Divorce and Financial Resolutions - The Finances

Divorce (Photo credit: Wikipedia)

The previous articles in this series looked at the procedures and processes involved in reaching financial resolutions during divorce proceedings, as well the ways in which divorcing couples can work together to make the negotiations smoother, more productive and most importantly, more amicable. Having done so, the following article outlines the actual financial issues that need to be resolved and some of the decisions and agreements that can be arrived at.

Before taking any course of action both parties must fully disclose all of their financial details. to the court if necessary or to the other party during collaborative processes. Obtaining this information may involve the arrangement of valuations and some level of input from financial experts with the most obvious example of this being the need to value properties. The actions that will need to be taken to fully detail each party’s financial position will be determined either at the outset of mediation or collaboration or by the judge at the first court hearing.

The financial elements that have to be distributed at divorce are not just limited to shared assets such as property, possessions, investments and savings, but also shared debts, individual assets that have been accumulated during the relationship and even future earnings or income that have been impacted by the relationship and the input of the other party.

For financial disputes that end in court, judges will therefore, consider a myriad of different factors in order to achieve a fair distribution of assets, which will not necessarily equate to a fifty-fifty split. These factors can include not just the financial contributions and position of each party during and after the marriage but their physical inputs into the maintenance of the family unit and their responsibilities towards children and family going forward. In considering all of these factors courts and judges consequently have a large amount of discretion and so leaving financial disputes to the courts can introduce a significant degree of uncertainty for the couple. The best way of achieving a resolution in which the couple feel they have a degree of control is to follow either the of the mediation or collaboration routes.

When a decision or agreement is reached there are a number of ways in which individual assets can be distributed, whether they are liquidated (sold) with the proceeds split, assigned to one individual (maybe counterbalanced by another asset) or left in shared ownership. For example, a family home can be sold (with the sale monies distributed), assigned to one party if it is deemed that party has a need for a stable home in the immediate future (where children are involved especially) or can even remain in shared ownership with one partner keeping a silent share (again if there is a particular need to keep a child’s home life stable). Pensions, on the other hand, can be split with the partner being apportioned a slice of the pension fund, a lump sum payment or a share of its income payments.

Partners can even be ordered to make regular cash transfers from their income to reflect the contributions of the other party to their wealth (maintenance payments). For example a wife who made career sacrifices to support a family and her partner whilst her partner continued to progress in his career may be entitled to continue receiving a slice of the proceeds of that career progression. These payments can be set to run up until certain criteria are met such as until the receiver remarries, gets a job or their children leave home. Conversely, a decision or agreement which frees both parties from any such financial responsibility to each other, regardless of their future wealth and changes in circumstances, is called a clean break.

As mentioned above the most important factor to consider in divorce resolutions is the welfare of children and ultimately the best way of ensuring that they receive the most advantageous outcome from a distressing process is usually to take the more empowered, collaborative and amicable routes of mediation or collaboration. Doing so can encourage couples to reach agreements, as opposed to enforced decisions, and get there with more of their wealth intact to invest in their children’s futures.

© Stuart Mitchell 2012
If you want to find out more about the most effective ways of resolving financial disputes during divorce proceedings then visit Solicitors London or if you are interested in how to better spend your money on your child’s future visit Junior ISA.

Key Marriage and Divorce Terms Explained

Portrait of Henry VIII (Photo credit: Wikipedia)

For couples entering into marriage as well those coming out the other side, emotions run high for contrasting reasons, however it is always worth getting to grips with a few key legal concepts to make the transitions smoother.

Mediated & Collaborative Divorces
A particularly expanding side of divorce law and procedure is the area of mediated and collaborative divorces. These processes aim to ensure that conflict and hostility are removed from divorce (for the sake of the individuals involved and their families) and that the parties concerned work together as much as possible to achieve an outcome that suits each as far as possible. The techniques both use open channels of communication between the parties to minimise misunderstandings and promote co-operation.

Collaborative divorce processes involve the parties sitting around a table together (figuratively or literally) with representative lawyers, neutral financial experts and all relevant information in an attempt to find agreement without the need for a court hearing. If a resolution is not found and the case goes to court, neither can the discussions that occur during the process be used in court or the lawyers involved go on to represent either of the parties.

Mediated divorce is similar to collaborative divorce but occurs during a court hearing. It employs an impartial lawyer as a facilitator who acts as a go-between throughout the hearing to ensure that there is an open channel of communication and that negotiations have structure and feasible goals.

