Recent News Articles

For further help or information regarding the articles below, please contact Elizabeth Hodder at eah@gross.REMOVE-THIS-BARRIER-BEFORE-SENDING.co.uk or Julie McDonald at jm@gross.REMOVE-THIS-BARRIER-BEFORE-SENDING.co.uk

MAINTENANCE AFTER DIVORCE – HOW MUCH AND FOR HOW LONG?

Nothing in family law is guaranteed; there is no cast-iron certainty, no failsafe system of predicting or planning for a particular outcome to a client's case. I attended a course recently, at which two top Queen's Counsel argued a fictional case; one for the husband, and the other for the wife. Two senior Judges listened to the QC's speeches. The Judges each then gave their Judgments, based on what they had heard. One Judge found in favour of the wife, the other, for the husband. They had both heard exactly the same facts, yet they came to totally different decisions. This is what I have to deal with every day in my practice - uncertainty of outcome.

Since 1984, Judges have a duty to consider severing all financial ties between husband/wife after a divorce. The concept of maintenance 'for life' was up until that point, commonplace. Post 1984, Judges have to consider '...whether it would be appropriate to require payments to be ...made only for such term as would in the opinion of the Court be sufficient to enable the party in whose favour the Order is made to adjust without undue hardship to the termination of his/her financial dependence on the other party.' Note the wording of this clause refers to undue hardship. Thus, the party receiving the maintenance could suffer some 'hardship' as long as it was not 'undue hardship'.

Many people believe that post-divorce that there is an obligation to ensure that both parties enjoy the same level of income. Many people perceive that if one party in the marriage has worked part-time, to fit in around children's schooling for example, that this status quo should invariably continue when the children have ceased school, and are no longer dependent. There is also a perception that if one party cohabits with a new partner, the maintenance liability of the other ex-spouse will automatically terminate. These are all common misconceptions, or traps for the unwary.

The ability to become self-sufficient by exploiting an earning capacity which has lain dormant during the years of bringing up a young family, and re-training for new job skills are issues which I discuss with my clients at an early point in any financial application during divorce proceedings. These are significant factors which may sway a Judge to set a limit upon the number of years for which maintenance should be paid.

The significance of a cohabitee is not the automatic end to a maintenance obligation, which most think that it is. It is just one of a number of issues a Judge will consider.

This means that in every case, the unique facts particular to that couple are what will decide a case, one way or the other. Thus, it is not possible to predict with certainty what a Judge on any given day will determine is fair in all the circumstances. The answer is surely clear – don’t take a gamble on what the Judge may or may not decide. Use Collaborative Law for a tailor-made solution which suits your circumstances, and long-term goals.

Elizabeth Hodder eah@gross.REMOVE-THIS-BARRIER-BEFORE-SENDING.co.uk

WHAT IS PENSION SHARING?

Pension sharing is a means of balancing up pension assets between a husband and wife who are in the process of divorcing. So for example, if the husband has a pension valued at £75,000, and the wife’s pension is valued at £25,000. The combined pension value is £100,000. If theirs is what the Courts call ‘a long marriage’, those pension funds may have to be shared equally between the parties. This means the wife might receive a pension sharing order worth £25,000 from the husband’s pension provider.

In reality, no cash changes hands. Money moves on paper from the husband’s pension provider, to the wife’s chosen pension provider. The wife’s fund is then worth £50,000. She can leave her pension fund under the terms of her Will since it is, by then, her own money.

Do courts always make a pension sharing order? No, not if the husband and wife don’t want one. The wife (in this example) could trade £’s in a pension fund against cash £’s in the equity of a property. Thus you can get a party to a marriage saying ‘I won’t touch your pension if you give me a bigger slice of the sale proceeds of the house’. This is what Solicitors call offsetting.

Elizabeth Hodder eah@gross.REMOVE-THIS-BARRIER-BEFORE-SENDING.co.uk

MARITAL AGREEMENTS - HAVE WE MISSED THE BOAT?

