Daily Mail: Divorcee Targets Her Father-in-law's Fortune

[Biwah]

Daily Mail (London)
February 15, 2005

Divorcee Targets Her Father-in-law's Fortune

By Beth Hale

When dotcom millionaire Jonathan Rowland's marriage broke up, he was keen to
keep the peace with his ex-wife Zoe.

He made what he thought was a generous offer, considering that they had been
married only four years, and they appeared close to a settlement.

But now 30-year-old Mrs Rowland has decided she wants more.

She is said to be demanding a share not just of her ex-husband's fortune but
that of his father David, a City financier and one of the richest men in
Britain with wealth estimated at GBP 690million.

With that in mind, she has hired two of the most successful divorce lawyers
in the business. Her barrister is Nicholas Mostyn QC, who represented
footballer's wife Karen Parlour when she secured a major share of former
Arsenal star Ray Parlour's future earnings.

And her solicitor is Kay Georgiou, who won a GBP 10million settlement for
Zeta Graff, the exwife of diamond heir Francois Graff.

The case will be watched with anxiety by rich parents everywhere -
particularly the owners of successful family firms.

Jonathan Rowland, 29, an amateur racing car driver and pilot, attended Hill
House, Knightsbridge - where a more famous past pupil is Prince Charles -
and then Bedales in Hampshire before leaving school at 16.

It is said that, before they married, Zoe urged him to join his father in
business.

An interview in 2002 revealed how she said: 'What on earth are you doing?
Why aren't you working with your father?'

Jonathan said: 'I went round to his house the next day and said, right, I'm
ready to work with you side by side.'

After two years being guided by his father, he took GBP 7million of family
money and created an Internet investment company JellyWorks, selling it

for GBP 50million just before the dotcom bubble burst. He went on to set up
Resurge, a venture capital company.

Until the marriage broke down he and Zoe had been living together at a GBP
1.2million house in Chiswick, West London.

Jonathan's father David, now 58, made his fortune in property and
investments. He was nicknamed Spotty Rowland because he made his first
million while still a 'spotty youth' of 23.

Once a celebrity in the City, he shuns the spotlight

in his retirement and lives with wife Sheila in Guernsey, where he counts
the reclusive Barclay brothers among his friends.

He and his son's joint wealth led to them together being ranked 49th in last
year's Rich List. Most of the family's fortune is thought to be in offshore
investments.

It was revealed yesterday that Zoe, who earns about GBP 40,000 a year at
Londonbased Lime Communications, decided to aim for a chunk of his family
money after a meeting with her advisers.

The divorce case is expected to be heard in private in the Family Court
starting next month.

The Rowlands are said to be upset at the action she is taking, believing
they have been 'generous' to her.

Mrs Rowland's father Ray Clarkes said: 'They were happily married and then
suddenly the thing falls apart. It's all very sad indeed.'

A family law expert yesterday said it was unheard of for a woman to make a
claim on the assets of anyone other than her husband. Lawyer Nigel Shepherd,
former national chairman of Resolution -- the Solicitors' Family Law
Association -- said: 'The court cannot make an order against the assets of
someone else.'

But he added that projected inheritance could be factored in when looking at
the overall circumstances -- Mr Shepherd said a judge looked at numerous
factors, including standard of living, longevity of marriage and whether
children are involved when determining divorce settlements.

'The court is not going to make an order on the basis that a one day a man
may be phenomenally wealthy in his own right and a woman will certainly not
be awarded half a man's assets after just four years.'

He said depending on circumstances Mrs Rowland could be aiming for GBP
2million to GBP 3million, including a house.

The highest divorce payout in Britain, at GBP 26.3million, is thought to
have been received by Mona al-Khatib, the wife of a Saudi Arabian
businessman. Princess Diana received GBP 17million.

----------

In accordance with Title 17 U.S.C. Section 107, this material is distributed
without profit to those who have expressed a prior interest in receiving the
included information for research and educational purposes. Original
publisher's copyright reserved.

[:: Archie ::]

Greedy Cow

[Fred]

Post by Biwah
Daily Mail (London)
February 15, 2005
Divorcee Targets Her Father-in-law's Fortune
By Beth Hale

<snip>

I had this trouble. Just got my parents to will all their monies to my
sister! And yes I do trust my sister. Solved any potential claim.

