Financial Orders

Sorting out how you split the equity in the family home can be tricky. It can be a lot harder to reach a divorce settlement when you are also trying to agree on who pays the bank loan and credit cards, what happens to the pensions, and whether one of you should pay spousal maintenance and for how long. In this blog, our family law solicitors answer your questions on divorce financial settlements.  Call us for expert family law advice or complete our online enquiry form.  Reaching a divorce settlement  In the UK, divorce settlements are discretionary and based on reasonable needs. The statutory factors make it hard for couples to reach a financial agreement as English family law doesn’t say that a husband and wife must split their assets equally or that a wife must return to full-time employment when the youngest child is 11 or that a husband will always keep a family business owned before the marriage or even that the divorce court must follow a prenuptial agreement. If there are no hard and fast rules, how are divorce settlements reached? Ultimately, if a husband and wife can't agree, it is down to a family court judge to decide what happens to each asset and make a financial court order. The judge will look at statutory criteria and case law when making the order. When a divorce solicitor advises on likely divorce settlement outcomes, they base their advice on their experience in negotiating settlements and representing spouses in contested financial court proceedings.  Divorce settlement advice   If you need divorce settlement advice, it's crucial to speak to a divorce lawyer. The solicitor will talk to you about your circumstances before offering advice. Examples of why information and talking are important include: It is often assumed there should be a 50/50 split of assets after a long marriage. However, that assumption could be displaced for several reasons, such as the wife can't get a mortgage and needs more than 50% of the assets to buy a new family home for herself and the children or most of the assets were inherited by the husband before the marriage and the wife can comfortably rehouse herself and meet all her other needs with 30% of the total assets. Alternatively, the couple may have signed a prenuptial agreement to ringfence inherited money Clean breaks should be achieved to end any financial or other ongoing ties between husband and wife. However, if the family home is sold, the equity won't be enough for either the husband or wife to buy another property, so both parents will be stuck renting. Maybe the parent who is the primary carer of the children should stay in the family home until the youngest child is 18. The house can then be sold, and the proceeds of the sale can be split in percentages fair to the ex-husband and wife   Discretion and how it works with divorce settlements Family law solicitors will outline the discretionary factors the court applies when making a financial court order after a contested final hearing of a financial application. The factors are just as relevant if you are negotiating an agreement through family mediation, solicitor negotiations or trying to do a deal at a financial dispute resolution hearing. The discretionary factors are contained in Section 25 of the Matrimonial Causes Act 1973. The lawyer shorthand for them is ‘Section 25 criteria’. The court’s first concern should be the welfare of any dependent children and how the children's needs will be met. The court should then consider the Section 25 criteria: The income, earning capacity, property, and other financial resources that the husband and wife have or are likely to have in the foreseeable future. With earning capacity, this includes any increase in that capacity which it would, in the opinion of the court, be reasonable to expect a husband or wife to take steps to acquire The financial needs, obligations, and responsibilities that the husband and wife have or are likely to have in the foreseeable future The standard of living enjoyed by the family before the breakdown of the marriage The age of the husband and wife and the length of the relationship  Any health issues affecting either the husband or wife or their children   The contributions made by the husband or wife or likely to be made in the foreseeable future to the welfare of the family, including any contribution as a homemaker or stay-at-home parent  The conduct of the husband or wife if that conduct is such that it would, in the opinion of the court, be inequitable to disregard it The value to the husband and wife of any benefit (for example, a pension) that they will lose the chance of acquiring because of the divorce With this list of factors, it is easy to see how, in some situations, a judge may order a different financial settlement from another judge. However, the difference in judicial view should be within a band of reasonableness. For example, it would be unreasonable for one judge to say an equal split of equity in the family home and for another one to say a 90/10 split of the equity in the family home would meet the Section 25 criteria. With the uncertainty of judicial discretion, most divorcing couples prefer to try to negotiate a divorce financial consent order based on their family lawyer’s assessment of the Section 25 criteria. [related_posts] How to get the best divorce settlement  Some people think the only way to get the best divorce settlement is to apply to the court for a financial order.  They may be right. For example, if their former spouse is refusing to provide financial disclosure, is transferring assets to friends or family or is refusing to agree to a valuation of the family home or business. In other situations, a divorcing husband or wife must weigh up the costs and time in making a financial application against the benefits to be gained.  A family law solicitor will tell you that if your ex-spouse is only offering you 10% of the family assets, you need to go to court. It is far harder to advise on the decision to start financial proceedings if your former spouse is offering you 45%. The decision may then come down to the value of the 5% of the assets you may be losing out on balanced against the costs of going to court. Things are often more complicated than that, as you may also dispute your ex-spouse’s valuation of his business or home, or you may argue that your ex-partner is offering you assets that are not as valuable to you as the ones you want. For example, they may be proposing that they will keep all the equity in the family home and you keep all your pensions, but that deal doesn’t give you the capital to rehouse yourself even though it will provide you with an income in eventual retirement. At Evolve Family Law, our North West divorce solicitors focus on finding out what your ideal divorce settlement would look like and why. We then work on discovering the full extent of the family assets and any property that might be classed as non-family assets. We can then have an informed discussion with you about your realistic settlement options so you can weigh up the pros and cons of court proceedings over family mediation or arbitration or weigh up the advantages of spousal maintenance over a bigger share of equity in the family home. Having the right expert support behind you can give you the confidence to say yes or no to what is on offer from your ex, knowing that your lawyers have a strategy to get you the divorce settlement you need. Call us for an appointment to discuss your divorce settlement or complete our online enquiry form. 

