In a Divorce Do You Keep Property You Owned Before Marriage?
The ONS figures reveal that the average age at marriage for men is around 38 years and 35 years for women. These statistics continue the rise in the average age of marriage since the 1970s. Marriage in the under the 20s has fallen whilst marriage for the over 65s has risen sharply.
With those figures, it isn’t surprising that family lawyers are increasingly finding that arguments in divorce financial settlements centre on whether a husband or wife should keep their property owned before marriage in the divorce financial settlement or if the assets should be shared.
In this article, family law solicitor, Robin Charrot, discusses how the divorce court treats pre-marriage assets.
For expert divorce and family lawyers call our team of specialist divorce lawyers or complete our online enquiry form.
What is a pre-marriage asset?
A pre-marriage asset is anything owned by a husband or wife before their marriage. Whilst a couple could have bought an asset together, disputes in divorce financial settlement proceedings focus on assets bought by a husband or wife in their sole name before the date of their marriage.
A pre-marriage asset can be anything of value as family solicitors warn that it is not worth arguing over the relevance of pre-marriage owned assets if their value will be outweighed by the additional costs of a longer financial settlement court hearing or the investigative costs of tracing and valuing the asset.
Typically, pre-marriage asset disputes relate to:
Property – this could be a property bought by one party to the marriage that has become the family home or a buy-to-let property or second home
Family business – if a husband or wife set up a family business or inherited shares in the business before their marriage
Investments- this could be a share portfolio, cash savings, or cryptocurrency
Pension – the pension could be a final salary scheme pension that was started pre-marriage with a current or former employer, a private pension scheme, or a business-related pension scheme
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Do pre-marriage assets need to be disclosed in divorce financial settlement negotiations or court proceedings?
Pre-marriage assets need to be disclosed in divorce financial settlement negotiations and court proceedings. That’s the case whether you are engaged in:
Direct discussions
Family solicitor negotiations
Family mediation
Family arbitration
Divorce financial settlement court proceedings with an agreed financial consent order or where a financial court order is made after a contested hearing
The law says you need to provide full and frank financial disclosure of all your assets. If an asset was bought before your marriage, you should disclose it but you can argue that the value of the asset should be ignored when negotiating a divorce financial settlement or in contested financial court proceedings.
If you do not disclose the existence of a pre-marriage-owned asset and the court finds out about the asset the court can draw inferences about the honesty of the spouse who concealed the property. If the existence of the pre-marriage asset comes to light after a financial court order is made then your ex-husband or ex-wife could ask the court to reopen a financial court order made without disclosure of the asset, involving additional time and expense.
Do pre-marriage assets need to be valued in divorce financial settlement proceedings?
The court decides if assets need to be valued in divorce financial settlement court proceedings and will normally order a valuation by a jointly appointed independent expert. The fact that the court has ordered the valuation of a pre-marriage-owned asset doesn’t mean the court will decide that the value of the asset is taken into account when making a financial court order. The court often says it needs to know the total value of all assets owned before it can decide if pre-marriage assets are relevant or should be shared as part of the divorce financial settlement.
Are pre-marriage assets ignored if you sign a prenuptial agreement?
Divorce lawyers advise that the best way to protect pre-marriage-owned assets is to sign a prenuptial agreement to ringfence the assets. If you didn’t sign a prenup, then signing a postnuptial agreement is another option.
Prenuptial agreements can either be comprehensive in scope or the agreement can say that a particular asset should be ignored (or ring-fenced) in a divorce financial settlement. Whether the pre-marriage asset will be ignored depends on the circumstances in which the prenuptial agreement was signed and other factors. For example, was financial disclosure provided as part of the prenuptial agreement discussions, were you coerced into signing the agreement, did you both take independent legal advice, and was the agreement signed at least 28 days before the marriage?
If you meet all the tests for a prenuptial agreement to be found to be binding on both spouses, the pre-marriage asset can still be taken into account if a fair divorce financial settlement cannot be made without recourse to the property because the reasonable needs of the husband and wife can't be met without taking into account the value of the disputed asset.
Take the case of a 40-year-old man who owned property before his marriage. The property became the family home when he married and he subsequently had 3 children with his wife. The couple doesn’t have any other significant assets and if the value of the family home isn’t taken into account in the divorce financial settlement the wife will end up with very little and will be unable to rehouse herself and the children. The outcome might be very different in a short marriage without children and where the wife had a good income and mortgage capacity.
How does the court decide if pre-marriage-owned assets should be kept by the asset owner?
In divorce financial settlement proceedings, the court makes a financial court order after assessing a range of statutory factors (referred to by family law solicitors as the ‘’section 25 factors’’) and exercising discretion.
The court will ask itself a series of questions:
Is the asset a pre-marriage asset- there may be a dispute over the date of purchase or, if the couple were cohabiting at the time of purchase, it could be argued that the cohabitation (assuming the relationship moved seamlessly into marriage) means the asset wasn’t acquired ‘’pre-marriage’’
Is there a prenuptial agreement and does the agreement meet all the relevant tests, such as the agreement was freely entered into, without coercion?