Alternative is to will it to grandchildren - bypassing the ex!

[k***@yahoo.com]

Post by Fred

Post by Biwah
Daily Mail (London)
February 15, 2005
Divorcee Targets Her Father-in-law's Fortune
By Beth Hale

<snip>
I had this trouble. Just got my parents to will all their monies to my
sister! And yes I do trust my sister. Solved any potential claim.
Alternative is to will it to grandchildren - bypassing the ex!

It's not uncommon for divorce courts to look at trusts that favor one
soon-to-be-ex, whether the trust was set up by the spouse, as in
http://www.assetprotectiontheory.com/Riechers_v_Riechers.htm
or not.

But it's odd to take into consideration an expectancy that may never be
realized. Indeed, in pre-bankruptcy (and pre-divorce, for that matter)
planning lawyers are supposed to advise their clients to have parents
re-write their wills and set up bypass and discretionary trusts that
make it impossible for a disgruntled ex-spouse or a creditor or a
bankruptcy trustee to claim the money. But in our present litigious
era, it happens anyway.

The problem with giving it directly to a sister is that there can be
gift tax problems and creditor problems and your sister's own spousal
problems, and so on. A discretionary trust is great, but hard to afford
with less than $1 million in capital.

[Jeff Strickland]

Post by k***@yahoo.com

Post by Fred

Post by Biwah
Daily Mail (London)
February 15, 2005
Divorcee Targets Her Father-in-law's Fortune
By Beth Hale

<snip>
I had this trouble. Just got my parents to will all their monies to

my

Post by Fred
sister! And yes I do trust my sister. Solved any potential claim.
Alternative is to will it to grandchildren - bypassing the ex!

It's not uncommon for divorce courts to look at trusts that favor one
soon-to-be-ex, whether the trust was set up by the spouse, as in
http://www.assetprotectiontheory.com/Riechers_v_Riechers.htm
or not.
But it's odd to take into consideration an expectancy that may never be
realized. Indeed, in pre-bankruptcy (and pre-divorce, for that matter)
planning lawyers are supposed to advise their clients to have parents
re-write their wills and set up bypass and discretionary trusts that
make it impossible for a disgruntled ex-spouse or a creditor or a
bankruptcy trustee to claim the money. But in our present litigious
era, it happens anyway.
The problem with giving it directly to a sister is that there can be
gift tax problems and creditor problems and your sister's own spousal
problems, and so on. A discretionary trust is great, but hard to afford
with less than $1 million in capital.

All of this is beyond the pale. The spouse should not be able to go after
the assets of the parents, even if those assets might one day flow to the
othe spouse.

If the spouse here can go after the parent's assets, then a bankrupcy court
can go after the parents as well. Or a simple liability case can extend from
an adult child to a parent. We expect parents of minors to have legal and
financial liability for the acts of the child, but I have never heard of
going after the parents of adult children. This case can change that.

[Fred]

Post by Jeff Strickland
All of this is beyond the pale. The spouse should not be able to go after
the assets of the parents, even if those assets might one day flow to the
othe spouse.
If the spouse here can go after the parent's assets, then a bankrupcy court
can go after the parents as well. Or a simple liability case can extend from
an adult child to a parent. We expect parents of minors to have legal and
financial liability for the acts of the child, but I have never heard of
going after the parents of adult children. This case can change that.

I was told some time ago it also depended on the life expectancy of the
parent, particularly if death was imminent.

[Biwah]

Post by Fred
I was told some time ago it also depended on the life expectancy of the
parent, particularly if death was imminent.

That is "forced heirship" by the back door. And then some...

[Jeff Strickland]

Post by Fred

Post by Jeff Strickland
All of this is beyond the pale. The spouse should not be able to go after
the assets of the parents, even if those assets might one day flow to the
othe spouse.
If the spouse here can go after the parent's assets, then a bankrupcy

court

Post by Jeff Strickland
can go after the parents as well. Or a simple liability case can extend

from

Post by Jeff Strickland
an adult child to a parent. We expect parents of minors to have legal and
financial liability for the acts of the child, but I have never heard of
going after the parents of adult children. This case can change that.

I was told some time ago it also depended on the life expectancy of the
parent, particularly if death was imminent.