In this article, our family law solicitors answer your questions on what a mesher order is and explain how the order works. If you are splitting up from your husband or wife and need advice on reaching a divorce financial settlement or need your financial agreement converted into a court order our Northwest family lawyers can help. For expert advice call our team of specialist divorce lawyers or complete our online enquiry form. What is a mesher order?  A mesher order is one way a family judge can deal with a family home when a couple split up. Alternative orders include an order that the family home is sold or transferred into the sole name of the husband or wife. A mesher order is best described as an order for the deferred sale of the family home but family law solicitors call this type of order a ‘mesher’ as the order was first made in a case involving Mr and Mrs Mesher. When the property is sold the financial court order will set out how the equity in the property is to be shared between the former husband and wife. One ex-spouse may get a larger percentage than the other so they can rehouse themselves or an ex-spouse may get less than 50% of the equity because they kept their pension or the family savings at the time of the divorce proceedings.  How does a mesher order work? A mesher or deferred sale order works by delaying the sale of the family home until a specified date or trigger point occurs. Until the trigger point, one former spouse can live in the house to the exclusion of the other, even though both are still legal owners.  Normally a mesher order is made by the court when a couple has children and there is not enough equity in the family home for the property to be sold and the equity to be split so both the husband and wife can afford to buy new properties. A mesher may be necessary if one spouse cannot rehouse themselves because they have no or limited mortgage capacity and housing is a priority for them as they are caring for the children. A mesher order is normally only appropriate where the spouse staying in the family home cannot raise money through a mortgage to rehouse or remortgage to pay off the other spouse’s share of the equity in the family home and the spouse cannot get the mortgage company to agree to transfer the mortgage on the family home from joint names to their sole name. A mesher order maintains property ownership and financial links between a separated couple. Even if no spousal maintenance is payable, they continue to be financially linked through the joint mortgage. The mesher order can say who is responsible for the mortgage payments but if the payer defaults on the mortgage the credit rating of all those named on the mortgage will be affected. What are the trigger points for a mesher order? You can agree on the trigger points with your ex-spouse if you negotiate an agreed financial settlement or the court can decide on the triggers if it makes an order for a deferred sale after a court hearing. Some of the usual trigger points are:   The youngest child finishing their secondary education The re-marriage or cohabitation of the spouse living in the property with the children. Cohabitation is normally defined as living with an unmarried partner for a specified period, such as three or six months The children no longer living with the spouse who has the right to stay in the family home. For example, if the children are older teens and vote with their feet to live elsewhere or if the court makes a child arrangement order    The spouse who occupies the property leaving it. For example, because they decide to move elsewhere  The spouse who occupies the property passes away If you are negotiating a mesher order through solicitor negotiations or family mediation you can ensure that the trigger dates work for your family circumstances. [related_posts] Is a mesher order a good idea? A mesher has good and bad points. The good points are: The spouse living in the property has a secure home for the children and is not at risk of having to keep moving the children between different rental properties   Keeps the mortgage in situations where the mortgage is on favourable terms or neither spouse  would qualify for another mortgage  Means the ex-husband and ex-wife remain on the property ladder and they may both have enough to re-house once one of the triggering events occurs  Some of the negative things about mesher orders are: The spouse in occupation may feel unsettled knowing that they will have to sell the property when a trigger point occurs. This may make them reluctant to invest in improving the property knowing that their ex-partner will get a share of the equity The former spouses are financially linked to one another by having a joint mortgage. If the spouse in occupation does not pay the mortgage this will affect the credit rating of both spouses The spouse not living at the family home may not be able to get another mortgage while their name remains on the joint mortgage on the family home and they will not be able to use their share of the equity in the family home to use as a deposit to rehouse themselves  Family law solicitors emphasise the importance of taking specialist advice before agreeing to a mesher order so you can fully weigh up the advantages and disadvantages of a deferred sale. Applying for a mesher order If you and your former spouse agree that the children should stay in the family home then your family lawyer can draw up an agreed court order for approval by a family court judge. If you can't reach a financial settlement either of you can apply for a financial court order leaving the judge to decide if a mesher order is the most appropriate solution for your circumstances. For expert advice call our team of specialist divorce lawyers or complete our online enquiry form.