What are the reasonable needs of any children and the husband and wife?
What factors are relevant to the pre-marriage assets? For example, the length of the marriage or the fact that the pre-marriage asset was used as the family home for years may make it less likely that the asset owner can argue that the value of their pre-marriage asset should be ignored
What are the family assets and can a fair and reasonable financial settlement be ordered without recourse to the pre-marriage-owned asset?
A family solicitor will ask the same sorts of questions to help you and your spouse reach a divorce financial settlement involving pre-marriage-owned assets to try to avoid a contested divorce financial settlement hearing.
For expert advice on divorce and family law call our team of specialist divorce lawyers or complete our online enquiry form.
Robin Charrot
Jan 20, 2023
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7 minute read
Divorce and Tax
When it comes to divorce you don’t immediately think of tax. After all it is reasonable to assume that separation and divorce should be one aspect of your life that is tax free. However, our Manchester divorce solicitors will tell you that divorce isn’t tax free. In this blog we look at divorce and tax.
Taxing divorce
When it comes to separation and divorce there are obvious and hidden tax consequences. For example:
Child support – the parent that pays child support for the children will pay the child support out of their net income and the parent who receives the child support won't pay income tax on the child support. It is important to factor in the net effect of child support payments when looking at issues such as mortgage capacity and affordability of mortgage payments or the likelihood of the court ordering spousal maintenance in addition to child support
Spousal maintenance – if the court orders that spousal maintenance is payable then the spouse paying the spousal maintenance will pay it out of their net income and the spouse receiving the money won't pay income tax on the spousal maintenance. If the receiving spouse did then it would be double taxation
Pensions - if a couple agree to the making of a pension sharing order then it is important to look at the tax consequences of taking the cash out of the pension fund, if that is the plan. If the tax effects of withdrawing the money from the pension aren’t considered then one or both spouses may end up with a far smaller financial settlement than envisaged or paying too much tax than they would have done if they had taken expert financial and pension advice
The family home – if the family home is going to be sold then it is important to factor in stamp duty costs on rehousing when looking at the housing needs of the husband and wife. If the family home is going to be retained in both spouses names until a future date then capital gains tax may be payable by one spouse when the property is eventually sold, for example, when the youngest child is age 18
The sale or transfer of assets – if assets such as shares in a family business or an investment portfolio are sold or transferred then capital gains tax may be payable. There is the potential to avoid payment of capital gains tax if the transfer of assets takes place in the tax year of separation. That is why it is best to take early specialist legal and financial advice if you are a business owner getting divorced or you have other assets that may be liable to capital gains tax on sale or transfer, such as a buy to let property portfolio
International tax- if a couple own property abroad, such as a second home, then there may be significant tax issues in the overseas country if the property is sold or transferred
Tax issues on divorce – if a spouse makes allegations in financial court proceedings that their husband or wife has not declared income for tax purposes (and there is evidence to support this) or evidence of other tax irregularities (such as a sham trust) a family judge can order disclosure of the judgement to HMRC.
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Divorce, tax and HMRC
It is accurate to say that some divorce and financial court proceedings can open up ‘’a can of worms’’ for a husband or wife when it comes to their tax affairs.
In a recent court case a judge said that the £12 million divorce financial court proceedings could potentially end up in a HMRC investigation, subject to the findings at the final hearing of the financial settlement case.
The case concerns a shipping business and a family home worth an estimated £4.5 million. The couple enjoyed a luxurious standard of living during their marriage but when the relationship broke down there was an acrimonious separation that led to financial court proceedings initiated by the wife.
A court of appeal judge, Lord Justice Males, warned that should the wife establish her case against the husband then both could both be implicated in a 'criminal conspiracy...to evade tax properly due' on their earnings. The judge’s comments were made when the court heard an appeal to reinstate a freezing order injunction to prevent the husband from disposing of assets that the wife says are family assets and the husband says aren’t beneficially owned by him. The husband disputes ownership or any wrongdoing asserting that the multi-million shipping fleet were legitimately and properly transferred and thus there was no tax evasion and the ships or their value can't form part of the financial settlement.
The court of appeal judge was clear that he made no findings but was equally transparent in saying that if a court at the final hearing of the financial settlement case concluded that the ships were not genuinely transferred to a third party this could potentially result in investigations by tax authorities.
Divorce, tax and legal advice
When it comes to divorce and tax, specialist Whitefield divorce solicitors work with expert accountants and financial advisors so that a divorcing husband and wife know where they stand both legally and financially and can make informed financial settlement decisions, understanding the tax implications of their divorce and financial settlement.