Until recently, pre-marital agreements were not legally enforceable in England and Wales. However, now the Courts have agreed that such agreements should be upheld if the parties separate or divorce, some couples may feel they have missed the boat.

Not so! It is possible to enter into a post-marital agreement. The difference is that the agreement is made after the wedding, rather then before. As with pre-marital agreements, both parties must be frank with each other about their financial circumstances. In addition, there must be a reasonable provision in the agreement for the financially weaker party (if there is one).

It is essential for both parties to seek legal advice before proceeding with a post-marital [or “post nuptial”] agreement. The Collaborative Law process provides an open, amicable way to discuss the wishes and objectives of both parties, face to face, with their respective solicitors.

Post-marital agreements should allow for potential changes in circumstances, and it is always advisable to regularly provide for its review when, for example a child is born into the marriage.

Julie McDonald jm@gross.REMOVE-THIS-BARRIER-BEFORE-SENDING.co.uk

WHERE WILL CHILDREN SPEND THEIR HOLIDAYS?

At this time of year, the family department at Gross & Co receive numerous enquires from separated parents about “which parent should have the children over the Christmas holidays?” Both parents would like the children to wake up on Christmas morning in their home, and to enjoy the magic of Christmas Day with them. That is only natural after all. So how should separated parents decide who sees the children when and how during holiday periods?

There are no hard and fast rules; if at all possible, parents should agree between themselves how the holidays are to be shared, and they should start planning for the holiday season early. Failing to tackle this problem early (and October is not too early to start), can lead to the all too common battles in Court on Christmas Eve. County Court Judges in December spend a vast amount of their time deciding contact disputes between parents who can’t agree on how their children shall spend 48 hours in one month of the year. Christmas is expensive enough for parents - avoid litigating about the children at all costs!

If the parents cannot agree, the matter can be decided by the Court, when one parent makes an application for a Specific Issue Order. The Court will decide on what contact arrangements will prevail on Christmas Eve and Christmas Day.

The interests of the children are the paramount consideration. In most cases, Courts consider that the children should spend Christmas Eve and sometimes Christmas Day, with one parent in year one, and the same arrangement for the other parent, in year two. Many children are very fortunate to enjoy two Christmas Day celebrations with their respective parents. What can be better than dividing the day equally between both parents? That is the ideal solution, but for families who live a great distance apart, it is not workable. To ensure that Christmas is a very peaceful and special time, spend December looking forward to Christmas contact arrangements with the children rather than spending time and money arguing it out in Court.

For further information, contact:
Julie McDonald
Partner and Collaborative Trained Lawyer
jm@gross.REMOVE-THIS-BARRIER-BEFORE-SENDING.co.uk

A few statistics for you; nearly one in two marriages end in divorce. Nearly 78% of couples who divorce, will remarry. In 1991, 41% of all marriages were second marriages. We like marriage. We like it so much, we often do it twice.

In the course of acting for a client going through a divorce, my client may exit the marriage with a house or houses, cash, or pension assets, or a combination of all three. My client may get a 50% share of the overall marital assets, and may consider that result fair in all the circumstances. So may it be. However, if my client then marries again, and that marriage also ends in divorce, is it then right and fair that my client’s assets are divided up again, and possibly split 50/50 with the new spouse?

So why prevention is better than cure? Well, if my client had drawn up a premarital agreement with his/her new partner, the couple could have reached an agreement over what should happen in the event the second marriage did not last. This can, for example, ring-fence the pre-acquired assets from the first marriage. The agreement might provide that the assets from the prior marriage would remain where they were, and any assets acquired by the couple through their joint efforts after the marriage, were to be shared equally, if the marriage did not last. It can protect both parties, as both may be bringing assets into the second marriage.

Pre-marital agreements are also ideal when there is a family business, which has been owned and run by family members for many years. The last thing the family will want is a situation where part of the business has to be sold off as part of a divorce settlement, or even more disastrously, part of the business has to be transferred to a non-family member, as part and parcel of an overall division of marital assets.