Our family law solicitors are asked if it is possible to divorce your wife and keep everything. In this blog, we explain your options if you want to keep all the assets after your separation. For expert advice call our team of specialist divorce lawyers or complete our online enquiry form. Can a husband divorce his wife and keep everything?  It is technically possible for a husband to divorce his wife and keep everything but most divorce solicitors will tell you that it is an unlikely outcome in financial settlement negotiations or financial court proceedings unless your circumstances are unusual. If you are a husband your best bet to keep all your assets after a separation or divorce is to sign a prenuptial agreement before your marriage or a postnuptial agreement after your marriage. Even if a wife has signed a prenuptial or postnuptial agreement the document is not legally binding on a spouse under English law. The agreement will carry weight provided both husband and wife took independent legal advice on the contents of the agreement and there was no coercion to sign the document and completion of the paperwork only took place after husband and wife disclosed their assets. If these safeguards were not put in place the court may disregard the terms of the prenuptial or postnuptial agreement. Even if you ticked all these safeguarding boxes, the court may conclude that if the wife gets nothing, as you are keeping everything, the outcome is unfair because the wife’s needs are not being met. The court may therefore disregard the terms of the agreement. A prenuptial agreement solicitor will normally recommend that your prenuptial agreement or postnuptial agreement does not allow you to keep everything as it is better to have an agreement that works and therefore one that gives your wife a modest financial settlement that meets her financial needs rather than sign a prenup that says you will get to keep everything if you divorce but the prenup then doesn’t work in practice if you split up from your wife. [related_posts] If my wife agrees that I will keep everything, can I get a financial court order? The court can be asked to make an agreed financial consent order. The agreed order is lodged by your divorce solicitor after your conditional order of divorce has been pronounced. The order must be accompanied by a standard court form (called a statement of financial information) summarising the details of your marriage and your personal and financial circumstances. If this prescribed form is not completed the court will not approve your financial court order. If, for any reason, the figures provided in the form are wrong (for example you say your company shares in a family business are worth £10,000 rather than a more realistic 1 million) your wife will be able to reopen her financial claim at a later date because of inaccurate financial disclosure that led to the financial court order being made. Your ex-wife could ask the court to make another financial court order giving her a reasonable share of the assets. Therefore, inaccurately valuing assets on the form does not give you the financial security you need. If the shares in your family business continue to increase in value, then by the date of your wife's further financial settlement application, your company shares could be worth 10 million.  Providing inaccurate information in the court paperwork could cost you a lot of money if your ex-wife is advised to reopen her financial claims. If you complete the prescribed form to accompany your application for an agreed financial court order and include accurate asset figures, and the document shows you will be keeping everything and your wife will be getting nothing, the judge may refuse to make the agreed order. The judge may ask questions in an email or letter to your divorce solicitors or may invite you and your wife and your family lawyers to a court hearing so the judge can understand the rationale behind the making of the financial court order.  You may think that the answer to keeping everything lies in making a deal with your wife that she doesn’t get anything but neither of you ask the court to make a financial court order. However, you then run the risk of your ex-wife deciding to apply for a financial court order at a later date and asking for money or property or a share of your pension. This could work against you if your property or other assets have gone up in value from the date you agreed with your wife that she would walk away with nothing whilst you keep everything. What should you do if you want to keep everything after your divorce?  If you want to leave your wife with nothing the best option is to talk to a family law solicitor about whether you can achieve this and how to do so. Your family lawyer may tell you that it will be an uphill task and that you may be better off focussing on a lowball offer that meets your wife's reasonable needs but is pitched at a level where you can get a clean break financial court order from the family court.  A clean break court order means your wife can't come back later on and ask for more spousal maintenance or a share of your pension or equity in your house. That’s why it’s crucial to secure a court order to give you future financial security so you can plan for your future and not have concerns that your wife years later could come back and ask for money because she had nothing at the time of your separation. For expert advice call our team of specialist divorce lawyers or complete our online enquiry form.  