Our Manchester Divorce Solicitors
Whitefield, North Manchester and Holmes Chapel, Cheshire Evolve Family Law divorce experts cover all aspects of family law, divorce and financial settlements. To speak to a specialist Whitefield divorce solicitor call us or complete our online enquiry form. Appointments are available face to face, via video conferencing, Skype or by telephone appointment.
Robin Charrot
Jan 19, 2023
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5 minute read
How to Choose a Cheshire Child Contact Solicitor
Let’s face it, when it comes to choosing a Cheshire child contact solicitor, it is hard to know where to start. There’s loads of choice and at Evolve Family Law we have never seen an advert from a child contact solicitor that doesn’t profess to be a child contact specialist or expert in the field of children law.
So, how do you choose a Cheshire child contact solicitor? At Evolve Family Law we have put together some tips to help you find the child contact solicitor who is right for you.
Tips on Choosing a Cheshire Child Contact Solicitor
Our top tips on choosing a Cheshire child contact solicitor:
Take time to see if you can work with the child contact solicitor
Every parent and every children law solicitor is different so it is important that you take the time to speak to your proposed solicitor to see if you can work with them. That doesn’t mean that you have to like your solicitor (although that does help) but you do need to respect their advice and judgement even if the advice isn’t always what you want to hear.
A good child contact solicitor will tell you that their job isn’t to tell you what you want to hear from them or to agree with you using the philosophy that ‘’the client is always right’’. The solicitor’s job is to ask hard questions and give you honest and robust advice so you don’t waste your time and money in child contact fights that you aren’t going to win. It is easier to take that advice on board if there is an element of trust with your solicitor and respect for their professionalism and advice.
Will the solicitor listen to you?
One of the biggest grounds for complaints about children law solicitors is that they don’t always take the time to listen to you and to your concerns as a parent. A good child contact solicitor will tell you that the ability to listen and pick up on the nuances is just as important as the ability to be an effective advocate at a children court hearing.
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Is the child contact solicitor an expert?
Solicitors tend to specialise in family law but within that field solicitors will go onto become experts in particular areas such as children law and parental alienation or child abduction or child relocation. If your solicitor is an expert in conveyancing, Wills and Lasting Powers of Attorney as well as child contact then they not have as much expertise as you first thought. An expert isn’t upset if you ask about their experience in your particular children law area of concern.
What do other people say about the child contact solicitor?
A recommendation to a Cheshire child contact solicitor by a friend or family member can be comforting and put you at your ease but you still need to do your homework to make sure that you can work with the child contact solicitor and that they specialise in the particular legal area that you need help with. After all the solicitor may have been brilliant with the negotiations for an international prenuptial agreement but do they have the expertise and experience to handle, for example, a former partner with a narcissistic personality disorder who is hell bent on making your life as miserable as possible?
Solicitors tend to rely on personal recommendations and they are always very grateful to receive them as there is nothing more powerful than the words of a client.
Here is what one children law client wrote about children law solicitor Louise Halford in June 2020:
‘’ The team at Evolve Family Law are the best. Louise Halford got me through a very difficult time with my family law matters finding a suitable arrangement in the children’s best interests. Louise Halford’s professionalism is a credit to her. But more importantly she showed empathy, patience and care delivered through friendly and honest advice. Louise Halford had my back from start to finish. I can't thank you enough…..thank you for being by my side.’’
Another children law client was more succinct in his praise of Louise Halford and said in June 2020:
‘’You are a star from heaven.’’
Is the solicitor upfront about costs, timescales and what to expect?
Going to court isn’t an easy option for most parents so it is best to find a Cheshire child contact solicitor who is clear about your alternative options, such as family mediation, and will talk you through what to expect in terms of costs, timescales and the court process. That way you can make an informed decision about whether a child arrangements order application or a prohibited steps order application is the best option for you and your family.
Read more about the ethos of the Cheshire child contact solicitors at Evolve Family Law.
Our Cheshire Child Contact Solicitors
If you need legal help with child contact or need representation in children law proceedings for a child arrangements order or other type of children law order then call Holmes Chapel based Evolve Cheshire children solicitorsor contact us online. Appointments are available in person, through video conferencing, Skype or by telephone.
Robin Charrot
Jan 16, 2023
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5 minute read
Do I Need A Cohabitation Agreement?
As specialist family law solicitors, we get to deal with the fallout when a cohabiting couple separates and can't reach an agreement over whether their family home should be sold, or how the equity should be split, or whether the house should be transferred to one of them.
Court proceedings over property ownership can be protracted and expensive as the court assesses property and trust rights. Potentially your family law solicitors have to go back years to gather evidence on who paid the deposit, mortgage, or contributed to the house renovation costs. This hassle and cost may be avoided if you sign a cohabitation agreement.
For help from expert family lawyers call our team of specialist family lawyers or complete our online enquiry form.
When do you need a cohabitation agreement?
