In the majority of marriage breakdowns there is a modest amount of assets to argue about: a house, a couple of ISAs, a small pension and some debt. The parties are likely to only be considering their needs and their children’s, for income and housing.
Over and above that, the principle of achieving equality applies and, if there are more assets, cash and pensions to meet the parties’ needs, then the starting point will be a 50:50 divide.
The division will also be linked to how much sharing and intermingling of assets there has been or how many of the assets were accumulated during the course of the marriage. The length of the marriage may be relevant.
Courts also take into account the standard of living enjoyed by the parties during the marriage. Aspiration couples looking for a status symbol and an entrée into another lifestyle may have used some of their surplus assets to buy a yacht. Hence, the yacht has featured in many a tabloid headline about divorces of the rich and famous.
In the recent divorce case of Russian couple Mr and Mrs Potanin, the pair squabbled over £10bn of assets accumulated during their long marriage, from the time they were both poor students. Mrs Potanin wanted one of the family yachts as part of her settlement. In the Russian court, Mr Potanin offered her £32m as a settlement (an insufficient amount to afford even one super yacht). So, she sought to issue proceedings within the jurisdiction of the UK (our courts being perceived worldwide as the most favourable to the weaker party in divorce).
In another recent UK divorce case, a supermodel demanded £196m or settlement from her Saudi billionaire husband. Again, she wanted access to the yacht. Her income requirement for the yacht was: £482,416 for the superyacht rental for two weeks; £144,475 to provision it; and £4,824 to tip the crew.
In another more modest 2005 case, the yacht was at the centre of a bitter attack and destruction. The husband involved in the acrimonious divorce, sank the £100,000 family yacht in Dartmouth harbour after his estranged wife advertised it for sale at just £40,000.
The reality is that the yacht is like any other asset of the marriage – forming part of the pool of assets for distribution. Any party looking to keep it should consider:
- How much use and enjoyment they will get from it
- What the per annum cost of upkeep such as berthing and mooring fees are
- If they decide to sell, what is its value and is there a second-hand market for it?
- How easily it can be sold
Yachts can often be surprisingly valuable. Any good divorce lawyer will advise that the yacht is valued by a reputable yacht valuer/broker.
There is no guarantee which party will get the yacht. The one most passionate about keeping it may have to compromise their position and sacrifice some other asset. It’s important to ensure, whether it is a yacht or another high-value asset, that its true value is quantified in the divorce settlement.
Alternatively, you may not want to consider the value of the yacht at all but rather rename it “The Next Chapter” (which is just what one divorcee did on divorce), and sail off into the sunset. But the wise mariner would do well to obtain expert legal advice first.