Applying for a Financial Court Order when you Have Reached a Divorce Financial Agreement If you have reached an agreement with your ex-husband or your ex-wife about how your assets will be split after your divorce you may question if you need a financial court order. A divorce solicitor will tell you that a court order is necessary and explain what could happen if you don’t obtain an order. For expert advice on divorce and family law call our team of specialist divorce lawyers or complete our online enquiry form. Why you need a financial court order If you have reached a divorce financial settlement by agreement, you still need a financial court order. There are several reasons why you need an order: It gives you financial security – if your ex-partner changes their mind and wants more than you originally agreed upon you can rely on the court order to prevent additional claims for cash. For example, your ex may say the original agreement was unfair because the value of your business has gone up more than the equity in the family home or that they need more because they did not get a share of your pension when they negotiated the financial deal You can enforce a court order – you may think that your ex-spouse won't breach your agreement but, for example, if you agreed that the family home would be sold, they may be reluctant to sell the property if it means they have to downsize. A court order can include the mechanics for the sale and if a spouse is resistant to a sale the court can order that a judge has the authority to sign the transfer documents. You may think it unlikely that you will need to enforce an order but situations change, such as your ex-spouse or you meeting a new partner, and that altering the dynamics Pensions – if your financial agreement includes pension sharing the pension administrator is not allowed to implement your agreement until they have a financial court order, pension sharing annex, and the final order of divorce   Third parties – you may need a financial court order where third parties are involved. For example, if one of you is at potential risk of bankruptcy with the involvement of a trustee in bankruptcy. For example, if a mortgage company will only transfer the mortgage into your ex-spouse’s sole name if the transfer is made under a court order or if there is a spousal maintenance order so your ex-spouse can persuade the mortgage company that they have enough income to be able to take the mortgage over on their own Clean break – some financial agreements include a clean break to stop any future financial claims by you or your ex-spouse. If you have negotiated a clean break, it is important to have the security of a binding financial court order that endorses and confirms the clean break [related_posts] Applying for a financial court order If you have reached a financial agreement through direct discussion, solicitor negotiations, or family mediation there is normally no need to go to a court hearing to get your financial court order. Your divorce solicitor can send the paperwork to the court for approval and, in the vast majority of cases, a judge will agree to make the financial court order with no alterations to the draft order or only minor ‘drafting tweaks’. Broken down into stages, to obtain a financial court order you have to: Check there is an agreement that is capable of being made into a financial court order – if you negotiated your agreement direct then your divorce solicitor can check your agreement for you Check if the court can make a financial court order – the court can only make a financial court order once you have obtained a conditional order of divorce. If you got divorced some time ago and have a decree nisi of divorce the court can still make a financial court order Check if any relevant third parties are OK with the agreement. For example, the mortgage company if a house and mortgage are going to be transferred into one spouse’s name or a pension administrator if a pension sharing order is being requested Draw up the draft financial court order and exchange it with your ex-spouse’s solicitor and make any changes needed Swap statements of financial information summarising your assets and income. These statements are filed in court with your draft financial court order. The court will not approve a financial court order unless these statements are prepared and filed Send the draft financial court order to any relevant third parties. For example, to a pension administrator for their approval of the wording of the pension sharing order Ask the court to approve the financial court order by sending the court the required paperwork and court fee. In the vast majority of cases, the judge will make the financial court order requested if the order has been properly prepared and the statement of financial information explains why the court order has been agreed upon Answer any questions the court may have on the proposed financial court order Once the sealed financial court order is received from the court send it to any relevant third parties. For example, the pension administrator, financial advisor, or property solicitor if the financial court order includes pension sharing, investment transfers, or the transfer of property Finalise the divorce proceedings as without the final order of divorce the financial court order cannot be enforced Diary up. If the financial court order includes spousal maintenance your divorce solicitor should check and diary up review dates for increases in line with retail price index rises or end dates and make sure everything in the court order has been sorted out, such as the implementation of a pension sharing order, the taking out of life insurance or changes to a pension nomination That list may look exhausting but the job of a divorce solicitor is to convert agreements into financial court orders. At Evolve Family Law we recognise that if you have reached a financial agreement, you do not want to hang around whilst divorce solicitors get out their fountain pens to prepare financial court paperwork and then post it back and forth between spouses and solicitors. Evolve uses technology to standardise and speed up the process of drafting family court orders, and as importantly, to make the obtaining of a financial court order more cost-effective and value for money for you. It is the combination of experience and technology that means Evolve Family Law can offer transparent pricing and fixed fees for financial court orders. We are proud to say that we are one of the first law firms in the country to publish our fees online in a handy user-friendly guide without hidden extras as the quoted fees include VAT. Some financial court orders are more complicated than others, especially where there are businesses or trusts involved, and in other situations, you may not be able to reach a financial agreement and so need advice on the financial court process. Whatever the situation you find yourself in, Evolve Family Law can help with friendly approachable expert assistance combined with transparent costs. The first step is to contact us to discuss how our divorce solicitors can help you. For expert advice on divorce and family law call our team of specialist divorce lawyers or complete our online enquiry form.

