Day: April 20, 2017

Divorce Process Overview

The divorce process: A marriage is dissolved by a decree of divorce which is pronounced after one party has filed a Divorce Petition in the English Court which asserts the irretrievable breakdown of marriage. This has to be proved by one of five grounds, these are:

• Adultery,
• Unreasonable behaviour
• Two Years Desertion
• Two Years Separation by Consent
• Five Years Separation.

The grounds most often used are Unreasonable Behaviour or Adultery.

Once Divorce Proceedings are underway the Court has power to make financial orders against each party, provided that an Application is made to Court, this is another part of the divorce process.

Financial Matters and Divorce

The principal statute is the Matrimonial Causes Act 1973.  Sections 23 and 24 establish the Court’s range of powers which are:  lump sum orders, property adjustment orders, periodical payments orders (maintenance orders) pension  orders, orders for sale of property and the division of the proceeds, variation of trusts.

Clearly some of these powers relate to income provision and some to capital provision.  In a normal middle asset case an award might be a mixture of both types of order, but in a high asset case the award will generally be just for capital.   The Court only has power to make orders against the husband and wife, not third parties.

When the Court considers making an order it must take into account Section 25 of the Matrimonial Causes Act 1973, namely:-

• Interests of the children paramount
• Age of the parties
• Capital and income resources
• Capital and income needs and obligations
• Standard of living during the marriage
• Physical or mental disability
• Contributions to the welfare of the family made during the marriage or in the future
• Misconduct (This is very rarely applied)
• Value of lost benefits because of divorce
• The need, if possible without hardship, to achieve a financial clean break between the parties
• All of the circumstances of the case

The above points tell the court what to take into account but they do not say how or what the objective for the Judge should be.  The final decision for the Judge as to the award he or she makes is discretionary.  The above points are not in order of priority but in some cases one factor will be more important than another.

THE LEADING CASES ARE:  WHITE –v- WHITE (2001)  MILLER –v- MILLER and McFARLANE –v- McFARLANE (joint appeals) (2006)  CHARMAN –v- CHARMAN (2007) and RADMACHER –v- GRANATINO (2010)

From the above cases the following principles have arisen

• The Court will take into account all of the parties resources, valued realistically in the event that the case proceeds to trial and is not settled the Court will be looking at the valuations as at the date of trial.
• The resources will be distributed between the parties fairly.

Fairness has three strands, meeting the parties needs, sharing and compensation.

Needs

To ascertain and meeting the parties needs is the basis upon which the majority of cases are determined.   When assessing needs the Court will look at the resources and the standard of  living of the parties  during the marriage and the length of the marriage.  The needs of both parties to the marriage are very important.

The main needs are for housing and income.  Due to the breakdown of the marriage and the parties requiring separate homes.    It is unlikely that the housing need will be at the same level as the matrimonial home.  It can be however, if there are high assets.

The income needs will be assessed by reference to a claimed list of expenditure and to the marital standard of living.  Ridiculous claims will not be taken into account.  The Court can order periodical payments for maintenance and may order a lump sum payment of money.

The Court will decide if the income provision should be for the whole life or for some shorter period (a term:  the length of the marriage,  a period of time to give the other party time to re-establish their career,   when the children cease full-time education or such term as ordered by the Court).

Compensation

Rarely used as needs are usually used.

Sharing

If the total capital resources exceeds the sum required to meet the needs of both parties, the Court will consider sharing the rest unless the wealth has come from an inheritance or from funds of the parties prior to the marriage.    With inherited wealth the Court usually look to the party who received the Inheritance retaining it but should there  be a need it will be used in the financial settlement.

The essential rule is that wealth built up during the marriage should be shared equally irrespective of the roles of the parties, whether money-making or home-making. To do otherwise would be discriminatory and unlawful. The wealth for sharing is called The Matrimonial Property.

Non Matrimonial Property

This consists of wealth brought into the marriage by one party or wealth inherited during the marriage or to a lesser extent wealth generated after the parties separation

Non Matrimonial Property is not completely excluded.    It is completely included if it is needed to meet needs.  Also it may transform into matrimonial property over time if it is mingled or merged (especially over a long marriage).

Unequal sharing of matrimonial property can be ordered in very high asset cases if the Court finds the money maker has made a special contribution.

Resources

The Court will take into account all of the parties assets anywhere in the world and whether or not they are held in their own names or through another entity. Both parties must make full and frank disclosure of their resources and give documentary proof to prove their disclosure.  Failure to make full and frank disclosure may result in any settlement being set aside.

If you require assistance with the divorce process please do not hesitate to contact us here. We offer a free initial consultation to every new client, so get in touch today. 01753 486 777

Lynette A’Court

Head of Family Law