Perhaps, but this is not at issue here. The parents are healthy and by all
that I have heard, are expected to be around for a long time. Indeed, they
are expected to live longer than the child and his wife were married.

[John-Smith]

Post by k***@yahoo.com
It's not uncommon for divorce courts to look at trusts that favor one
soon-to-be-ex, whether the trust was set up by the spouse, as in
http://www.assetprotectiontheory.com/Riechers_v_Riechers.htm
or not.
But it's odd to take into consideration an expectancy that may never be
realized. Indeed, in pre-bankruptcy (and pre-divorce, for that matter)
planning lawyers are supposed to advise their clients to have parents
re-write their wills and set up bypass and discretionary trusts that
make it impossible for a disgruntled ex-spouse or a creditor or a
bankruptcy trustee to claim the money. But in our present litigious
era, it happens anyway.
The problem with giving it directly to a sister is that there can be
gift tax problems and creditor problems and your sister's own spousal
problems, and so on. A discretionary trust is great, but hard to afford
with less than $1 million in capital.

When I last looked at this (a few years ago) there was some case law
around where a divorcing woman was able to get a bigger slice of the
matrimonial assets because her husband had an elderly relative who was
wealthy and who was in poor health.

The crucial thing to understand is that the divorce court doesn't have
to be able to confiscate the assets of the 3rd party. What it can do,
and frequently does, is to take into account such assets when dividing
up the *existing* cake.

So if a divorcing couple had assets of say 1M, and let's say the woman
would have got 500k out of it, then if the man had a near-death uncle
worth another 1M the court has the power to take this potential
inheritance into account and change the dividion from 500k:500k to say
800k:200k in favour of the woman.

Divorce courts have almost unlimited powers to "take into account"
assets existing anywhere whatsoever no matter how tenuous. The fact
that they can't grab them isn't relevant.

Another example is the man having a share of a business; the business
share usually cannot be forcibly sold. But the Court can stick a value
on it as it wishes. This is why divorcing businessmen usually get
truly shafted, often coming out with no personal assets and retaining
just their income. That happened to me. Marriage amounts to MAD
(mutually assured destruction).

However newspaper accounts of these things are rarely accurate!!!

[sufaud]

Post by John-Smith
When I last looked at this (a few years ago) there was some case law
around where a divorcing woman was able to get a bigger slice of the
matrimonial assets because her husband had an elderly relative who was
wealthy and who was in poor health.

As you say, anecdotal data have little meaning.

If the old geezer lacks capacity to write a will, then fine. But how can the
divorce court know what the will says -- it's virtually impossible to get
discovery of a will even where the testator is non compos mentis and has a
guardian who lacks the right (the case in England) to write a will or
codicil without court approval.

We're not talking France or Switzerland or another European country, or
Louisiana before it changed its law: in America and England, you can
disinherit anybody. In America the wife can "take against the will", usually
1/3 or 1/2. But in England, the only restraint on freedom of testation is
that you can't leave her totally destitute.

[John-Smith]

Post by sufaud

Post by John-Smith
When I last looked at this (a few years ago) there was some case law
around where a divorcing woman was able to get a bigger slice of the
matrimonial assets because her husband had an elderly relative who was
wealthy and who was in poor health.

As you say, anecdotal data have little meaning.
If the old geezer lacks capacity to write a will, then fine. But how can the
divorce court know what the will says -- it's virtually impossible to get
discovery of a will even where the testator is non compos mentis and has a
guardian who lacks the right (the case in England) to write a will or
codicil without court approval.

The key is that, loosely speaking, the UK divorce court works behind
closed doors, nobody can report on the proceedings without being in
contempt, and the judge can take just about anything into account. The
court may not be able to get its hands on assets, but it can move
other assets (which it has control over) to compensate.

I know it doesn't make sense, but it happens every day in the UK,
somewhere. Divorce law runs according to which side of the bed the
judge fell off that morning.

Post by sufaud
We're not talking France or Switzerland or another European country, or
Louisiana before it changed its law: in America and England, you can
disinherit anybody. In America the wife can "take against the will", usually
1/3 or 1/2. But in England, the only restraint on freedom of testation is
that you can't leave her totally destitute.

Not quite. There is recent case law on enforcement of wills, where the
testator had signed a contract saying he will make a provision in his
Will for another party to the contract.