Do you suspect your ex is hiding assets from you in your divorce proceedings? If your ex is hiding assets there is a real risk you won't achieve a fair financial settlement. If you suspect your ex is hiding assets there is also a strong possibility that you won't be able to reach an agreed financial settlement because of your suspicions. That’s why if you think your ex is hiding assets in divorce proceedings it is best to get expert family law advice on your options. For expert Divorce and Financial Settlement advice call our team of specialist divorce lawyers or complete our online enquiry form. Is my ex hiding assets in divorce proceedings? Divorce solicitors will tell you that a husband and wife are under a duty to provide full and frank financial disclosure of their assets when negotiating a financial settlement. That’s the case whether you are negotiating through: Direct discussions Solicitor negotiations Family mediation Family arbitration Financial Court proceedings If things are amicable, or your finances are straight forward, you may not want to see reams of paperwork going back years but every family situation is different. You probably know if your ex has hidden stuff from you throughout your marriage or you may suspect that they started to do so when they met someone else or when the marriage got into difficulties and the relationship started to drift apart. If your ex is very keen to reach a financial settlement without providing any paperwork and wants to get an agreed clean break Financial Court Order as soon as possible this may raise a red flag for you or your divorce solicitor as you need some minimum paperwork to check things out. If you feel that you are being pressurised into accepting no or very limited financial disclosure documents, and into accepting your ex’s word for everything, talk to a financial settlement solicitor before agreeing to a division of assets. That’s because whilst your ex might be totally honest and just wanting to ‘cut to the chase’ and get an agreement, you are entitled to see supporting paperwork. It’s important to do so as any financial settlement you reach by agreement can't easily and quickly be unravelled if it turns out that you were right to have your suspicions about your ex hiding assets from you. [related_posts] Why is my ex hiding assets? There are many reasons why an ex may try to hide assets. Divorce solicitors come across these common excuses: It is inherited money It is savings from my income The new house is owned by my new partner so it isn’t really my asset even though the deposit came from me There is no need to get a business or pension or other asset valued as you can take my word for the value Money was owed to a family member and was not transferred to them to hide assets Cash that was put into additional bank accounts was forgotten Property owned abroad or owned before marriage doesn’t count towards the financial settlement so wasn’t disclosed as it isn’t relevant ( in the ex’s opinion) These are all excuses and should not be used as a reason to not provide full and frank financial disclosure. Sometimes an ex will try to hide money that might not be relevant to the financial settlement but you will both spend time and money arguing over the financial disclosure. However, if the asset had been disclosed at the outset your financial settlement solicitor could have advised you about its overall relevance to the financial settlement. For example, a pension accrued before a short marriage with a cash equivalent transfer value of £10,000 may not be of significance and your ex is wasting their time and money by trying to hide an asset that may be of limited relevance because of the duration of your marriage or your ages. However, by failing to disclose the pension, you and the Court may be far more sceptical about how honest their other financial disclosure is, such as, the extent of your ex’s declared self-employed income or the reason they have transferred money to a sibling or new partner. What can you do about an ex hiding assets? If you are separated or getting divorced and you believe your ex is hiding assets you may need urgent financial settlement and injunction representation. That’s because if your ex is hiding assets with the intention of reducing your financial settlement you may need an injunction order to stop them. Examples of when you may require a financial injunction include: Your ex is transferring money or property to a third party Your ex is putting their pension in payment and taking the maximum tax free cash sum to put the money out of your reach Your ex is syphoning money out of the family business by paying a family member for false invoices with a view to making sure the family business has a lower value placed on it as profits will be down Your ex is buying property overseas or transferring assets abroad Your ex is moving money out of joint bank accounts and putting it into cryptocurrency An injunction is a temporary measure to stop your ex from hiding or disposing of assets. It is best to consider a section 37 injunction application rather than assume that in financial settlement Court proceedings a new partner, parent or sibling can be joined into the financial application to try to unravel the transfer of assets. Whilst that is possible it is normally best to stop the transfer taking place in the first place by securing a freezing injunction. If you have not already done so, a divorce solicitor will also advise you to start financial Court proceedings for a Financial  Court Order. Within the financial settlement application, the Court can make financial disclosure orders that your ex will need to comply with. If your ex does not comply with the financial disclosure orders then you can ask the Court to enforce the disclosure orders against your ex or ask the Court to draw inferences. For example, if the Court ordered disclosure of historical bank statements to reveal what happened to the £100,000 after the sale of a buy to let property and your ex flouts the disclosure order you can ask the Court to draw inferences as to why and ask the Court to add back in the £100,000 so you get a greater share of the other family assets. Financial proceedings and ex hiding assets If you have started financial proceedings and you are not satisfied with your ex’s Form E financial disclosure then a specialist family solicitor can review the financial disclosure with you and draw up a list of additional questions and request for extra non-standard paperwork . For example, if your ex is the director and shareholder in a family business and you suspect they have been syphoning money off to their new partner by creative accounting or use of the director loan account, you can ask for a forensic accountant to value the business and look at your accounting concerns as well as asking for an order that your ex disclose statements for their DLA. Alternatively, you can ask the Court to make financial disclosure orders to help you investigate if: Your ex is self-employed and the family lifestyle does not match their declared earnings Your ex has withdrawn significant sums from a business or personal account and that is not their usual pattern of spending Your ex previously mentioned an asset that they said would be a rainy day asset or pension but there is no mention of the asset in their financial disclosure There are lots of ways a tenacious divorce solicitor can ‘get to the bottom’ of financial disclosure, with the assistance of your background information and knowledge of your ex, combined with seeking the right injunction, financial disclosure orders and valuations. For expert Divorce and Financial Settlement advice call our team of specialist divorce lawyers or complete our online enquiry form