If one party to the marriage is a farmer, whose family have passed down land through the generations, protecting the land for future generations is vital. It can be done, with a bit of forward planning, careful legal advice, and a pre-marital agreement.

You may ask if a pre-martial agreement is legally enforceable and 100% water-tight. That has been a moot point for many years. In late 2008 the legal position became much clearer. Now, providing both parties are frank with each about their financial position, providing each party had equal bargaining power, and there is reasonable provision made for the financially weaker party (if there is one), then a divorce Court will uphold the terms of a pre-marital agreement. Reviewing the terms of the agreement when, for example a child is born in to the marriage, is also advisable, to ensure a Court is convinced of the overall fairness of the document.

Hard bargaining tactics simply aren’t appropriate in pre-marital agreement negotiations, of course. A pre-martial agreement is best discussed in the Collaborative Law process, where both parties sit down face to face, with their respective Solicitors, and discuss their wishes and objectives openly, and amicably. Pre-marital agreements and the Collaborative process are a match made in Heaven.

Prevention is always better, and far, far cheaper, than cure.

For further information, contact:
Elizabeth Hodder
Partner and Collaborative Trained Lawyer
eah@gross.REMOVE-THIS-BARRIER-BEFORE-SENDING.co.uk

What is Collaborative Law?

The traditional method of resolving issues between couples who are divorcing, usually involves going through Court proceedings. For some couples, this can seem very slow. For other couples, it can seem all too quick. Collaborative law enables the couple themselves to determine how fast or how slowly they want to resolve their own individual issues.

The Collaborative Law process involves a couple and their Solicitors negotiating face-to-face, rather than through correspondence and Court proceedings. At the beginning of the process, both parties sign an Agreement which sets out the ground rules. The parties agree not to start proceedings, but to negotiate fairly, constructively and openly, face-to-face. Both Solicitors and clients have a series of four-way meetings, at which the issues to be resolved are identified, and then resolved by agreement. The aim of the process is to ensure the parties set their own agenda, and set the pace at which the issues are talked through.

To collaborate means to work in partnership, to act as a team and to cooperate with each other. The collaborative process therefore can only work with couples who wish to and can work as a team. It is a particularly effective process for couples with children, as in those cases, the couples' relationship will last for their lifetime. Working out an agreed resolution of issues relating to the children of the relationship, at the point of separation, can form a solid basis for a couple's future relationship.

The collaborative process is not for every couple; it is also not just for couples who wish to divorce. Unmarried couples who separate, and who have children of their relationship, may have issues regarding the children's welfare and upbringing which they cannot resolve between them. The collaborative process will enable those differences to be aired and resolved constructively and cost-effectively.

A couple soon to marry who wish to have a Pre-Marital Agreement drawn up, are more than able to sit around a table and discuss matters face to face they would like to include in a Pre-Marital Agreement.

The number of four-way meetings in the collaborative process is governed by the parties themselves. The more complex the issues, the more meetings may be involved. One of the key benefits is that the decisions that are made at the end of the process, are decisions that are made by the couple themselves and not by a Judge who has never met the couple before, and will never see them again.

For further information, contact Elizabeth Hodder (eah@gross.co.uk) Collaborative trained lawyer.

CHILDREN - Who Decides?

What happens when parents cannot agree on an important step in a child's upbringing or welfare? For example:

None of these decisions can be made by one parent acting alone; the other parent with parental responsibility for the child, must give their consent. If the parents cannot agree, the Court must decide by making a Specific Issue Order, in the course of proceedings brought under the Children Act 1989.

If one parent has threatened to make a unilateral decision e.g. to take the child on holiday, the other parent can apply to the Court for a Prohibited Steps Order, which will stop the holiday (for example) unless and until the Court approves it, having heard evidence from the parties as to the pros and cons.