Most people think you only need a cohabitation agreement if you are buying a family home with a partner. That’s not the case. You need a cohabitation agreement in a range of different circumstances, such as:
Buying a house in your sole name but your partner intends to live with you at your house
You own a house and your partner is moving in with you
You jointly own a house with your partner but your personal or financial circumstances are changing. For example, you have inherited some money and intend to pay the mortgage off with your inheritance
You are going to jointly buy a property with your partner and you are contributing different amounts of money towards the deposit, or one of you is getting money from family to pay the deposit, or one of you will be paying all or a larger percentage of the mortgage and household bills
There are many other reasons why a couple may need a cohabitation agreement. That is why, if you are thinking of buying a property or you have formed a new relationship, it is sensible to ask the question ‘do I need a cohabitation agreement?’ and to get the question answered by an expert family solicitor.
You may think that a family solicitor is trying to sell you something that you don’t really need as most people don’t realise (until it is too late) that if your partner moves into your house, they have a potential claim over the property under property or trust law even though their name is not on the title deeds. Equally, if you have been in an unmarried relationship for many years, you may have no rights to a share in the equity in your partner’s property because of the complexities of property and trust law.
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What goes into a cohabitation agreement?
A cohabitation agreement can be as broad or as detailed as you chose. If a partner is moving into your house your agreement could say that your partner will not have a beneficial interest in your property even if they contribute to the mortgage or renovation costs unless you sign another cohabitation agreement setting out their interest in your property. That type of cohabitation agreement minimises the risk of your partner claiming they have a beneficial interest in the property because you took money off them as rent and payment towards household bills but, after you split up, your ex alleges their monthly contribution paid towards the mortgage so they have a claim over the equity in the property.
If you are buying a property jointly with your unmarried partner then your cohabitation agreement could record the detail of who paid the deposit, how the mortgage payments will be split, and other details, so you avoid having to get information and paperwork many years later to prove you paid the majority of the deposit and mortgage or to try and prove that it was agreed that you would get 70% of the equity because it was your inheritance from your grandmother that enabled you to pay the deposit and stamp duty.
It pays for an expert family solicitor to talk to you about your options and to prepare a bespoke cohabitation agreement for you. Most people assume that a cohabitation agreement has to be a standard document but it can be created to meet your relationship and property needs and be as straightforward or as complicated as you want to make it.
Can a cohabitation agreement be changed?
Some couples are reluctant to sign a cohabitation agreement because they think that circumstances may change. For example, if your partner is moving into your house the initial intention may be that the house will remain yours but that may change over time if you want to renovate or extend the property. Alternatively, once your relationship is established you may want your partner to share the mortgage payments with you, whilst still wanting to protect the equity that you built up in the property before your partner moved in with you.
Cohabitation agreements can be changed as your relationship develops or circumstances change but it is essential to record your revised agreement in a new document. That’s because most cohabitation agreements say any verbal promises or assurances will not carry any weight and any changes to your original agreement must be in a deed. A signed agreement avoids expensive court proceedings over whether conversations occurred, whether you really intended to give your partner an increased beneficial or property interest, or whether your partner misinterpreted your conversation or twisted it to their advantage.
If I don’t sign a cohabitation agreement, is the jointly owned house half mine?
The house isn’t necessarily half yours if you don’t sign a cohabitation agreement. It all depends on how the house was legally purchased (was the family home bought as joint tenants or tenants in common) and what your intentions were. Not having a cohabitation agreement can result in expensive court proceedings if one partner decides they want to claim half the house when they didn’t pay half towards the deposit or if one partner wants more than half the equity in the family home because they paid for the extension or for the new bathroom. A cohabitation agreement will cover who gets what percentage of equity in the house if it has to be sold. A bespoke agreement can also cater for one partner paying for renovations or paying off the mortgage.
Key points on a cohabitation agreement
Even if a house, investment, or business asset is owned by one partner, the other party to the relationship can still make a property or financial claim based on verbal or written promises, trust, and property law. The cost, risks, and inherent uncertainty of court litigation can be avoided, or significantly reduced, by a cohabitation agreement.
For help from expert family lawyers call our team of specialist family lawyers or complete our online enquiry form.
Robin Charrot
Jan 12, 2023
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6 minute read
Travelling If Your Child Has a Different Surname
Every time you stand in a queue at the airport do you tense up, worried about whether you will be challenged by an official over your paperwork, luggage or children? It is a particular concern if your children’s surname is different to your own. For example, if your ex-partner registered the children using her surname or if you reverted to using your maiden name after your divorce.
In this article, our family law solicitors look at the issues that can arise when travelling with your children if their surname is different to yours.
For expert family law advice call our team of specialist family lawyers or complete our online enquiry form.
Why do issues arise when travelling with children whose surnames are different to yours?
You may think that an official is just being difficult but border officials, passport control, and airport and ferry staff are all trained to look out for children travelling with adults who do not share the surname of the children they are accompanying. It is a red flag for potential child abduction or child trafficking – although all you want to do is take your children to Spain for a much-earned break.