Getting divorced and reaching a financial settlement can be hard, even where there are only two of you involved in reaching a financial settlement and securing a Financial Court Order. It can be even harder when family members have given or loaned money, with disputes over whether the money was a gift or a loan and how the loan should be treated in the divorce and financial settlement proceedings. For expert Divorce and Financial Settlement advice call our team of specialist divorce lawyers or complete our online enquiry form. The recent financial settlement Court case of P v Q (Financial Remedies) [2022] EWFC B9 (10 February 2022) has confirmed how the Courts should treat family loans in a divorce. The case emphasises the importance of extended family members taking legal advice if they intend the transfer of money to be a loan or want a gift to be ring-fenced in the case of separation or divorce. Family loans in financial settlement proceedings If a member of the extended family gives money to a husband or wife during their relationship then undoubtedly at the time of the gift or loan the money is very welcome. When a couple split up, family loans can complicate things where there is a dispute about: Whether the money was a gift or loan. Whether the gift was to the husband or wife or to the couple jointly. If the money was a loan, the repayment terms. If the money was a loan, whether the debt should be included as a debt in the asset schedule. If the money has been repaid to the extended family member because of the divorce, whether the money transferred to the relative should be added back into the asset schedule. Whether the extended family member should intervene in the financial settlement Court proceedings. Things can get very acrimonious when family money is in issue, with one party saying the money was a gift and the other a loan. Expert divorce and financial settlement solicitors say it is best to: Get help from an experienced divorce and financial settlement solicitor. They will give you an unbiased view on whether the family Court will say the money is a gift or a loan. Whilst you may not like their opinion about the treatment of the family money, you don’t want to waste time or money on an argument that you are not likely to win. Look at the cost of arguing whether the family money was a gift or loan as you don’t want to spend more in legal costs arguing the point if the costs will be more than the amount to be gained in your likely financial settlement. [related_posts] The case of P v Q (Financial Remedies) [2022] EWFC B9 The case of P v Q involved an international family based in the UK and Germany. The wife was German, living in England. The husband was English, living in Germany with the couple’s two children. The case had many unusual points, including the value and liquidity of company shares, particularly as the case was heard at a time when Russian forces were massing at the Ukraine border and there were expectations of share price volatility because the shares were held in an energy company. Divorce and financial settlement proceedings were started in the UK. The wife said the husband had given his mother £150,000 to reduce the amount the wife would receive as a financial settlement. The husband said he had given his mother the £150,000 to repay a loan and that the money should not be added back into the asset schedule. The judge acknowledged he had to consider the factors set out in Section 25 and Section 25A Matrimonial Causes Act 1973 together with any relevant case law when deciding how to split the assets and how to treat the family loan money. Section 25 Matrimonial Causes Act 1973 broadly says it is the duty of the Court when making a Financial Court Order to have regard to all the circumstances of the case, first consideration being given to the welfare while a minor of any child of the family who has not attained the age of eighteen. Amongst other things, and of particular relevance to family money and loans, the Court should have particular regard to: The income, earning capacity, property and other financial resources which each of the parties to the marriage 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 in the opinion of the Court be reasonable to expect a party to the marriage to take steps to acquire. The financial needs, obligations and responsibilities which each of the parties to the marriage has or is likely to have in the foreseeable future. In the case of P and Q , the husband’s mother gave each of her three children the sum of £150,000 to help them with housing. No loan documentation was drawn up. There was no evidence that the husband's mother had gifted the money as part of an estate planning strategy. No demand was ever made for repayment of the £150,000 and there was no discussion about the circumstances when repayment was required. In evidence the mother said she hoped the family would repay the money to her if she was in need. The husband repaid the £150,000 to his mother without his mother asking for the money. The wife argued the transfer was a device to remove £150,000 from the asset schedule so she lost out, using the sharing principle of a 50:50 split, of £75,000. The judge had to consider if the £150,000 (and other family monies) were gifts or loans. The judge held that for money to amount to a gift there must be an intention to give away – with no expectation of repayment. Accordingly, the £150,000 was a loan. The arguments didn’t stop there as the judge, using case law, then had to go on to consider the nature of the hard or soft loan to determine if the £150,000 should be added back into the asset schedule. When looking at the treatment of loans in financial settlement proceedings, the judge said the family Court needs to consider: If a judge concludes there is a contractually binding obligation by a party to the marriage towards a third party, the Court should then consider whether the obligation is a hard obligation debt or a soft debt. There is no set test to decide if a loan