When a Judge is asked to make a Specific Issue Order or a Prohibited Steps Order, the welfare of the child is the Court's paramount consideration and the Court will take into account the ascertainable wishes and feelings of the child concerned, as well as all other relevant factors known to the parties. There is a great deal of case law which provides guidance to Judges in these circumstances. Each case is decided on the individual circumstances of the particular child.

Will I Keep my Pension on Divorce

When I see a new client who has just separated from their spouse, this is one of many questions I am asked. Other common questions are (for example), "I paid all the deposit to buy our house, will I get that back?", "my parents loaned us £10,000 to pay off our mortgage when we got married, will my spouse have to pay half of that back to them?", "I was due to retire next year, but if my spouse takes half my pension how can I afford to pay my outgoings and still have enough to live on?".

Divorce/separation is one of the most stressful events we can experience; it ranks amongst stressors such as the loss of one's job, and even family bereavement. Much of the stress comes from uncertainty both parties face once they separate their lives physically, emotionally, and of course, financially. Both parties will have many questions, to which they quite naturally want black and white answers. At an initial interview with a Solicitor who specialises in this area of law, it is almost always impossible to provide concrete answers to all the client's questions. This article will endeavour to explain why that is.

Solicitors advise on likely outcomes, based upon the facts of the client's case, and the criteria which a Judge would apply to those facts. The criteria a Judge will apply are set out in s 25 of the Matrimonial Causes Act 1973. They are:

  1. The income, earning capacity, property and other financial resources which each party has or is likely to have in the foreseeable future including, in the case of earning capacity, any increase in that capacity which it would be, in the opinion of the Court, reasonable to expect a person to take steps to acquire.
  2. The financial needs, obligations and responsibilities which each party has or is likely to have in the foreseeable future.
  3. The standard of living enjoyed by the family before the breakdown of the marriage.
  4. The ages of each party and the duration of the marriage.
  5. Any physical or mental disability.
  6. The contributions which each party has made or is likely to make in the foreseeable future to the welfare of the family, including any contribution by looking after the home or caring for the family.
  7. The conduct of each party, if that conduct is such that it would in the opinion of the Court be inequitable to disregard.
  8. The value to each party of any benefit which one party because of the divorce will lose the chance of acquiring (most usually pension provision).

A new client will be asked by their Solicitor to provide a great deal of financial information about themselves. Earnings (both past and present); non-financial contributions to the family unit (like looking after children/the home); the values of pension/s; contributions to the family 'pot' which were not earned by either party (inheritances under a family member's estate e.g.); future expectations (pay increases/new jobs with fringe benefits like cars or private healthcare) - all of these can provide valuable information for the Solicitor to begin working out how the parties' financial affairs can fairly be unravelled and (if need be), how family assets should be re-assigned.

Both spouses will have to provide the same financial information, to their own Solicitors, so there is a level playing field. The Solicitors for each party exchange that information, and each side can then ask questions of the other, to clarify issues or fill any gaps in information. The Solicitors will then apply the s25 criteria a) - h) to both sides' information, and try and work out a fair and equitable outcome for their own client.

Take for example a wife who gave up her career to raise children, and provide the husband the opportunity to work full-time and develop his career. When the wife's role as mother and home-maker comes to an end (when the children leave school), her ability to earn a substantial income is greatly diminished. The husband may by then be at the peak of his earning capacity. If the parties separate at this point, both parties' earning capacity must be looked at, with a view to re-distributing income to compensate the wife for her role over many years as home-maker.

In another case, the husband may farm land which has been passed down through his family for generations. The husband has made a contribution to the family 'pot' (the family farm) which should not be overlooked. Would it be right for those farming assets to be put into the 'pot' and divided up equally between the parties? Is the farm a matrimonial asset, or should it be treated differently, given the parties to the marriage did not acquire that asset through their own joint efforts?

