Family Law

The recent case of Y v Y [2012] EWHC 2063 is a useful reminder of how the courts treat inherited assets upon a divorce.

The extent to which the courts take inherited assets into account will depend on the circumstances of the case; such as the length of the marriage, the parties’ financial resources, their needs and how the assets have been dealt with during the marriage.

Inherited assets are often treated as non-matrimonial property, however, if they contain a property used as the family home or the assets were intermingled or used by the family then the court are likely to deem these assets to be matrimonial property.

The court’s approach as set out in the case of White v White in 2000 made it clear that whilst there might be a distinction between matrimonial property and non-matrimonial property this will carry little weight, if any, in a case where the parties’ financial needs cannot be met without recourse to this property.

Whilst inheritance will be considered a contribution towards the marriage and credit given for this ultimately this factor will be trumped on the basis of need. If the couple requires the inheritance to meet their needs then the significance given to the inherited asset would diminish.

In Y v Y this showed even where there were significant assets the court still needed to divide some of the inherited assets to meet the parties needs.

The facts of the case were unusual. The husband inherited and managed the family estate comprising a country mansion with staff cottages surrounded by over 1600 acres of gardens and farmland; further residential properties; a farm with farmhouse; commercial properties; an Equestrian Centre and a pub! The estate was valued at nearly £36 million gross and nearly £23 million net.

The parties were married for 26 years and the wife sought a significant portion of the estate to meet her reasonable long-term needs. The court awarded her 32.5% of all assets to meet her needs reflecting the lifestyle they had lived. However, she did not receive an equal share which she would have received if the bulk of the assets had not been inherited.

It may be possible for inheritances received by a party before or during the marriage to be ring fenced, or at least partly protected, by entering into either a pre-nuptial or a post-nuptial agreement. Such agreements will often be respected as fair and can be a valuable insurance policy for the future.

For expert and specialist advice please contact Andrew Kingston on 01635 521212 or andrew.kingston@clmlaw.co.uk.

Andrew Kingston, a family lawyer with Charles Lucas & Marshall, says that business owners planning to get married should give some thought as to how they may want to protect their business.

Andrew Kingston – Family Law Specialist

As a business person you have worked hard and sacrificed time and money to build up a successful business. No doubt luck has played its part and you have taken some risks but not without managing and minimizing the risks as much as possible.

You may not think it at the time, but getting married is a financial risk to your business. Statistically you are more likely to divorce than to stay married for life.

The principle of the court, in divorce cases, is to divide assets including business assets, fairly between the couple, considering each party’s reasonable needs and the sharing of any wealth above that which fulfils those needs.

When dividing assets, the court will measure the end result against a benchmark 50/50 asset split to assess whether anything other than that is justified.

While the contributions of the parties can be a factor, the court will normally take the view that the role of the ‘homemaker’ is no less valuable than that of the ‘breadwinner.’

If you are considering getting married and have built up a successful business, you should consider a pre-nuptial agreement to protect your business in the unhappy event of a divorce so that no claim can be made on its value and/or a sharing of its income.

A pre-nuptial agreement is an agreement that parties reach before they are married which sets out basic rules in relation to the division of matrimonial property and can protect business assets against a claim in the event of a relationship breaking down.

If the marriage has already taken place you can still enter into an agreement, referred to as post-nuptial agreements and these are just as effective as a pre-nuptial agreement.

While pre-nuptial agreements are not binding on the courts, the recent Supreme Court landmark decision of Radmacher -v- Granatino held that courts should give effect to a nuptial agreement freely entered into by each party – with a full appreciation of its implications – unless in the circumstances prevailing, it would not be fair to hold the parties to their agreement.

This decision has given significant weight to the signing of nuptial agreements, which had previously provided little guarantee after the breakdown of a marriage.

If your marriage does end in a divorce then having a pre-nuptial agreement in place, setting out the distribution and management of assets, should enable the divorce to proceed with minimal disruption to you and your business.

If you have business interests to preserve, then such an agreement is a recommended step to protect your hard earned assets and achievements.

For expert and specialist advice on Pre-Nuptial and Post-Nuptial Agreements please contact Andrew Kingston on 01635 521212 or andrew.kingston@clmlaw.co.uk.