Now, how far is such a contract away from a marriage contract ??? :)
The only difference is that a dispute over a normal contract is heard
in an open court, whereas the marriage one is heard in secrecy. Also
the quality of legal advice is likely to be a lot lower in the latter
case. Very few clever lawyers do that work in the UK.

[sufaud]

Post by John-Smith
The key is that, loosely speaking, the UK divorce court works behind
closed doors, nobody can report on the proceedings without being in
contempt, and the judge can take just about anything into account. The
court may not be able to get its hands on assets, but it can move
other assets (which it has control over) to compensate.

It is true that English divorce law is in flux, and the judges have taken it
upon themselves to legislate. I recently advised a dual national (she and
her daughter had British and a Latin American nationality; the
husband/father was Irish) to tear up a proposed divorce petition, get back
together with her (willing) husband, contrive to get consent (The Hague
Convention child abduction rules) for a move to the USA, and then spring the
divorce on him there, after a discreet wait.

Like IHT and insolvency, this development represents a trap for the unwary.
Those who are aware can ring-fence their assets, even with a foreign-based
self-settled trust (the USA has become a trust haven in recent years, with
states racing each other to the bottom).

When I was growing up, "can't pay, won't pay" was the by-word. People with
farms and small businesses are vulnerable. Those with no assets, but
expectations, have little to fear. There are a very few -- only one whom I
can think of -- in prison for life because he can't (the judge says "won't")
reveal [nonexistent] hidden assets. H. Beatty Chadwick:
http://www.judicialaccountability.org/articles/7year.htm

There's a Jewish guy in prison for "life" for refusing his ex a "get"
(Jewish divorce) so she can re-marry, but that's another story.

Cans of worms, all of these. Trouble is that people don't usually look
ahead, don't or won't see the handwriting on the wall. Too frequently the
other spouse sees it all, and is banking on cashing in the chips.

[sufaud]

Here's what the FT has to say today on the case, and on its implications.
It's consistent, I think, with what I've said. I have reason to be quite
familiar with the law of fraudulent conveyance, and with asset protection
matters and cross-border insolvency law. A judgment against a "reasonably
foreseeable inheritance" that never comes to pass, or an offshore
discretionary trust that dries up, reminds me of the Ian Maxwell case, and
is likely to have the same result. With trusts, vested rights -- or the
absence thereof, and the credibility of the trustee and the trust protector
(if any) have a bearing on the result.

One open question is whether a pre-nup that specifies foreign law with which
the marriage has a real connection can be enforced. Nobody knows how English
law will rule on that point, but Brussels II (the EU convention on family
law) might control.

-----

Wife seeks spouse's family assets
By Lucy Warwick-Ching

Financial Times
Published: February 25 2005 16:56

An unusual divorce case in which the estranged wife is seeking a share of
her husband's family's wealth is unnerving wealthy families around the
country.

Zoe Rowland is thought to be seeking a share of the assets of her husband
Jonathan and his father, who is one of the richest men in the country. The
details of the case are still unknown and family law experts are sceptical
about the ability of one partner to claim assets of a third party. But if
Mrs Rowland succeeds, the case could set a precedent for other divorcees to
lay claim to fortunes of their spouses' families.

Suzanne Kingston, head of family law at Dawsons, a firm of solicitors, says
divorce cases normally only involve the assets of the two spouses.

"In divorce cases the applications are made between the husband and the wife
and do not involve third parties," she says.

But, as the law currently stands, Kingston says Mrs Rowland could still make
a claim against a reasonably foreseeable inheritance. "For example, if
Jonathan's father was terminally ill and expected to die in the near future
then inheritance could be included," she says.

She believes it much more likely that this case is actually about family
wealth, rather than inheritance. "In family money cases the money is often
tied up in trusts and Mrs Rowland may have been advised to make a claim
against her husband's trust interest," she says.

However, she points out that the court looks at several factors when
considering an application against a spouse's trust interest. This would
include the length of the marriage, whether or not there was a premature
cohabitation, the standard of living of the parties and whether there were
children.

One way to avoid protracted and expensive legal battles when love turns sour
is through a pre-nuptial agreement.

