Divorce and Financial Resolutions - The Process

With divorce rates on the rise again, most likely due to the financial pressures that most of us now live under, more and more people are not only facing the prospect of being divorced but the convoluted machinations of the divorce process itself. Often the two messiest and most contentious issues that couples need to resolve in any divorce case are the custody of the children and the division of finances. This article looks more closely at the second of these but of course all issues are intertwined.

To understand how financial disputes can be resolved it is useful to begin by looking at the broader divorce procedures. Despite the fact that divorce is far more socially acceptable these days, the judicial process still requires that one party in a marriage is deemed ‘at fault’ for the breakdown in the marriage and so to instigate a divorce an individual must complete a petition to the courts on the basis that their partner has committed adultery or unreasonable behaviour, or has deserted them for two years. Other grounds for divorce include a separation of over two years where both parties agree to it or five years of living apart. This petition is not only filed to the courts but forwarded to the other partner to sign and if all parties are in agreement, and if there are sufficient grounds for divorce, a judge will first grant a decree nisi . The decree nisi allows a 6 week window for objections to be raised, after which the prospective divorcees can apply for a decree absolute which confirms the divorce.

The granting of a divorce can be contested by either party involved but it is unusual for it to be overturned and therefore the majority of disputes that occur during the process are likely to be a result of conflict surrounding the distribution of finances and the arrangements and responsibilities towards children (often referred to colloquially as ‘access’). Where there are very few reasons for conflict, dispute or disagreement - in other words, there are no financial assets to split, there are no children involved or these issues have been resolved and agreed in advance of the case reaching court - then the case can be resolved as a summary divorce.

Where there are financial and custodial disputes to be resolved there are a number of different approaches that can be taken to reach (preferably) an agreement or a (at least) a decision on the issues. These approaches include legal negotiations, court rulings, family mediation and the new tactic of collaboration. Which route a couple takes needs to be decided early on in the proceedings so it is important to fully consider all of them at the outset.

Negotiations/Court Ruling
The traditional path that most people still take however is to pursue the case in court and then negotiate through their legal teams whilst the court proceedings are ongoing in an attempt to find a resolution which can be presented to the court, rather than relying on the judge to reach a conclusion. Each party’s lawyers correspond with each other’s on their behalf, representing their best interests, so that the two parties do not have to physically meet. If an agreement cannot be reached, the family court will make a discretionary decision based upon the evidence that they hear in regard to the financial aspects of each party and the marriage.

The framework for the judicial process involves:

• an initial application to the courts and subsequent provision of all relevant financial details and documents
• a First Directions Appointment (FDA) 12 weeks later to define the disputed issues and what needs to be done to resolve them
• a Financial Dispute Resolution appointment (FDR) where all parties attend to negotiate a resolution with suggestions from the judge
• a Final Hearing where a new judge will rule on the case if no agreements have been reached

An agreement through negotiation can be reached at or between any of these stages and presented to the court as a ‘consent order’.

Where agreements really are not feasible the full court process may be the only option but even when agreements can be presented to court the financial burden of communicated and operating through lawyers can be severe.

© Stuart Mitchell 2012
If you want to find out more about the most effective ways of resolving financial disputes during divorce proceedings then visit Family Law Solicitors London.

A Quick Guide to ‘Gay Marriage’ in the UK

A symbolic marriage cake in favor of allowing gay marriages in Italy not only to heterosexual couples but to lesbian and gay ones as well. Picture by Giovanni Dall'Orto, January 26 2008. (Photo credit: Wikipedia)

The topic of same-sex marriage, or gay marriage as it is more colloquially referred to, is very much on the public agenda following President Barack Obama’s recent public backing for its legalisation and the current consultation being carried out here in the UK by the coalition government. It is therefore an apposite time perhaps to take a look at the status of same-sex unions in the UK.

The Legality of ‘Gay Marriage’
Gay marriage is still not legally recognised in the UK, whether it be a civil gay marriage or a religious one. There is currently no circumstance in which members of the same gender can be legally married, even if one member of the partnership has undergone gender change. The incumbent coalition government have pledged to investigate legalising gay marriage for England and Wales before the next general election and as mentioned above there is an ongoing consultation process to achieve this; as there is in Scotland under the Scottish National Party’s leadership. The political and social landscape is fast evolving on the issue with the Conservative and Labour parties joining the Liberal Democrats in supporting its legalisation since the last election, seemingly reflecting increasing public support for the idea. As a result it looks increasingly likely that civil gay marriages will be legally recognised across the UK within the next couple of years.

Until then the only option open to same-sex couples looking to formalise their relationships is that of civil partnerships.

Civil Partnerships
Civil partnerships have been in place in the UK since 2005 allowing same-sex couples to obtain the same legal recognition that mixed sex marriages benefit from. They have, however, been kept legally distinct from marriage and cannot be referred to in any context using the term “marriage” (although they often are colloquially). Even individuals undergoing gender changes are required to dissolve their marriage before doing so, as mentioned above, although they are given dispensation to enter a civil partnership the same day.

Couples in a civil partnership therefore enjoy the same legal rights and responsibilities bestowed upon each member of the union as those in both civil and religious marriages. These incorporate the financial implications surrounding tax (including inheritance tax exemptions) and the calculation of benefit entitlements and pensions, in addition to the fact that same-sex civil partners enjoy the same property rights as married couples, recognition in life assurance policies as well as the status of next of kin in, for example, medical scenarios. Moreover, the partner who is not the biological parent of a child in a civil partnership has the ability to apply for full parental responsibility akin to that of step parent in a marriage, whilst couples who are unable to have biological children also have the same rights as married couples to adopt (except in Norther Ireland).

There are further similarities between the concepts of marriage and civil partnership in regard to how individuals can enter into their union. With both, they must be over 16 years of age and cannot already be married or in a civil partnership at the time. Civil partnership ceremonies can even be conducted in religious venues although akin to civil marriages they can’t involve any religious elements (readings, music etc) during the ceremony itself.

What’s more, if a couple come to the stage where they wish to separate, although the process is not technically referred to as a divorce, instead a dissolution, it is a comparable process (barring the ability to use adultery as a sole reason for dissolution). As a consequence of the equivalent financial and legal entanglements involved with civil partnerships, those wishing to do so will need to resolve the same issues when they do dissolve their partnership and can be faced with the same responsibilities such as child maintenance going forward. Couples can even decide to draw up prenuptial agreements just as they would for a marriage to aid with these resolutions if the time comes.

All these similarities lead many to refer to civil partnerships as “marriages by any other name” and as is the case with conventional marriage any good family law firm should be able to guide you through the processes involved in entering into as well as dissolving a civil partnership in that eventuality.

© Stuart Mitchell 2012
If you want to find out more about the legal aspects of civil partnerships in the UK, including their dissolution, then you can visit Family Law Solicitors London.

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.