A beginners guide to divorce settlements
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Transcript of A beginners guide to divorce settlements
Don’t be taken to
the cleaners!A Beginner's guide to divorce
settlements
Presented by
Darrell Webb
Today’s Topics
What orders the Court can make;
Why the Court will make them;
How to get the orders you want.
Preliminary Points
First thing to say is that what I tell you today only
applies to ‘married’ couples – not cohabiting couples.
There is no such thing as a ‘common law’ husband or
wife – you’re either married or you are not.
There is currently no legislation to protect the rights of
cohabitating couples – which is something to bear in
mind, depending on whether you are the financially
stronger or weaker party to the marriage.
Married couples
The power of the Court to redistribute
assets on divorce is governed by the
Matrimonial Causes Act 1973.
The orders that the Court can make fall
into two main categories:
- income orders; and
- capital orders.
Income orders
Maintenance Pending Suit - interim
maintenance
Periodical Payments - maintenance orders
Secured Periodical Payments - secured
maintenance orders
Capital Order
Lump sum orders – one-off cash payment
Property Adjustment Orders - requiring property to be transferred or held on trust
Orders for Sale
Pension Sharing Orders
Limitations
Can’t apportion debts
Can’t force either party to enter into new
mortgage arrangement
Can’t determine child maintenance unless
gross weekly income more than £3,000
Maintenance Pending Suit
Maintenance pending suit (MPS) is
financial support paid by one spouse to
the other after divorce proceedings start,
until the divorce is finalised and a final
adjustment of finances is made between
the parties.
Reasonableness test
A v A award
A v A requirements1) Does the applicant have assets that it is
reasonable for her to deploy to meet the litigation costs?
2) Could the applicant raise a litigation loan?
3) Could the applicant fund the litigation by way of Sears Tooth charge?
4) Is public funding available which would "furnish her with legal advice and representation at a level of expertise apt to the proceedings".
5) Has the applicant taken a stance in the litigation that is so unreasonable as to dissuade a court from ordering the provision?
Periodical Payments
The Court can order that maintenance be paid for the benefit of a spouse (‘Spousal Maintenance’) or for the benefit of a child of the family (‘Child Maintenance’).
1. Child MaintenanceThe Court no longer has the jurisdiction to determine Child Maintenance claims. This is now the remit of the Child Maintenance Service (‘CMS’)
CMS CalculationFor most the calculation will be: -
If you want to get an idea of the amount of maintenance that would be payable you can use the CMS’s Child Maintenance Calculator on their website at:
https://www.gov.uk/calculate-your-child-maintenance
Number of
children
Percentage applied to
the first £800 of gross
weekly income
Percentage applied to
amount over £800 (up to
£3,000)
1 12% 9%
2 16% 12%
3 or more 19% 15%
2. Spousal Maintenance• Variable
• Joint lives orders
• Termed orders
• Nominal maintenance
• End automatically on remarriage
• Capitalisations
Lump Sum Orders
• One time only order
• Cannot be varied
• Can be made in instalments
Property Adjustment
Orders The Court can order that property be
transferred or held on trust.
Property can include the household
contents, shares, cars, pets etc.
Property transfers subject to mortgage
Orders for Sale
Can make only if one of the following orders has been made:-
a) secured periodical payments order
b) a lump sum order
c) a property adjustment order.
Can be deferred or conditional
Can contain consequential provisions
Can be ordered even if owned with third party.
Pension Sharing Orders
Off-setting - to allocate one party a greater proportion of the matrimonial assets to compensate for their lack of pension or loss of benefit.
Pension attachment Orders – requiring payments made under the pension to be paid to the spouse.
Pension sharing Order – requiring the pension scheme to transfer a share of the member’s pension to into the other spouse’s pension scheme.
How does the Court
decide?First consideration to be given to welfare of
any children of the family.
Must have regard to all the circumstances of
the case.
Must consider the S25 MCA Factors: -
S25 Factors a) financial resources
b) financial needs
c) standard of living
d) age of parties and duration of marriage
e) any physical or mental disability
f) contributions
g) conduct
h) loss of benefit
Miller and McFarlane Needs – ‘In most cases the search for fairness largely begins and ends at this stage. In most cases the available assets are insufficient to provide adequately for the needs of two homes’
Compensation – ‘This is aimed at redressing any significant prospective economic disparity between the parties arising from the way they conducted their marriage’
Sharing – ‘The parties commit themselves to sharing their lives. They live and work together. When their partnership ends each is entitled to an equal share of the assets of the partnership, unless there is a good reason to the contrary. Fairness requires no less’
Generally...
Three stages:
Capital split
Income orders
Pension order
How to get the order you
want?Top Tips: -
Be realistic
Know what you want to achieve
Deal in needs, rather than percentages
Consider all your options
Don’t let the Judge decide
Pre-Nuptial Agreement
Bolt Burdon Solicitors Please contact us with enquiries:
Darrell Webb – Family Department
T: 020 7288 4795