Divorce, Financial Remedies and Social Media
13 July 2021 by Joel Tyson
It is undeniable that there has been an exponential increase in the availability and use of social media platforms. In fact communication regulator, Ofcom, reported that UK adults are now spending over 25% of their waking day online, which is the highest on record.
Many individuals are utilising social media as a source of income with such examples being; YouTube streamers, social media ‘influencers’, Onlyfans and Bloggers. Many of these can generate substantial income from advertisement, pay-per-view content and paid subscriptions. It is reported that celebrities such as Kylie Jenner are paid approximately £1.2 million (£960,000) for a single post on Instagram.
It is therefore increasingly possible that those who are divorcing and seeking a financial remedy may wish to include social media accounts as an asset in the ‘matrimonial pot’.
How will these social media accounts be valued?
It is important that the parties in a financial remedy provide full and frank disclosure regarding their financial circumstances, including their income, capital and liabilities. This is so that the court can identify what assets are available and then divide them fairly based on several factors which are identified in section 25 of the Matrimonial Causes Act 1973.
The difficulty is that there is very little precedent on how to deal with assets of this nature and each case will vary depending on numerous factors. For example it may depend on whether the individual has created a private limited company relating to their social media income or whether they are operating as sole trader. In any case, the account owner would need to provide full and frank disclosure in relation to all their social media platforms including tax returns, business accounts, income and any other benefits received. Then, it is possible that an expert would need to be instructed to assess the value of the social media account and the affiliated goodwill and income generated.
How will these social media accounts be divided?
It is even more challenging to work out how to divide such an asset as they often rely on the account owner creating new content which the other party may be unable to do. Unlike assets such as the family home, transferring the account to the other party could catastrophically reduce the income and value of the asset, and it may also result in a breach of contract if the account owner has deals with certain brands or companies.
The Court must also give consideration to the future earning capacity of the parties. This is challenging as the income from social media can be sporadic and may deteriorate quickly over time. This is especially likely where the media content relates to health and fitness or relies on the account owner’s youthfulness which will become more difficult to produce over time.
Given the difficult nature of these assets, and the limited legal precedents on how to deal with them, expert legal advice should be sought as soon as practicable in cases where a high value social media account is relevant. Individuals who have social media accounts should also consider a pre-nuptial agreement prior to their marriage so that there is a recorded agreement as to how the parties have decided these accounts should be dealt with in the unfortunate event that they separate.
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