"Pre-nuptial agreements are primarily taken out to save money and wrangling
in the case of a divorce, perhaps to protect a property which is intended to
be passed down the family line, or to protect the interest of children from
a previous relationship," says Robert Kerr, a matrimonial experts in
financial settlements at Grant Thornton's Forensic Practice.

But, English law is out of line with other legal jurisdictions which have
long supported the pre-nuptial. Under English law, a pre-nuptial is still
nothing more than a statement of intent between the parties.

"Pre-nuptials currently have no statutory recognition," says Kerr. "However,
recent judicial decisions would suggest that, under certain circumstances,
couples would be bound by them. It is only a matter of time until English
law falls in to line with international acceptance of pre-nuptial
agreements."

Although pre-nuptials are not legally binding, they can be taken into
consideration in divorce settlements. For a pre-nuptial arrangement to have
any clout at all it needs to be initiated by the intended couple and
executed no less than 21 days before the marriage date. But pre-nuptials are
particularly important where there is a family business involved says Simon
Bruce, a family law specialist at Farrers & Co, the law firm. "In cases
where an agreement cannot be reached, the divorce courts have wide powers to
transfer assets and shares from one partner to another. They can also order
that a partner's interest, or the company itself can be sold."

He says that though the court would be unlikely to force the sale of a
business where it provided the main income for a family, there are cases
when a formal valuation is crucial. These include situations where the
majority shareholder is close to retirement, where the company is about to
be sold or floated on the stock market, or where the business is a
partnership between husband and wife and one has most of the equity.

Bruce says in most cases it is much better to have an agreement whereby you
stipulate what happens if one of the business partners wants to sell their
share in the business.

"Otherwise, if something goes wrong, they're more likely to end up having to
sell the business, or have one partner borrowing heavily to buy out the
other partner," he says.

Aside from pre-nuptials, there are a limited number of financial measures
which can be taken by parents or a husband/wife party to ring-fence assets.

"The only money that is protected from a divorce is money that is held in
trust," says James Copson, family lawyer at Withers. "And even then, the
money is only safe if the trust was set up many years before the marriage.
Trusts which have a nuptial element are capable of variation and will be
taken into account when assessing wealth."

He says that if a trust was set up many generations before the marriage date
then the value of it is unlikely to be included in that person's assets.
"But it may still be taken into account when the judge is considering a
person's ability to pay income in a divorce settlement," he says.

Spending your money on that Picasso or just handing over money to your
sister in a bid to ensure that a former spouse does not get it will not
work.


http://news.ft.com/cms/s/12f83164-8725-11d9-9e3c-00000e2511c8.html

[John-Smith]

Post by sufaud
He says that if a trust was set up many generations before the marriage date
then the value of it is unlikely to be included in that person's assets.
"But it may still be taken into account when the judge is considering a
person's ability to pay income in a divorce settlement," he says.

[snip]

One area where a potential future wealth increase (e.g. an
inheritance) comes in is where the Court is looking at spousal
maintenance.

The Courts are known to make a s.m. order, even a tiny one like £1 a
year, when they think the man will come into some money. Any s.m.
order, no matter how small, can then be varied (upwards) if his
circumstances improve.

I now remember (from a few years ago when I had a reason to know all
this!!) that avoiding s.m. is crucial for any man who expects his
finances to improve. And let's face it, who has more than half a brain
yet *expects* to end up in the gutter?

The above mechanism is AFAIK the primary present means of getting hold
of a potential inheritance.

The other side of the above tactic (avoiding a s.m. order at all
costs) is that if one is sure the ex wife will remarry, and if one has
been able to negotiate some tradeoff between a capital transfer and
the s.m. (i.e. a tradeoff between a capital transfer and periodic
payments) then upon her remarriage the man can stop the periodic
payments! Of course his ex wife will know about this so she won't
remarry unless she is desperate to.

That's the situation I am in now, but I am content with the
compromise. My liability to periodic payments is specifically limited
to the outstanding mortgage on her house. However most divorced men
that pay s.m. don't have such a limit. The solicitor who originally
drafted mine got that bit badly worded, and the discovery of the error
drew attention all round to the potential windfall for my ex wife, and
it cost me a few k and a load of hassle to get her to agree to getting
the agreement redrafted....

Family law is such a sh1t business to be in.