Working out how a Court might divide up family assets is not a precise science. Judges have discretion, and how one Judge might approach a given set of facts, can differ to how another Judge would do so. You can see from the examples above, that fairness or sharing of assets, may require that one party or another to give up assets, or a claim to assets, in order to achieve an overall fair outcome.

It is only when all the relevant facts about a case are known, that a Solicitor can (with any degree of certainty), advise clients properly on a likely outcome to their case, based on the current law and the statutory checklist.

If both parties give a full and frank account of their financial positions, the Solicitors will be in the same position of a Judge who is asked to judicially determine a case. At an initial interview with a new client about whom the Solicitor knows very little, it is therefore virtually impossible to answer the question "Will I keep my pension?" with accuracy.

Be wary of genuinely well -meaning advice from friends or colleagues who have been through a separation/divorce themselves. Their financial and personal circumstances are unlikely to be exactly the same as yours. How the s25 checklist applied to them, was based on their individual facts and figures, not yours. What is the right outcome for you, is not necessarily what was the right outcome for them.

An initial interview with a Solicitor about the financial implications of a separation/divorce, is the first step towards achieving the right outcome for your circumstances. There are no instant answers, or at least, none which should be relied upon.

Tips for the first meeting with your Solicitor.

This will help your Solicitor to give you basic initial advice on where you stand, and how a Court might treat the different assets in your case.

DIVORCE DIY - SOS

Some people DIY because they enjoy it: most do it to save money. DIY in the home has always been popular, but never more so than when times are tough. As recession bites, some clients may look to online DIY packages which offer "divorce kits from £65!". Now, we all know we get what we pay for. No one can be under any illusion that a DIY divorce for £65 is not going to be all that it seems. What many people do find is that they get considerably more than they bargain for. Unfortunately, most of the hidden extras are unwanted problems, which can prove very costly to repair.

Many spouses in a DIY divorce rush through the proceedings to get their Decree Absolute, believing that it will end any financial claims by being brought by their spouse in the future. They think of the Decree Absolute as a 'clean break'. It isn't. A Decree Absolute alone won't prevent one, or both spouses from pursuing financial claims, sometimes several years later. This is by far the most common mistake I see when I am dealing with a client who has chosen the DIY route to end their marriage.

Capital Gains Tax is another trap for the unwary. Transfers of property or assets between married couples are exempt from Capital Gains Tax (CGT). Transfers between unconnected persons, eg ex-spouses, will attract CGT. A Decree Absolute cannot be undone. Once it is made, there is no going back, and the CGT implications of rushing to get a Decree Absolute can be very costly. CGT can be attracted by the transfer of an interest in a house, shares, or an endowment policy, and thus CGT can affect a very significant number of couples who own such assets in their joint names.

Some of the most troublesome problems I deal with arise when I am instructed to pick up where the ex-spouses left off at the end of a DIY divorce. Some of the loose ends can be tied off, but in most cases I have dealt with, the loose ends have to be bought off. It is never a pleasant prospect for a client to be told that a door which was thought to be firmly shut several years earlier can be pushed and then wedged open, to their cost.

If the marital home is sold, with the sale proceeds divided up by agreement between the divorcing couple, and all bank balances cleared, is this a clean break? No. The couples' financial ties have not been severed, just because they have reached an agreement between themselves. Even if both parties buy new properties in their own names, the loose ends can still become 'live' wires.

Everyone is in the same boat at the moment, seeking to cut unnecessary expenditure. DIY divorce is something to be treated with extreme caution. If the shelves you put up on Sunday afternoon collapse, there is a limit to how much damage that can cause. The financial mishaps from a DIY divorce can have far wider and far more costly repercussions.

CHILD MAINTENANCE AND UNEMPLOYMENT

When parents divorce, the parent with whom the child/children resides can ask the non-resident parent to pay maintenance for the children, in a number of ways: payments can be made voluntarily; the CSA can be asked to assess the non-resident parent; or an agreement can be incorporated in a Consent Order between the parties. With unemployment rising, incorporating maintenance payments for children in a Consent Order may no longer be the best option.