A rejected husband attempted to stop his wife divorcing him by telling a court that she must be mad to want to leave him. This article appeared in the Daily Telegraph and can be accessed here:

Divorce

http://www.telegraph.co.uk/news/uknews/law-and-order/9252538/Husband-tells-court-his-wife-must-be-mad-to-want-to-divorce-him.html

At first glance one might be inclined to chuckle at the bravado of the husband. However, on closer inspection this is a deeply sad story and an all too common tale of a marriage breakdown.

Peter Savva, said that his wife of 34 years, Niki, must be “ill” or “confused” to want to end their marriage and asked the Court of Appeal to order a psychiatric assessment of her. The judge, Lady Justice Black, did not agree stating that the wife showed no sign of being mentally unstable but that Mr Savva was unable to accept that the marriage was over.

As a family solicitor it is a common occurrence to find that one party believes the marriage to be at an end and the other does not. This creates difficulties for all involved. We family solicitors are often portrayed as ruthless and unprincipled characters – the reality is very different. The majority of us are members of Resolution who are committed to handling family matters in a sensitive, constructive, amicable and cost effective way. I will always discuss with the client the possibility of reconciliation and direct them to marriage guidance where possible.

However, the simple fact of the matter is that if one party is set on obtaining a divorce there is little, if anything, the other party can do to prevent that. It is only right that the person who feels the marriage has irretrievably broken down has the right to bring it to an end.

Mr Savva was also of the view that there be a “cooling off” period before any party could go ahead with the divorce. The parties often reach different stages of emotion at different times. Many can be initially angry or distressed and perhaps not in the best frame of mind to conduct serious proceedings at first. Whereas others may have been thinking of separation for a long time and adjusted to the prospect of a separation. There are a mix of emotions following a separation and each situation needs to be handled sensitively. I actually think this is a sensible suggestion but the technicalities would be difficult. When would the “cooling off” period start (many parties cannot even agree on their date of separation!) and how long should it be?

Mr Savva has stated that he would now seek a judicial review of the laws governing the process of divorce. I wish him luck – but sadly this is an area of the law that many governments have tended to leave alone.

For expert and specialist advice please contact Andrew Kingston on 01635 521212 or andrew.kingston@clmlaw.co.uk.

The Financial Times has recently reported that there has been a significant increase in the number of farmers signing up to pre and post nuptial agreements to protect their wealth from enlarged divorce payouts to their spouses. The reasons behind this are two-fold. Firstly, over the last 5 years the price of farmland has seen a significant increase from an average of £3,000 per acre to £6,000 per acre.

Farmers and their family members need to be aware that under matrimonial law inherited property such as a farm is not automatically ring fenced and protected on a divorce. The court is entitled to take all assets into consideration and if those assets are needed to ensure the parties’ needs are met – then this will take precedence over where the asset came from. Matters are more complicated in farming cases as the matrimonial home is often the farmhouse and surrounding land as so its value is normally taken into account by the courts and added to the matrimonial pot for division.

Radmacher -v- Granatino

Coupled with the increase in value of farmland is the increasing weight that courts will now give to pre and post nuptial agreements. In the recent Supreme Court landmark decision of Radmacher -v- Granatino it held that courts should give effect to a nuptial agreement freely entered into by each party with a full appreciation of its implications unless in the circumstances prevailing it would not be fair to hold the parties to their agreement. This decision has given significant weight to the signing of nuptial agreements, which had previously provided little guarantee upon the breakdown of a marriage.

All farmers should now seriously consider entering into either a pre-nuptial or post-nuptial agreement to protect their family wealth from enlarged divorce payments which otherwise would go to their spouse.

If a farmer does not enter a pre- or post-nuptial agreement then they can be faced with the very unwelcome prospect of either selling farmland or borrowing money to finance a fair divorce settlement.

For expert and specialist advice on pre-nuptial and post-nuptial agreements please contact Andrew Kingston on 01635 521212 or andrew.kingston@clmlaw.co.uk.

Question: My son has recently separated from his partner who is refusing him contact with his children. I am worried we will lose our relationship with our grandchildren. What can I do?

Andrew Kingston, family law specialist, Charles Lucas & Marshall

Andrew Kingston - Family Law Specialist

It is a well known fact that after a relationship breakdown, up to one in three children lose touch with an absent parent within three years – normally the father –  and do not see that parent again.

What is often forgotten is that these children also lose touch with their grandparents.

The time spent with grandparents is an integral part of a child’s upbringing which can provide a child with experiences that cannot be derived from other relationships. The loss of this relationship when a child is going through the distress of family separation is therefore devastating for that child.