amounts to a hard or soft debt. A common feature of family loan analysis in financial settlement proceedings is to consider if the obligation to repay will be enforced. Factors pointing to a hard loan include that the terms of the obligation feel like a normal commercial arrangement, there is a written loan agreement and a written demand for payment, a threat of litigation or intervention in the financial settlement proceedings, there hasn’t been a delay in enforcing the debt and the amount of money owed is such that it would be less likely for a creditor to waive the obligation to pay. Factors pointing to a soft loan include that the debt is owed to a friend or family member who remains on good terms, the loan is informal without a commercial arrangement feel to the loan, there has been no written demand for payment despite the loan repayment date having passed, there has been a delay in enforcing repayment, and the amount of the money is such that it would be more likely for the creditor to be likely to waive the obligation to repay. Using these principles and looking at the facts of the husband's loan from his mother, the judge concluded the loan fell into the ‘soft’ category of loan. For the financial settlement, that meant the loan monies were added back into the asset schedule, thus increasing the amount to be shared between the husband and wife by £150,000. Divorce and private client considerations when making or receiving family loans If you are thinking about making a gift or loan to a family member, it is sensible to take private client advice to try to ensure your gift is either tax efficient for inheritance tax purposes or ring fenced and protected in case of divorce through the use of a loan document, preferably combined with a prenuptial agreement or postnuptial agreement. For expert Divorce and Financial Settlement advice call our team of specialist divorce lawyers or complete our online enquiry form.

The Impact of Domestic Violence On A Divorce Financial Award In this blog divorce financial settlement solicitor, Robin Charrot, looks at a recent court case involving divorce financial settlement claims and allegations of domestic violence to see how divorce settlements work and how the court treat domestic abuse allegations when making financial settlement decisions. The financial settlement A wife, age 55, separated from her husband. They could not reach a financial settlement by agreement and financial  court proceedings were started. Sadly, the scenario of a husband and wife splitting up and going to court to get a financial court order isn’t unusual but what marks this case out is that the wife was a barrister and had a property portfolio in her name, acquired through her earnings during the eleven-year marriage. The husband, age 58, wasn’t working and had not worked independently of the wife throughout the marriage. Again, there isn’t anything unusual about this save for the situation not complying with the unusual gender stereotype. However, the wife said that as well as her being the bread winner in the marriage, the husband had been violent to her on two separate occasions. The wife said that meant the husband should get nothing by way of financial award. The husband argued that wasn’t fair. The domestic violence allegation The financial court looked at the domestic violence allegations. The husband had been prosecuted but was acquitted so had no criminal conviction for domestic abuse. None the less the family court said it could take the allegations of domestic violence into account because the family court had made findings about the domestic abuse. A husband or wife should therefore not assume that just because a spouse did not report domestic abuse to the police that the family court will disregard domestic violence. However, the court also made it clear that just because there has been domestic violence in a relationship that does not mean that the perpetrator of the domestic abuse should end up with nothing. The financial court proceedings The family court ordered the wife to pay the husband £625,000 as a financial court order but the wife disagreed and appealed. She thought the ruling was unfair. The second judge said that £200,000 of the £625,000 award should be a charge to the wife, repayable by the husband’s estate on his death or repayable by the husband to the wife if the husband were to remarry or live with a new partner. The wife asked the court to reduce the lump sum payment to £425,000. On appeal, the court kept the payment at £625,000 and cancelled the charge. This means the wife has to pay the full £625,000. The court calculated that £625,000 was necessary to enable the husband to buy a new house with a budget of £400,000, with £25,000 to buy a car and pay living expenses and £200,000 to cover costs. The appeal judges concluded that the domestic violence findings did not mean there should be no financial  award or a charge back of some of the financial settlement. The appeal judges favoured a clean break financial settlement with no ongoing financial ties between husband and wife.  The costs of not agreeing a financial settlement When determining the appeal, the judge said the family financial  proceedings had become ‘an exercise in self-destruction' because the legal costs had become disproportionate to the family assets so it was hard to achieve a financial settlement that either husband or wife thought was fair. As the appeal court concluded that the findings of domestic abuse made against the husband do not justify making what would otherwise be an inappropriate order the £200,000 charge was removed giving him a lump sum of £625,000. [related_posts] The lessons from the court case The lessons from the court case are that arguing over principles doesn’t always pay as whilst the wife was the breadwinner the husband was nonetheless entitled to a financial  award to meet his needs. Those needs were not extinguished by the finding of domestic violence in the relationship by the family court although it is fair to say that the award is smaller than if no domestic violence allegations had been made. It is therefore important to raise allegations of domestic violence but not to expect that the court will make no award or an award that is lower than an amount that meets the perpetrators basic needs if the other party has his or her needs met. In this case the wife was not only a barrister, she specialised in family law. What that tells us is that it is important to get independent and impartial expert family law legal advice as early as possible. Whilst you may not like the legal advice it may save you a lot in legal costs if that legal advice enables you to reach a pragmatic financial settlement. Evolve Family Law are North West and Online Family and Divorce Solicitors For legal help and advice on divorce and family law call us or complete our online enquiry form.