If child maintenance is included in an Order, neither the payer nor the payee can apply to the CSA to take over or review the maintenance payments for 12 months following the date of the Order itself. So, what happens if the payer is made redundant or takes a pay cut? If payments are not made, the Order is breached, and the payee can apply to the Court to enforce the Order. The Court will undoubtedly vary the Order to take account of the redundancy or pay cut. However, getting there can be an expensive option for both the payer, and the payee. There is a Court fee to pay, Court forms to complete, and the process is not straightforward. Involving a Solicitor on either side will be costly.

It may not now be advisable not to include maintenance for children in an Order, but simply to take voluntary payments and if need be, apply to the CSA if the voluntary payments are not maintained.

COMMON MYTHS

I am a common law husband/wife :-

If you are, I would like to meet you as you are rarer than a unicorn.

Divorce after two years' separation is automatic:-

Wrong. The procedure for obtaining a divorce on the basis of two years' separation is exactly the same procedure followed when obtaining a divorce based on adultery, unreasonable behaviour, desertion or five years' separation.

We are divorced so there is a clean break between us:--

Wrong again. A divorce ends the marriage. It does not sever the financial ties that the law gave to both parties to the marriage. To sever those ties and obtain the all important clean break order requires further action, documents and the payment of a further Court fee. If all the parties do is become divorced, they are storing up big financial problems for themselves for the future.

WHEN NO DOESN'T MEAN NO

More and more houses come on to the market for sale, following the divorce of the owners. In the vast majority of cases, the sale comes about following an Order made in a divorce County Court, either by consent or following a contested hearing.

The Order will stipulate amongst other things:-

Both the ex-husband and the ex-wife have to agree upon any offers made to buy the property, and this is all too often the most common cause for the breakdown of the sale process. If a non resident ex-spouse wants to sell and accepts a buyer's offer, the resident ex-spouse who is not keen to sell can potentially put a spanner in the works by simply saying "no".

The matter does not need to end here. The non resident ex-spouse can apply to the Court for judicial assistance. If the Court considers that the resident ex-spouse is unreasonably refusing an offer which in the opinion of the estate agent marketing the property, is a reasonable one, the Court can, and will, break the stalemate. In that event, the Court can give the conduct of the sale to the non resident ex-spouse, so that he or she can accept any reasonable offer, without the say so of the recalcitrant, resident ex-spouse. In the cases of severe non co-operation, the Court has quite draconian powers. If the non co-operative party will not sign the necessary documents to transfer their interest in the property to a buyer, the Court will sign the papers for him or her. Thus, the co-operation of the resident spouse is bypassed, and the sale proceeds without hindrances. The ex-spouse who has to ask for the Court's assistance on these matters, is entitled to ask the Court for an Order for costs. Unless there are very good reasons for making a contrary Order, it is usual that the non co-operative party ends up footing the bill for the results of their non co-operation. Whatever spanner an ex-spouse can think of to jam into the works in these cases, there is invariably a judicial remedy for it. Once an Order has been made, the Court will ensure that its Orders are followed. A proactive approach by the solicitor acting for the non resident ex-spouse in these circumstances can prevent many months of unnecessary stress and heartache for both parties.

CGT TAX AVOIDANCE

Transfers of assets between spouses, do not attract Capital Gains Tax. Where there is mutual goodwill, and it is clear that a separation/divorce is on the cards, parties can plan for the transfer of assets between them, in a manner intended to avoid paying unnecessary CGT.

This requires much forward planning, but more than anything else, a good deal of goodwill and trust. If the wife owns an investment property in her sole name, when the property is sold, she can claim her annual personal relief against any gain made on sale. If the property were in the joint names of husband and wife, when the property is sold, they can each claim a personal relief.

If one spouse moves out of the matrimonial home for a period of 12 months or more, Principal Private Residence Relief is lost to that party.