If possible, the first step is to encourage your son to resolve his own contact arrangements as normally a grandparent’s contact can develop as part and parcel of those contact arrangements.

If this is not successful then you should try and talk with the children’s mother and explain to her that despite what might be going on between her and your son, your wish is only to maintain a relationship with your grandchildren and not to take sides.

However, if the relationship is too strained, then a referral to family mediation may be an option. This would require the agreement of all parties and would involve a series of meetings with an independent mediator who will help you to try and reach an agreement through structured negotiations.

Failing this, a child focused and amicable letter from a solicitor setting out why it is important for you to maintain your relationship with your grandchildren may be all that is needed to bring an agreement.

If none of the above lead to a resolution then an application to court for a Contact Order will be needed. Presently grandparents do not have an automatic right to apply for a Contact Order so you will have to apply for leave (permission) from the court to make the application. You will have to demonstrate that you have a meaningful connection with the children in order to be granted permission but this should not be a hurdle.

For more information please contact Andrew Kingston on 01635 521212 or andrew.kingston@clmlaw.co.uk.

Q My husband and I have fallen out of love and want to divorce.  We’re still good friends and no-one is to blame so can we agree to a ‘no-fault’ divorce?

A. Suzy Hamshaw, family lawyer, Charles Lucas & Marshall.

Suzy Hamshaw

Although the concept of ‘no-fault’ divorce was included in Part II of the Family Law Act 1996, that part of the Act was never brought into force and was recently repealed.  It had been intended that couples wishing to divorce should attend an information meeting (with a view to reconciliation being encouraged  where possible and where not, mediation to resolve issues) but if that didn’t change things then after filing a statement of marital breakdown and waiting for a period of reflection, the couple would be granted a divorce.

Despite its intention to promote reconciliation, the Family Law Act actually provoked an outcry that it was undermining the sanctity of marriage and making divorce too easy.

As a result we are, for the time being, left with the Matrimonial Causes Act 1973 which sets out the basis for divorce in England and Wales.  Contrary to common mistaken belief, grounds  for divorce is not ‘irreconcilable differences’ – it is ‘irretrievable breakdown of marriage’.

Irretrievable breakdown of marriage then has to be proved by one of five facts: adultery, unreasonable behaviour, two years separation where both parties consent, five years separation where consent is not necessary and finally, desertion.  So, to an extent I suppose,  we do have     ‘no fault’ divorce because where there is separation of two years or more (subject to consent), no-one needs to take the blame.

For many couples though who have come to the difficult but mutual decision that their marriage is at an end, two years can seem an unnecessary wait.  In those circumstances the only way to go ahead with a divorce sooner is for one party to be proved to be at fault in a petition based on unreasonable behaviour or adultery.  This however can lead to ‘mud slinging,’ moving us further away from, rather than closer to, a conciliatory approach to family law.

Speaking at the annual Resolution conference in Leeds last month, Sir Nicholas Wall, President of the Family Division claimed that divorce is now an “administrative” process rather than judicial and it was no longer important “to demonstrate you were the ‘innocent’  party”.

In practice, I regularly advise clients that (subject to certain exceptions concerning costs and the nature of the allegations of behaviour) it usually does not matter whether they are the petitioner or the respondent.

In a recent Court of Appeal case where the respondent, Susan Rae fought against her husband’s application for decree nisi, Lord Justice Thorpe said much the same thing as Sir Nicolas Wall.  In this case he felt it was counter-productive  that the minutiae of a 20 year marriage had to be raked over in such a painful way because divorce laws meant one spouse or the other must be shown to be at fault.  Mrs Rae was fighting the decree nisi on the basis that her having moved the television aerial, taken the fuse out of the washing machine and thrown away her husband’s food for his packed lunch should not be sufficient to end their marriage.

For further information contact Suzy Hamshaw at Charles Lucas & Marshall’s Newbury office on 01635 521212 or at the Hungerford office on 01488 682506 or e-mail her at suzy.hamshaw@clmlaw.co.uk

Q. I have separated from my partner and the father of our 10 year old son. I wish to return to live and work near my family in Ireland.   What do I need to do?