It is easy to get angry when you are questioned about your children, especially when you are already stressed out by airport delays or if your toddler is having a tantrum. When your child looks like the spitting image of you then it is hard to bite back on a cutting reply and easy to get into an argument that can unravel into your family not being able to travel.
As family law solicitors working with parents worried about potential child abduction and trying to recover abducted children from abroad, the careful approach taken by some UK and overseas border officials and travel staff is in many ways very welcome. However, family solicitors do share the frustration experienced by some UK families about the lack of consistent international rules on the paperwork needed to travel with a child either as a family, a single parent, a relative or a nanny. The difference in regulations between countries can catch out the unwary parent and ruin a planned trip.
It isn’t just single, separated or divorced parents who need to be careful. If you are a grandparent, whose surname is different to that of your grandchild, and you are taking your child abroad on holiday then you may encounter the same issues.
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A cautionary tale
For those who question if travelling with a child is an issue our family law solicitor, Louise Halford, has first-hand experience of the difficulties. She tried to help a dad take his daughter on holiday to South Africa. He had arrived at the airport check-in desk without appreciating that as he was flying to South Africa on his own with his daughter, he would need a legal affidavit as well as extra paperwork. She happened to be at the next check-in desk and offered to help with the legal document and his wife rushed down with extra paperwork to try and make sure that her daughter could go on the planned trip. Sadly, all their efforts didn’t work out as the family only had their daughter’s short-style birth certificate.
If an affidavit is needed so a child can go abroad with a parent then there must be enough time for all the paperwork to be obtained before the affidavit is sworn.
What paperwork is needed if you are travelling overseas and your children have a different surname?
The exact documents you need depend on the country you are travelling to. Whilst you may not be challenged to produce additional documents in the UK you may be asked for additional paperwork when you are trying to enter another country or leave it to return to the UK.
As a general rule, to safeguard yourself and in case of officials not taking your word about your relationship with your children, it is best to take birth certificates for yourself and the children, copies of any change of name deed and marriage certificate (for example, if you reverted to your maiden name after your divorce) and evidence that the child’s other parent agrees to the trip. If you couldn’t get the other parent’s written consent, and instead had to apply to the court to obtain a holiday order, then take the order with you. If the court has awarded you a child arrangement order it is sensible to take a copy of that order as well.
Do I need the other parent’s consent to take the children out of the UK?
If you are not travelling with your child’s other parent, you may need their written consent or a court order to legally take your child abroad.
Whether you need the other parent’s written agreement depends on if your child lives with you and if you have a child arrangement order that says you are the parent with care. If so, you don’t need written consent or a holiday court order provided your overseas holiday is for 28 days or less.
If you fall in the category of the child arrangement order covering your trip it is sensible to take the order with you. If you aren’t sure if your child arrangement order says your child lives with you ( the wording on court orders can be rather confusing) speak to a family law solicitor about whether you need written consent or a holiday order.
If you don’t have a child arrangement order, or the order just sets out the contact arrangements with your child, then you need written agreement from the other parent (or anyone else with parental responsibility) or a holiday court order.
From a family law solicitor’s perspective, parents should be prepared to answer questions when travelling overseas with their children, especially when the children have a different surname to you, and should check the:
The paperwork you need to take with you and
The rules in the country you are travelling to and the documents you may need there
For expert family law advice call our team of specialist family lawyers or complete our online enquiry form.
Louise Halford
Jan 04, 2023
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6 minute read
What is a Postnuptial Agreement?
You may have heard of prenuptial agreements but not everyone is aware that you can sign a document that is similar in nature to a prenuptial agreement but completed after your marriage. It is called a postnuptial agreement.
A postnuptial agreement is entered into by a couple who are married or in a civil partnership and who want to record how their assets will be shared (or a specific asset, such as the family farm or business, will be ringfenced) in the event of their separation or divorce.
In this article, family law solicitor, Robin Charrot, answers your questions on what a postnuptial agreement is and whether they work.
For expert advice on prenuptial and postnuptial agreements call our team of specialist divorce lawyers or complete our online enquiry form.
When do you get a postnuptial agreement?
A postnuptial agreement is not limited to those who ran out of time to negotiate and sign a prenuptial agreement before their marriage or civil partnership. You can sign a postnuptial agreement whether you have been married a day, a year, or 31 years. It is therefore never too late to get family law legal advice about a postnuptial agreement.
It is a common fallacy that your husband or wife will only ask about a postnuptial agreement if they believe the marriage is in trouble. That is not true. Many happily married couples ask about postnuptial agreements, often triggered by a friend’s highly acrimonious divorce and a desire to avoid that type of dispute or because a life event has made them appreciate that a postnuptial agreement is just like precautionary insurance; sensible planning and a useful document to have.
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Should I sign a postnuptial agreement?
