington, is on the market for over £3 million. You move into more humble lodgings: your £585,000 farmhouse in Rural Somerset. But, before you can settle in, you find the property ordered for sale due to your three-decade old divorce.
Sound familiar? For most of us, absolutely not. However, the recent outcome of controversial aristocrat Sir Benjamin Slade and (his ex-wife) Lady Pauline Slade’s court case serves as a potent reminder of the need for finality and certainty in financial remedy proceedings. More than that, it is a cautionary tale about divorce financial settlements – and why a clean break order, agreed at the time of divorce, can spare you years of costly disputes later.
The Case
Upon the parties’ divorce in 1991, Lady Pauline was granted a trust worth £1.2 million: comprising an ‘income fund’ (worth around £651,000) and the Somerset house. In 2023, she moved out of the property and requested the house be sold by trustees to help settle her debts and increase her income – despite Sir Slade having since moved in.
Sir Slade argued that Lady Pauline did not have the right to sell the home, as the trust only allowed her to live there rent free for life or to sell and buy a replacement home. The house was not intended as an income producing asset: that was the purpose of the £651,000.
In her high court judgment, Master Julia Clark ruled that the trust was intended to give Lady Pauline ‘income for life’. Therefore, using the sale of the property to enhance her income (instead of purchasing a replacement home) did not cause the overall purpose of the trust to come to an end. She could sell the property and keep the proceeds.
Why did this Happen?
Well, if you ask Sir Slade, he has run afoul of ‘reverse misogyny’ and ‘class hatred.’ An interesting interpretation. But, if we put aside Sir Slade’s concerns for the plight of the wealthy white man, Master Clark’s judgment does raise interesting questions regarding the role of trusts.
Trusts in Divorce Settlements
In divorce proceedings, there are two types of trust:
- A pre-existing trust which the court will attribute to one of the parties or consider as a nuptial asset.
- A new trust created to implement the divorce order.
We are dealing with the latter. Lady Pauline’s trust was created during divorce proceedings to ensure she had ‘income for life.’ The issue for Sir Slade is the looseness of this term. The court requires precise drafting and, if this is lacking, you may find you have given effect to an undesired outcome (such as the loss of your Somerset farmhouse).
Of course, trusts can prove a useful solution, especially if the funds or assets in question are intended for a third party. For example, an investment or bank account intended for the benefit of children of the marriage. Placing such assets in a trust ensures that these funds can only be used for the specified purpose and prevents the enrichment of one party over the other. Therefore, when drafted accurately, trusts can provide certainty for families going through a split.
That said, there is also a benefit in the conclusive certainty of a clean break order. This would prevent the raising of further proceedings in later years – such as the three decades which had passed from Sir Slade’s divorce and the conclusion of this case.
Is there a time limit on divorce financial settlements?
It is often a misconception that a divorce covers all aspects of a marriage ending. And whilst it ends the marriage on paper, any matters concerning children and finance require their own proceedings. And, following a divorce, there is no time limit for initiating financial remedy proceedings. This means that even with a final order for divorce, you can still find yourself back at court years later if your finances have not been sorted.
How can you stop a financial settlement being reopened?
- Whatever stage of your divorce you are at, make sure you start organising your finances. If the division is already agreed between you, this could be through a consent order, which we offer for a fixed fee.
- If you’re looking to set up a trust as part of this, make sure it is precise, and only covers the exact purpose or funds desired. This is where a solicitor’s experienced eye is key.
- If you’re seeking to avoid these arguments, be they over a semi-detached property or a Baronet’s farmhouse, consider drafting a pre-nuptial agreement before you are married. Or, if the marriage has already taken place, a post-nuptial agreement serves the same purpose.
So, whilst your sympathy for Sir Slade, who once opened submissions on national television for a ‘castle-trained’ wife, may be subjective, there is no doubt that this case highlights the importance of good drafting and forethought when settling financial disputes.
A recent article on Sir Slade’s divorce :
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Article prepared by: Judith O’Brien, Partner, Family Law and Daniel Tothill, Paralegal.
Judith O’Brien is a Partner in our Family Law team and a member of Resolution, the organisation committed to a non-confrontational approach to resolving family issues. She holds the Law Society’s Advanced Family Law Panel qualification, recognising her expertise in both children law and financial matters arising from relationship breakdown.
With over 30 years’ experience in family law, Judith advises on divorce, financial settlements, pre-nuptial and post-nuptial agreements, separation agreements and children law matters including arrangements for contact and residence.
Solicitor, admitted 1997 | SRA ID: 176870