Pre-Nuptial Agreement (Prenup)
Otherwise known as an antenuptial or premarital agreement, a prenup is an increasingly popular agreement sought by couples entering into marriage to ensure a pre-agreed and smooth division of their assets in case of divorce. These ‘contracts’ are used traditionally in Jewish and Islamic law and are legally recognised in some continental European countries where they can be binding regardless of events leading to the divorce. In the US, however, they are not legally binding although they can be taken into account as an indication of each party’s intent as they entered into the marriage; whilst in the UK, prenups have only very recently been acknowledged as having a (limited) potential to influence divorce outcomes in certain circumstances.

Annulment
In contrast to a divorce, which is the dissolution of a valid marriage, an annulment is the ruling that a marriage is null and void. In other words the marriage was never legally valid in the first place (void ad initio) and so can be considered to have never existed as a valid legal state at all.

Annulments can be sought and granted if either party in a marriage was not in possession of all relevant information and free will when consenting to the marriage, or was not legally entitled to marry. Reasons can include duress, insanity or deception at the point of consent, as well as polygamy (the taking of multiple spouses) by either party or the individuals being closely related. Despite the fact that annulment renders a marriage invalid for its duration, children born in a marriage which is subsequently annulled can still be deemed as legitimate, depending on the jurisdiction involved (as is the case for the example in US).

Historically, annulments were commonplace under the Catholic Church where a valid marriage is a contract for life and so the only way for a marriage to be dissolved is to determine that it was never valid in the first place. This leads to the interesting contradiction that Henry VIII didn’t technically have six wives as is common wisdom. As three marriages were annulled he can be said, in legal sense, to have only had three.

© Stuart Mitchell 2012
If you want to find out more about the advice available to you through a divorce and live in the south of the UK then you can visit here.

The Systems of Education in the UK - Scottish & NI Year Groups

Having previously looked at the structure of the school years within England and Wales the following article covers the equivalent structures across both Scotland and Northern Ireland with each following their own systems.

Northern Ireland
The school year system in Northern Ireland broadly follows the same core structure as the English/Welsh system and therefore is not as distinct as that of the Scots, although there are still few features which set it apart.

Each of the UK’s systems have a cut off date at which the child’s age determines the year group in which they are to join. Across the Irish Sea this date is 1 September, the start of the school year, however in Northern Ireland it is 1st July (c.f. 1 March in Scotland). Although the Northern Irish school year also begins in practice on 1 September, it effectively runs from July to July with the summer holidays covering the months of July and August.

Primary school years are referred to as Primary 1 through to Primary 7 (rather than using the English terminology incorporating Reception) and therefore year numbering is comparatively one ahead of the English system, with, for example Year 7 in England being equivalent to Year 8 in Northern Ireland. In many secondary schools, however, the colloquial ‘form’ naming convention is still used to refer to the year groups with the ‘first’ to ‘fifth forms’ and ‘lower’ and ‘upper sixth’.

• Primary School/Education
• Ages 4/5 to 10/11
• Primary 1 to 7
• Secondary School/Education
• Ages 11/12 to 17/18
• Years 8 to 14

The primary and secondary stages are again split into Key Stages which are broadly consistent with the English system although the Foundation Key Stage 1 and Key Stage 2 stages both start a year behind their English equivalents.

• Foundation Stages - Primary 1 & 2 (ages 4 to 6)
• Key Stage 1 - Primary 3 & 4 (ages 6 to 8)
• Key Stage 2 - Primary 5 to 7 (ages 8 to 11)
• Key Stage 3 - Years 8 to 10 (ages 11 to 14)
• Key Stage 4 - Years 11 & 12 (ages 14 to 16, ending in GCSEs)
• Sixth Form/College - Years 13 & 14 (ages 16 to 18, ending in A Levels or International Baccalaureate)

Scotland
As the governance of the Scottish Education system sits with the Scottish Parliament and outside of the control of Westminster, the school year system in Scotland differs considerable from those of England, Wales and Northern Ireland; from the structure of the school year groups to the process involved in determining each year’s first intake.

Although the school year in Scotland runs August to August, the date at which a child’s age is measured has been separated from these dates and instead the mid point, 1 March, is used. All children must start school in Aug regardless of when their birthday is in contrast with the structure south of the border. However, under this system children who turn 5 years of age between 1 March and 31 July will begin their education in the coming August alongside children who are due to turn 5 between the following 1 August and 28/29 February. Therefore, all children starting their first year of primary school should fall in the age range 4 ½ to 5 ½, with Spring-Summer borns aged 5 to 5 ½ and Autumn-Winter borns aged 4 ½ to 5.

However, this intake is flexible and so children born in January and February who would only be just over 4 ½ at the start of the school year can be held back in nursery for an extra year if the parent wishes, whilst it is also possible, although not guaranteed, to request a delay for those born in the three months preceding that. Prior to their Primary education children have access to Nursery as soon as they turn 3 years of age.