There are many reasons why you may consider discussing a postnuptial agreement with your husband, wife, or civil partner. Their initial response may be bemusement as many assume that postnuptial agreements are only signed by Londoners or those who mix in ultra-high net worth international jet-setting circles. If you do not have a yacht or a holiday home in the Caribbean you may think that a postnuptial agreement is out of your league.
As specialist family law solicitors based in Cheshire and North Manchester, we have seen a rise in inquiries about postnuptial agreements from across the Northwest of England. They help protect family wealth and minimise the emotional and legal costs of sorting out a divorce financial settlement dispute at the time of a separation or divorce.
The rise in popularity of the postnuptial agreement is a natural progression from the increased take up of prenuptial agreements.
Triggers for considering a postnuptial agreement include:
An increase in marriages with non-British nationals and the acceptance of postnuptial agreements in some overseas countries as a usual step in marital planning
The number of couples getting married later in life and acknowledging the need to take ongoing sophisticated legal advice given the extent of their assets and their desire to protect some of their wealth for children from earlier relationships
Business owners wanting to protect business assets from the impact of a separation or divorce as without an agreement in place the court could be asked to order the sale of a business or shares
The trustees of a discretionary trust wanting to make capital or income distributions to a beneficiary of the trust fund and raising the advisability of a postnuptial agreement to protect trust distributions
The older generation who wants to start lifetime gifting to a son or daughter, having been advised of the inheritance tax advantages of estate planning by their private client lawyers or financial advisors, but who are wary of making substantial lifetime gifts unless they can be reasonably confident that their family money will not be given to their son in law or daughter in law in any divorce settlement
Couples who entered into a prenuptial agreement and a change in life circumstances results in a need to change the terms of their prenuptial agreement
Couples who contemplated divorce proceedings but decided to make a go of their marriage and, after having had some experience of the divorce financial settlement process, want to put a postnuptial agreement in place so that if they do end up splitting up there is less chance of costly and fraught divorce financial settlement court proceedings to split the assets
Relocation to the UK or to another country and given the difference in divorce laws a recognition of the benefits of a postnuptial agreement setting out the jurisdiction for any future divorce as well as the split of money and other assets
Divorce solicitors are confident that in the future prenuptial agreements and postnuptial agreements will be seen as an essential part of life planning, in much the same way as taking out life insurance, signing a Will, finalising a Lasting Power of Attorney, or carrying out a regular investment portfolio review with a financial advisor.
Thinking about a postnuptial agreement
If you are thinking about a postnuptial agreement, it is best to be aware that there must be:
An agreement with your husband or wife. There can be no element of duress or coercion
Disclosure of current relevant financial and other circumstances
Specialist legal advice taken by both husband and wife on their postnuptial agreement
If all those elements are properly ticked off and the agreement provides a fair split of the family assets the postnuptial agreement should be upheld by a divorce court in any subsequent divorce financial settlement proceedings.
Postnuptial agreements are individual to the couple and no agreement will be the same. That is why it is so important to get expert postnuptial agreement legal advice, whatever the reasons behind why you are contemplating a postnuptial agreement.
For expert advice on prenuptial and postnuptial agreements call our team of specialist divorce lawyers or complete our online enquiry form.
Robin Charrot
Dec 07, 2022
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5 minute read
Divorce and Inheritance
For many young couples it is a real struggle to get on the property ladder. The combination of rising house prices and stagnate salaries has made the ambition of property ownership an uphill battle for the majority of young married couples. However, many of their parents are sitting on wealth tied up in large family homes. At some distant point, there may be a large inheritance.
When you are getting divorced one of the stumbling blocks to reaching an agreed divorce financial settlement can be when either a husband or wife has received an inheritance or is likely to receive a substantial legacy in the future.
Family solicitor, Robin Charrot, looks at the topic of divorce and inheritance and offers advice on how the court sorts out divorce financial settlements involving inheritances.
For expert advice on divorce and family law call our team of specialist divorce lawyers or complete our online enquiry form.
Protecting inheritance from divorce
There are ways to protect an inheritance from divorce if you have not already received an inheritance. Examples include:
Signing a prenuptial agreement – a prenuptial agreement only works if you are engaged and have not yet got married
Signing a postnuptial agreement – the agreement can ringfence the inheritance or can be comprehensive and set out your agreed divorce financial settlement in the event of a separation. A postnuptial agreement only works if there are safeguards in place to protect both husband and wife, such as financial disclosure and the taking of independent legal advice
The creation of a discretionary trust – this is only effective if you have not yet received your inheritance and requires specialist private client and estate planning advice
Keeping an inheritance separate – if you have received an inheritance then one way of trying to keep it out of any future divorce financial settlement is to not share the money. This does not always work as it will depend on the extent of your other assets, the length of your marriage, and several other factors. Keeping the inheritance separate means retaining the money in a sole account and not putting it into a joint account or using it to pay off the mortgage on the family home or to invest in the family business. The court may decide to treat a non-shared inheritance as a non-marital asset. This means that the court will not share the inheritance as part of the divorce financial settlement unless it is necessary to do so because otherwise needs cannot be met
Family law solicitors recognise that keeping an inheritance separate may conflict with financial advice or tax advice. For example, financially it may be best to pay off the mortgage on the family home rather than keep your inheritance in an account or in investments in your sole name. Alternatively, from a tax point of view, it may be best to make use of your ISA allowance and the ISA allowance of your husband or wife. The legal and financial and tax advice is all correct but it looks at the issue from different angles. Professional help can then assist you to work out the option that best suits your needs and priorities.