This can be avoided by claiming under the Revenue's special concession D6, which allows the former matrimonial home to be treated as the principal private residence (and thus exempt of CGT) providing the transfer of the property is undertaken as:

The transfer of the matrimonial home should then be undertaken under the auspices of an Order, before the Decree Absolute of divorce/dissolution of civil partnership, has been pronounced.

It is not possible to undertake efficient tax planning in every divorce or dissolution of civil partnership. However, in cases where there is goodwill - and time - much can be achieved.

CHILDREN'S WISHES

The Children Act 1989 contains a welfare checklist. This is a list of factors that the Court (and other parties) must take into account when making a decision about the welfare of any child involved in any application to the Court. It is no accident that at number one the checklist says that the Court shall have regard in particular to "the ascertainable wishes and feelings of the child concerned".

It is a common misconception that when a child reaches a given age, that he/she can express a binding view about, for example, which parent the child wishes to live with. There is no set age at which a child can simply tell the Court (and the parents) where the child will live in the future. Depending upon the maturity of the particular child, the child's ascertainable wishes can carry a lot of weight. However, children do sometimes express wishes to do a particular thing, which are based upon a whole range of factors, and not necessarily, what is in that particular child's interest. Many children say that they do not want to go to school; if parents and Courts followed the child's wishes in those circumstances, many of our schools would be poorly attended.

The Court must balance a number of factors when making a decision about where a child will live, following a relationship breakdown. The more mature the child and the more clearly expressed the child's wishes, the more weight those wishes will carry. Each case in Children Act proceedings is judged on its own particular circumstances, and like children themselves, no two cases are identical.

IT'S GOOD TO TALK, BUT...

It is becoming more and more common for married couples who wish to separate, to work out a financial agreement between them, before they take legal advice upon the implications of that agreement.

One spouse then approaches a Solicitor to commence divorce proceedings and draw up a document setting out, in legally binding terms, the agreement that the parties have reached. In theory, this seems an ideal solution. Lengthy delays are avoided, there is no bitterness or dissent, and a considerable amount of money is saved by each side in terms of legal fees. However, nothing in life is ever as simple as this.

When Solicitors act for the parties to a divorce, each client will be advised that their spouse should give full and frank disclosure of their financial circumstances and future marital intentions. Without both parties laying all their financial cards on the table in this way, it is impossible to advise a client on what a suitable outcome for their particular circumstances should be. It is like asking a doctor to diagnose an ailment over the telephone, telling the doctor that one of your symptoms is a high temperature. Without physically examining you, running diagnostic tests and asking you a series of questions about your general medical history, the doctor's chance of getting the diagnosis of your condition right, is slim. The ailment may be treated with the wrong medicine which can lead to further problems. This could be avoided if the doctor were allowed to carry out a full examination of the patient and get the diagnosis right first time around.

If a client has reached an agreement with their spouse, and they wish that agreement implemented, we can give appropriate advice both on how that can be done and the pros and cons of so doing. However, we can only do so when we have a full picture of the parties' financial circumstances. Even in cases where a couple have been married for over 25 years, it is surprising how many financial surprises can come out of the closet when full and frank disclosure does take place. This is not to say that couples hide their financial circumstances from each other during the marriage. It is more often a case of parties not feeling the need to reveal all their financial details to each other when times are fine. When times are no longer fine, getting the full financial picture from each party is essential. Without a full picture, an inequitable settlement may be arrived at, or a settlement which is inherently unworkable, for one reason or another.

Asking for full and frank disclosure is not a hostile step. It is simply following a procedure the law provides for. It is also a prudent step for anyone going through divorce to take, to ensure that they achieve a fair and appropriate outcome to the case. How will you know if the settlement is fair, if you don't know the true extent of the matrimonial pot?

Most clients will only ever go through divorce once. The financial outcome of the divorce can affect both parties' future significantly. It is vital therefore that the outcome is fair, but also the right one for the client's particular circumstances. Each case is after all, unique on its own facts, just as every client is unique.