As someone has said, if you work in a whorehouse, there is just one
option: to be the best whore in the house :)

Luckily, s.m. orders are getting less common.

[Incalcitrant]

Moneywhores . . . she's not entitled to a damn dime. The courts, however,
will financially rape Rowland. Divorced women are money-whores, and it
demonstrates men would be better off to pay for whores to visit them
occasionally for their sexual needs and not marry these trashy bitches.

Post by Biwah
Daily Mail (London)
February 15, 2005
Divorcee Targets Her Father-in-law's Fortune
By Beth Hale
When dotcom millionaire Jonathan Rowland's marriage broke up, he was keen to
keep the peace with his ex-wife Zoe.
He made what he thought was a generous offer, considering that they had been
married only four years, and they appeared close to a settlement.
But now 30-year-old Mrs Rowland has decided she wants more.
She is said to be demanding a share not just of her ex-husband's fortune but
that of his father David, a City financier and one of the richest men in
Britain with wealth estimated at GBP 690million.
With that in mind, she has hired two of the most successful divorce lawyers
in the business. Her barrister is Nicholas Mostyn QC, who represented
footballer's wife Karen Parlour when she secured a major share of former
Arsenal star Ray Parlour's future earnings.
And her solicitor is Kay Georgiou, who won a GBP 10million settlement for
Zeta Graff, the exwife of diamond heir Francois Graff.
The case will be watched with anxiety by rich parents everywhere -
particularly the owners of successful family firms.
Jonathan Rowland, 29, an amateur racing car driver and pilot, attended Hill
House, Knightsbridge - where a more famous past pupil is Prince Charles -
and then Bedales in Hampshire before leaving school at 16.
It is said that, before they married, Zoe urged him to join his father in
business.
An interview in 2002 revealed how she said: 'What on earth are you doing?
Why aren't you working with your father?'
Jonathan said: 'I went round to his house the next day and said, right, I'm
ready to work with you side by side.'
After two years being guided by his father, he took GBP 7million of family
money and created an Internet investment company JellyWorks, selling it
for GBP 50million just before the dotcom bubble burst. He went on to set up
Resurge, a venture capital company.
Until the marriage broke down he and Zoe had been living together at a GBP
1.2million house in Chiswick, West London.
Jonathan's father David, now 58, made his fortune in property and
investments. He was nicknamed Spotty Rowland because he made his first
million while still a 'spotty youth' of 23.
Once a celebrity in the City, he shuns the spotlight
in his retirement and lives with wife Sheila in Guernsey, where he counts
the reclusive Barclay brothers among his friends.
He and his son's joint wealth led to them together being ranked 49th in last
year's Rich List. Most of the family's fortune is thought to be in offshore
investments.
It was revealed yesterday that Zoe, who earns about GBP 40,000 a year at
Londonbased Lime Communications, decided to aim for a chunk of his family
money after a meeting with her advisers.
The divorce case is expected to be heard in private in the Family Court
starting next month.
The Rowlands are said to be upset at the action she is taking, believing
they have been 'generous' to her.
Mrs Rowland's father Ray Clarkes said: 'They were happily married and then
suddenly the thing falls apart. It's all very sad indeed.'
A family law expert yesterday said it was unheard of for a woman to make a
claim on the assets of anyone other than her husband. Lawyer Nigel Shepherd,
former national chairman of Resolution -- the Solicitors' Family Law
Association -- said: 'The court cannot make an order against the assets of
someone else.'
But he added that projected inheritance could be factored in when looking at
the overall circumstances -- Mr Shepherd said a judge looked at numerous
factors, including standard of living, longevity of marriage and whether
children are involved when determining divorce settlements.
'The court is not going to make an order on the basis that a one day a man
may be phenomenally wealthy in his own right and a woman will certainly not
be awarded half a man's assets after just four years.'
He said depending on circumstances Mrs Rowland could be aiming for GBP
2million to GBP 3million, including a house.
The highest divorce payout in Britain, at GBP 26.3million, is thought to
have been received by Mona al-Khatib, the wife of a Saudi Arabian
businessman. Princess Diana received GBP 17million.
----------
In accordance with Title 17 U.S.C. Section 107, this material is distributed
without profit to those who have expressed a prior interest in receiving the
included information for research and educational purposes. Original
publisher's copyright reserved.