When you take the decision to separate you may not realise just how big an impact your divorce may have on your future income. The financial services company, Legal and General has revealed that women’s income falls by a third and men’s income by 18% on divorce.  In this blog we look at the impact of divorce on your income. The divorce statistics You may be shocked by the divorce statistics and question why a woman’s income on divorce should reduce by more than men’s income.   The Legal and General research suggests that there are several factors behind the statistics, such as: The reality is that many women earn less than their male counterparts during the marriage because of career choices and childcare In divorce financial settlements women are more likely to ask her for and get a financial settlement that includes the family home or more than half the equity in the sale proceeds of the family home. If you get a greater share or all the equity in the property, then you are less likely to be awarded spousal maintenance or to receive a share of their husband's pension fund and the making of a pension sharing order. [related_posts] Will a divorce impact on my income? When a couple separate it is usual to go from a two-income household to a one-income household with a consequent reduction in income.   If a reduced income means that you can’t manage to pay your reasonable outgoings, the court can make an order that the other party to the marriage pay spousal maintenance. The payment of spousal maintenance can continue indefinitely until terminated by death, re-marriage of the receiving party or further order. Alternatively, the court can order that spousal maintenance is paid on a time limited basis.   What amounts to reasonable outgoings will depend on the standard of living enjoyed during the marriage as well as the affordability of the current outgoings considering: The ability of one spouse to afford to pay spousal maintenance and still meet their own reasonable outgoings and The ability of the other party to the marriage to either find work or increase their earnings capacity so they can meet all or a greater proportion of their own reasonable outgoings.   Divorce solicitors will tell you that when it comes to income on divorce and whether your respective incomes will be shared (through a spousal maintenance order) comes down to a range of factors, such as: Whether you have young children to support and whether the care of children impacts on your earnings capacity Whether any disability or age impacts on your ability to seek employment or increase your income Your income and earnings capacity The extent of your reasonable outgoings The length of the marriage Other factors, such as the existence of a prenuptial agreement that sets out whether and how long spousal maintenance should be payable on separation and divorce.   Perhaps, just as importantly, parity of income on divorce can come down to a question of priorities. You may want to forgo a pension sharing order on divorce as your priority isn’t income on retirement but instead getting the equity in the family home so you can rehouse yourself without a mortgage. Alternatively, you may want the capitalisation of your spousal maintenance payments so that you get a cash lump sum instead of ongoing monthly payments.   Whatever your priorities it is best on separation or divorce to take legal advice from a specialist divorce solicitor so you can understand the range of options for your financial settlement and work out which one is best for you and your family. Without expert legal and financial advice, you may not appreciate the value of the pension fund belonging to your spouse and how a pension sharing order could be to your financial advantage.   The divorce solicitors at Evolve Family Law will not only look at your financial settlement options but they will also reality test them with you. For example, if your priority is to keep the family home and you are willing to forgo a pension sharing order or spousal maintenance to keep the property then this may not be a realistic or best option if you can’t afford to pay your reasonable outgoings on the property as you aren’t getting spousal maintenance or a pension sharing order. Our Manchester and Cheshire Divorce Solicitors Evolve Family Law specialise in separation and divorce proceedings and resolving financial settlements .Call us or complete our online enquiry form for expert legal assistance with your financial settlement. Evolve Family Law have offices in Whitefield, North Manchester and Holmes Chapel, Cheshire but our family law solicitors are also experienced in working remotely and offer meetings by telephone appointment or video call.