MARRIED OR UNMARRIED

WHAT HAPPENS TO THE HOUSE WHEN YOUR RELATIONSHIP ENDS?

Alan and Elaine have lived together since they married ten years ago. Alan is the sole owner of their three bedroom house, which is now mortgage free due to the success of Alan's computer software business.

Their friends, Helen and Karl have also lived together for ten years, but are not married. They also live in a three bedroom house, which is in Helen's sole name. She inherited it from her grandmother when she was eighteen, and it is also mortgage free.

The only difference between the two couples is that one is married, the other is not.

Alan is having an affair with Helen, and it is likely that the couples will separate. As Alan and Helen are the sole owners of their respective houses, will they each keep their houses, and will Karl and Elaine each get a share?

If Alan and Elaine decide to divorce, the Court would treat Alan's house as a matrimonial asset regardless of who owns it. All Alan and Elaine's assets would be put into the matrimonial pot and would form part of the overall financial settlement.

In contrast, if Helen and Karl go their separate ways, the Court would not have the power to grant Karl a share in the house, unless Helen and Karl intended that he would have a share, and Karl acted to his detriment in reliance upon that intention/ agreement.

The law governing unmarried couples and distribution of assets when a relationship breaks down is likely to change in the foreseeable future.

THE BANKRUPT EX-SPOUSE

If during the course of divorce proceedings, you obtain a Consent Order from the Court transferring your spouse's interest in the former matrimonial home to you, you would think that your home is safe if he or she later becomes bankrupt. Not necessarily!

If your ex-spouse becomes bankrupt after the date of the Consent Order, but before the date of Decree Absolute, any Order to pay you a lump sum or to transfer property to you will become void. Your ex-spouse's interest in the property then automatically vests in the Trustee in Bankruptcy. If this involves an interest in the family home, the property may even have to be sold.

In addition, if your ex-spouse is declared bankrupt within 5 years of the date of the Consent Order, the Trustee in Bankruptcy can seek to claw back some of your ex-spouse's debts from assets transferred to you, including your home.

Is there anything you can do to protect yourself from such claims by the Trustee in Bankruptcy? Possibly.

When drafting a Consent Order, your solicitor can insert a clause requiring your spouse to give an undertaking to the Court to provide a Declaration of Solvency. A Declaration of Solvency is a statement by your spouse stating that he or she is not at risk of becoming bankrupt in the near future.

A Declaration of Solvency is not an absolute shield against claims from the Trustee in Bankruptcy. However, it can be a valuable defence.

WHAT IS PARENTAL RESPONSIBILITY?

Parental responsibility means the rights, duties, powers, responsibilities and authority which by law a parent of a child has in relation to the child and the child's property. A parent is responsible for making all the important decisions in a child's life, such as where a child goes to school, and in relation to religion and medical care, as well as day-to-day decisions.

Who has parental responsibility? Married parents have joint parental responsibility. If the parents are not married, only the mother has parental responsibility. The unmarried father can acquire parental responsibility in one of six ways:

If the child lives primarily with one parent, parental responsibility is unaffected. The resident parent may make day-to-day decisions in relation to the child without consulting the non-resident parent. However, if any important decisions need to be taken, the non-resident parent must be consulted. The main areas of disagreement between parents are changing the child's surname, permanently removing the child from the country and deciding where a child goes to school, medical treatment and religious upbringing.

If parents cannot agree on any of these issues, or one parent intends to or has made a major decision without consulting the other parent, an application must be made to the Court to resolve the issue. This is called a specific issue order. The Court will make a decision on the issue, on the basis of what is in the child's best interest.

At Gross & Co, we aim to help parents resolve such issues quickly, and hopefully without the need to apply to Court.

In the next issue we will explain the criteria the Court will look at when deciding whether an unmarried father should be given parental responsibility for his child.