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Inheritance and divorce financial settlement financial disclosure
In divorce financial settlement negotiations and court proceedings, there is often an assumption that inherited money or inheritance and trust prospects do not need to be disclosed to your spouse or to the court. They normally do as you are required to provide full and frank financial disclosure.
If you do not disclose an inheritance this can result in:
Your spouse is suspicious about other financial aspects, such as the value of the family business or the extent of your income, so it makes it less likely that you can reach an agreed divorce financial settlement
In divorce financial proceedings the court is asked to make inferences about your honesty and about whether you have other assets because you did not initially disclose the existence of an inheritance or a trust
If a financial court order is made and it subsequently comes to light that you received an inheritance or were a discretionary beneficiary of a trust your spouse can ask the court to review the order and make a new one based on the argument that the court would not have made the original order if you had disclosed the existence of the inheritance or the trust
Family solicitors recommend that if you have received an inheritance or if you are named in a Will or a trust you discuss your financial disclosure with a specialist divorce financial settlement solicitor before you start financial settlement negotiations, attend family mediation, or complete Form E financial disclosure as part of the divorce financial settlement court process.
Even if the advice is that you must disclose the inheritance you can still argue that the inheritance should not be considered in the divorce financial settlement. For example, because you have not received the legacy yet and the testator may change their Will or because although the inheritance has been received the inherited money did not become marital property because of the existence of a prenuptial agreement or as a result of the money being kept separate.
Many future inheritances can be safely ignored and will be disregarded by the court. For example, if you are getting divorced in your 20s and your parents have named you as a beneficiary of their Wills but they are in their 60s and fit and healthy. Why? Firstly, you may not inherit for another 30 or 40 years, and secondly, by the date of their death, they may have spent your legacy or decided to leave it to a charity. The situation may be different if you and your spouse are in your 60s and you are divorcing after 30 years of marriage and there is an imminent inheritance and not enough equity in the family home to rehouse you both or to meet your retirement needs. The inheritance could mean your spouse gets more of the equity or pension share than would have been the case if you were not due to imminently receive a substantial inheritance or had recently received it.
Divorce and inheritance can be a very emotional topic as invariably people want to protect an inheritance because of their strong belief that the inheritance was family money left to them and that their relative would not want their estate shared with their ex-husband or wife. Divorce financial settlement solicitors and estate planning lawyers can guide you and your family on your options.
For expert advice on divorce and family law call our team of specialist divorce lawyers or complete our online enquiry form.
Robin Charrot
Nov 23, 2022
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6 minute read
Disputes Over Your Child’s Schooling
When you are a separated or divorced parent it can be hard to reach an agreement over aspects of your child’s parenting. The importance of a child’s education can be a trigger point for family law disputes with each parent holding equally strong views about the schooling and education choices that are best for their child.
In this article, children law solicitor Louise Halford helps parents understand their options when there is a family law dispute over schooling.
For expert family and children law advice call our team of specialist divorce lawyers or complete our online enquiry form.
School-related family law disputes
Parents can get involved in a range of school-related children and family law disputes including:
Whether a child should be privately educated or state educated
The choice of private school – with disputes over whether a child should board or be a day pupil or the location of the school or its specialism in academic achievements or sports
The decision to home school
Entering a child for grammar school exams
Whether to request a special educational needs assessment or not
The decision to request a child attends a mainstream school or a specialist school
Attendance of both parents at school sports days or plays or other events
The release of information, such as school reports or attendance records, by the school to the parent who does not have daily care of the child
Contact arrangements and collection from or return to school
One parent taking the child on holiday during term time
Parental disagreement over use of school disciplines, such as school detention, suspension, or exclusion
Resolving school-related parent disputes
It is best to resolve school-related parent disputes as quickly as possible. Ways to achieve that include:
Solicitor negotiations
Roundtable meeting
Family mediation
If you cannot reach an agreement then either you or your ex-husband or wife can apply to the court for the court to decide on the issue in dispute. This is called an application for a specific issue order. Alternatively, you may need to apply for or respond to an application for a prohibited steps order or child arrangement order. During any children law proceedings, you will be encouraged to reach a resolution so you do not have to ask a judge to determine the school-related dispute at a contested final hearing.