A. Suzy Hamshaw, family lawyer at Charles Lucas & Marshall

Regions of Ireland

The first question to consider is whether your son’s father has parental responsibility for him.  If you were married, entered into a parental responsibility agreement or if there is a Court order for parental responsibility then he will have parental responsibility.  His name being on the birth certificate will not be enough as your son was born before 2003.  

Any decision to emigrate or ‘remove a child permanently from the jurisdiction’ should be made jointly by those with parental responsibility and in any event your son’s father’s consent should be sought.  If he agrees then it would be sensible to record that consent in writing before making arrangements.  If he does not agree and you wish to go ahead with the planned move then, assuming he has parental responsibility, you will need to consider making an application to the Court under The Children Act 1989 for leave to permanently remove your son from the jurisdiction of England and Wales.

Your partner may also choose to make an application for a prohibited steps order to prevent you from removing your son and possibly a residence order should he wish for your son to live with him in the event of you moving.

If residence is in dispute the Court will deal with this aspect first and the approach will differ to a situation where you are the clear primary carer.  In all cases the Court will give paramount consideration to your son’s welfare.  The Court will also give consideration to the whole of the period of your son’s dependence and not just the immediate future.

The Court will consider the reason for the application and your desire to emigrate. A move for compelling reasons such as employment, family etc may be viewed differently to one simply made as a ‘lifestyle’ choice.  The reasonableness of the proposed move must be considered alongside the effect of the application being refused.

The circumstances of the proposed move will also be considered such as living conditions and financial implications and as your son is 10 years old the Court is likely to give significant weight to his wishes and feelings.

The effect of the proposed move on your son’s contact with his father will be important as will be the impact on their relationship.  In this respect much might depend on the arrangements for residence and contact you currently have and to what extent you share the care of your son.

Applications to the Court of this nature can be costly and complex and need to be thoroughly and properly thought through and prepared.  In any situation, before Court proceedings are contemplated, it is always sensible to consider other ways in which you might try to reach agreement such as attending mediation or by using  collaborative law.

For further information contact Suzy Hamshaw at Charles Lucas & Marshall’s Newbury office on 01635 521212 or at the Hungerford office on 01488 682506 or e-mail her at suzy.hamshaw@clmlaw.co.uk

Q. I bought my house nine years ago with my partner but we split up five years later. I now want to sell it but my ex-partner says he is entitled to 50 per cent of the sale even though he has not contributed a penny towards the mortgage in the last four years. What is he entitled to?

You could have avoided this dispute by taking proper legal advice either when you set up home together or when you separated. So often arrangements between couples are founded on “trust” and there is a reluctance to incur legal fees in documenting transactions. However, it is usually in the interests of all parties that steps are taken to avoid the potential for costly litigation further down the line.

Ideally, you should have tried to come to an arrangement with your partner to transfer the property into your sole name when you split up and agreed what amount of money he was entitled to for his share of the property at that point. Perhaps, financially, you were not in a position to do this.

So what can you do now? Where the property is jointly owned, there will be a presumption of joint beneficial ownership unless there is an express declaration otherwise. In joint names cases, the presumption is difficult to rebut but it can be done by demonstrating that the parties had a different common intention as to their share of the property,  either at the time the property was bought or later.

The case of Kernott v Jones decided by the Supreme Court in November 2011 upheld an earlier decision that joint owner Mr Kernott was entitled to only 10 per cent of the property, based upon the parties’ common intention changing following their separation. This decision has been welcomed by family lawyers because it gives more clarity about property division for those living together.

As a law firm, we see many cases such as yours. The good news for you is that there is a growing willingness of the courts to get away from the rigidity of the default position of 50/50 and to use powers to adjust property shares based on evidence of what must havebeen intended by people’s conduct after the acquisition of the property.

It is always difficult to find good evidence to make this apportionment because ‘what happens if it goes wrong’ is usually a million miles away from what the parties are thinking about when they are ‘starry- eyed’ about a ‘permanent’ relationship. This is why there are good reasons to get advice both before you set up home with someone and/or at the time of a break up because things might not be quite as you think.

For further information contact Suzy Hamshaw on 01488 682506 or suzy.hamshaw@clmlaw.co.uk

Suzy Hamshaw, a family lawyer with Charles Lucas & Marshall reports on the rise of cohabitation agreements and argues that even though they are far from perfect, they do give a couple some protection if their relationship breaks down.

I have prepared a large number of cohabitation agreements in recent months and I expect this trend to continue. Given that marriage rates are apparently at their lowest since 1895, it may not seem all that surprising.