Akin to the naming convention in Northern Ireland (and contrary to England & Wales), Scottish primary school years are referred to as Primary 1 to Primary 7, however, the numbering begins again in secondary school with S1 to S6 year groups:

• Primary School/Education
• Ages 4/5 to 10/11
• Primary 1 to 7
• Secondary School/Education
• Ages 11/12 to 17/18
• S1 to S6 (S5 & S6 are optional)

Due to the variation of ages in particular year groups and the fact that children take their Higher exams in S5 which can qualify them for University, some leave secondary school at this point although most remain for S6 and take their Advanced Highers before progressing.

Most Secondary Schools are variably referred to as High Schools or Academies with a few referred to as Grammar schools (although this term carries no practical meaning), colleges or simply Secondary Schools. A few schools in more remote areas provide education through both the primary and secondary levels, either up to S4 known as Junior Schools, or in entirety, simply known as Schools. However, there are also a handful of privately run schools in Scotland which sit outside of this structure and instead follow the English system.

© Stuart Mitchell 2012
If you want to find out more about systems of education in the UK, particularly if your school is considering academy status then visit Academy Conversion.

Basic Tips for Storing Wine Successfully

This is but one of the racks of wine in the restaurant. There were three of these in the room we were in. I think they were mostly French wine. Bistro Vue 430 Little Collins St Melbourne 3000 (03) 9691 3838 (Photo credit: Wikipedia)

The world of wine and wine collecting can be perceived as an esoteric world of nuanced bouquets and rare vintages but beyond the collectors many of us regularly drink wine and often have a few bottles lying around in the home. If you have ever opened a bottle and found it to be spoilt then you may want to keep in mind a few basic, easy to remember, storage tips which all of us can benefit from whether we have are own cellar of vintages or a couple of bottles in a cupboard.

Temperature
The rule of thumb regarding temperature is to keep it cool but if you are keeping a variety of wines in one location your ideal ambient temperature will be around 12-13°C. Higher temperatures will cause the wine to age prematurely and if a wine approaches temperatures of 24°C then it will start to oxidise significantly. What’s more, high temperatures will make the wine itself expand and potentially leak through the cork.

If you are using natural conditions to regulate the ambient temperature you’ll need to be careful to avoid significant fluctuations in that temperature, even when you’re still within your minimum and maximum levels. Fluctuations cause the pressures within and without the bottle to differ and this differential causes excessive air flow through the cork which can again oxidise the wine. This is a common cause of spoiling when wine is stored in a location such as kitchen where the temperature regularly rises and falls. Ideally the extent to which temperature should be allowed to change would be 1.5°C a day or just under 3°C across a year.

Humidity
Humidity should be kept fairly high to prevent the cork from drying out. A dry cork will allow too much air into the bottle and therefore too much oxygen which reacts with the wine to oxidise and spoil it. However, it is also important not to store wine in excessively moist conditions because it may cause mold and rot and so you should aim for a humidity level at around 70%.

Light
Light, especially bright light, will affect the aging and degradation of the wine and so should be kept to a bare minimum. Red wines will tend to lighten whilst white wines darken in the presence of light and (particularly Champagnes) can be affected by what is known as lightstruck whereby the wine is spoilt by the presence of Sulphur compounds. Specifically it is the ultraviolet element of light that affects the wine so if you do need lighting it is preferable to use artificial low UV lighting if possible.

Odours
The fact that wines can breathe means that they can also absorb odours from their environment and integrate them into their flavour. You should therefore be careful to ensure that they are stored in odourless settings although if that involves ventilation you’ll need to remember the effect this may have in turn on the temperature and humidity of your environment.

Position
Wine bottles which use a cork should always be stored on their side or at a slight angle to ensure that the wine remains in contact with the cork. By doing so it prevents the cork from drying out as it would if it were stored upright. A dried out cork, as mentioned above will allow too much air to permeate the cork and therefore oxidises the wine.

For screw cap wines it can be argued that they benefit (in the absence of a porous cork) from being stored upright as this reduce the surface area of the wine that is exposed to air and may slow down the aging process.

Movement
Although there is little empirical evidence for the spoiling of wine through movement it is advised by experienced wine collectors to avoid movement and even vibrations (e.g., from heavy traffic) as much as possible as it may be a contributing factor to premature aging.

Time
It is a myth that all wines will continue to mature with time. Different wines have different optimum maturing periods and as a rule of thumb new world wines are likely to only mature and keep for 2 or 3 years, as are relatively inexpensive wines. Beyond that it will vary from one wine to the next depending on factors such as the grape variety and the chemical constituents of the wine (tannins, sugars, acids).

With these tips in mind you really can ensure you are storing wine successfully and minimising the chances of it spoiling, whether you are lucky enough to have a cellar in your house, you invest in a cooler or you simply use a cool dry cupboard under the stairs.

© Stuart Mitchell 2012

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