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Court proceedings to determine school-related parental disputes
Whatever type of school-related parental dispute a judge is being asked to adjudicate on, the court must look at a range of factors, known as the ‘welfare checklist’ when making a decision. The key point is that the court must make a decision based on what it thinks is in the child’s best interests.
For example, you may want your child to be privately educated and you may have selected and reserved a place at the best private prep school with an excellent academic record. Your ex-spouse may believe that your child is too young to board or that your child is not sufficiently academic to thrive in your chosen prep school. You may attribute their objections to selfishness on their part or a desire to thwart your long-held ambitions for your son or daughter. A court will consider your child’s wishes and feelings after considering their age and level of understanding as well as their personality and both parents’ arguments. The fact that a child does not want to go to a new school does not mean that the court will not make a specific issue order as the court will look at what is in the child’s overall best interests.
The likelihood of succeeding in an application for a specific issue order in part depends on the homework you and your family lawyer do in preparation for the court case. For example, if there is a dispute over the choice of school, checking Ofsted reports can be helpful. If there is a dispute over whether home-schooling is in a child’s best interests a detailed statement covering why a parent is so committed to home education, their research on available local resources and support groups, the child’s experiences in previous schools, and how the parent can cover a range of lessons, and ensure the child also enjoys activities with friends of their own age such as drama and sport, can be very persuasive.
For expert family and children law advice call our team of specialist divorce lawyers or complete our online enquiry form.
Louise Halford
Nov 22, 2022
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4 minute read
Divorce and Cryptocurrency
There was a time when few of us had heard of digital assets and cryptocurrency but when you are separating in an age where almost everything is carried out electronically and online it is important that your divorce solicitors understand the range of assets that your husband, wife or civil partner may hold and how to trace them.
In this article, divorce financial settlement solicitor, Robin Charrot, answers your questions on divorce and digital assets such as cryptocurrency.
For expert Divorce and Financial Settlement advice call our team of specialist divorce lawyers or complete our online enquiry form.
What are digital assets in divorce proceedings?
There is no definition of a digital asset in divorce proceedings. That is probably sensible because the world of digital assets can change so fast with the latest developments in tech and online options.
Divorce solicitors find it best to outline the type of digital assets that you or your spouse might own to trigger a discussion about what you or your husband or wife might hold digitally. It is important to do that as whilst you may not forget about the existence of a holiday home, a collection of watches, or your partner’s shares in the family business, you may easily forget about an online bank account or the cryptocurrency that your spouse told you seemed like a good investment at the time.
Digital assets can include:
Cryptocurrency
Bitcoin
Online share dealing account
PayPal account
Air miles
Online gaming and betting accounts
Income-generating social media accounts
Sentimental assets such as some types of social media accounts and photo libraries
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Is cryptocurrency relevant to divorce financial settlements?
Digital assets such as cryptocurrency can be family assets in the same way as a property, pension or business can be. Just because something is online and not physical does not mean that it is not relevant to your divorce financial settlement.
Reaching a fair divorce financial settlement involves:
Working out what assets a husband and wife own individually or jointly or with a third party
Tracing assets where there are valid suspicions that assets have not been fully disclosed by the other party to the marriage
Getting the assets accurately valued
Understanding if the assets should be treated as family assets – even if the asset is not a family asset the court can have recourse to it if it is necessary to do so to meet a husband or wife's needs
Negotiating a divorce financial settlement and if that is not possible representation in divorce financial settlement court proceedings
Dealing with cryptocurrency in divorce proceedings
A good divorce solicitor combines bloodhound tracing skills with technical knowledge and a large dose of pragmatism. For example, an eBay account may not sound significant but it is if it is the prime source of sales in a family business or if a spouse has been squirreling money away by keeping it in a PayPal account. Likewise, everyone talks of cryptocurrency but you need to track down the information to find the investment or be able to show the discrepancies between disclosed assets and lifestyle.
Whilst some digital assets, like photos or the dog’s Instagram account, may only have sentimental value they still are important to you so need to be sorted out fairly but without racking up massive legal bills. It is a question of knowing when a forensic digital expert is needed to help track down digital assets and when pragmatism and common sense is the best option to sort out sentimental digital belongings.
When dealing with digital assets in divorce proceedings it is important to consider:
Drawing up a digital inventory – what you know that you or your spouse holds as digital assets
What you suspect and why you suspect it – was the talk of bitcoin hot air or is there a basis to trace assets or gather evidence of their existence
Are the digital assets capable of being shared and if not, who will keep them
The fairness of one spouse keeping the digital assets and the other keeping non-digital assets. That consideration may be relevant where there is a large online share dealing account subject to stock market fluctuations but an equally uncertain property market if the other spouse is keeping the family home
For expert Divorce and Financial Settlement advice call our team of specialist divorce lawyers or complete our online enquiry form.
Robin Charrot
Nov 16, 2022
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4 minute read
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