However, despite the undoubted popularity of cohabitation, the law, as yet, has failed to keep pace with this choice.

When things go wrong they are at the mercy of property law and the Trusts of Land and Appointment of Trustees Act, 1996, succession law and the Inheritance (Provision for family and Dependants) Act, 1975. If children are involved, the Child Support Agency and the Children Act, 1989 will come into play.

This can result in separate claims being brought in relation to property and children with property being strictly dealt with on the basis of trusts. Contrast this with the list of factors that a court can take into account when dealing with financial claims on divorce under the Matrimonial Causes Act 1975 and the wide discretion of the court hearing the case.

However, it is possible for those planning to live together to formalise their arrangements and enter into a cohabitation agreement.  While not perfect, this will go some way to protecting the couple in the event of a relationship breakdown. To be of any use, it is essential that a cohabitation agreement complies with the requirements of contract law and in this respect the agreement must:

• Make it clear that there was an intention to create a legal relationship
• Be entered into freely by each party without duress from the other
• Be precise
• Not be contrary to public policy or oust the jurisdiction of the court

Therefore, an increase in cohabitation agreements is welcome and I hope is perhaps evidence of a greater understanding of the vulnerabilities of the cohabitee.  Unfortunately a worrying percentage of people living together still believe that they are a ‘common law’ spouse and protected in some way despite the fact that common law marriage hasn’t existed in England and Wales since 1753!

So, is reform likely?  In 2007 the Law Commission recommended that cohabitants should be given rights to financial relief at the end of a relationship to ’provide economically vulnerable members of society with the private means to rebuild their lives and to ensure a fairer division of assets on relationship breakdown and to ensure that the pluses and minuses of the relationship were fairly shared between the couple.’

However these recommendations have not been acted on. In 2009 the Cohabitation Bill did not proceed beyond the House of Lords.  It appears therefore that the vulnerability of the cohabitee will remain for the time being at least

On a more positive note, for those cohabiting as a prelude to marriage, the Office for National statistics has good news. The figures suggest that the key to a strong marriage is to live together first.  Perhaps this is one of the reasons for recent divorce rates showing a decrease.

For further information contact Suzy Hamshaw on 01635 521212 or suzy.hamshaw@clmlaw.co.uk

Michael Berrett is a partner with solicitors, Charles Lucas & Marshall, specialising in family law and is also an assistant Anglican Priest working in the Diocese of Oxford. His two roles mean he sees marriage from very distinct perspectives.

The Advantages of Marriage

When the parties have been married, the Court has powers to make orders to deal with their property and their finances so as to try to ensure ‘fairness.’  Fairness does not relate so much as to who brought which assets into the marriage but as to what would be a fair footing to enable the parties to ‘move on.’

Where couples are not married the Court’s powers to bring about this fairness platform are substantially less.  For example, if the mother of a child not in a married relationship has opted out of the employment market in order to bring up a family and to be a homemaker for a while, this is less likely to attract recognition financially than if the parties had been married.

There is also an innate reluctance in the Courts to recognise the effect of ‘Pre-Nuptial Agreements.’ These have become fashionable in trying to engineer what might happen should a marriage break – even before the vows are taken!  These agreements try to restrict the Court’s powers and set the parties on the fairest footings they can at the time of break down.

Our legal definition of what constitutes a marriage comes from a very early period in our history.  It must be formed on mutual vows between a man and a woman to be committed to each other for life and to the exclusion of all others.  It is interesting to note that when civil partnerships were created by Parliament there is no such life time requirement nor is unfaithfulness a specific ground for the dissolution of a civil partnership.

There is no doubt that marriage is therefore a unique and demanding concept.  The intention of both parties when it is formed is that it must be life-long and monogamous.

Monogamous and life-long marriage is not an exclusively Christian concept but in the Christian tradition the imagery associated with marriage is that of the commitment of the creator to his creation.  It is indissoluble bond based on a relationship rather than on subjection and domination.  The word used in the Jewish scriptures is ‘covenant.’  Such a relationship creates a lasting sense of belonging.  Belonging and knowing that we are uniquely valued is a quality that many seek and find elusive in our society.

While those who opt for marriage are perhaps thought brave or optimistic, it calls them to a relationship of greater commitment and trust than any other.

Michael Berrett can be contacted on 01235 771234 or michael.berrett@clmlaw.co.uk