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Family

Are Expensive Weddings Linked to Divorce?
Wednesday 25th November 2015

A recent article published on Sky news highlights the apparent correlation found between big, lavish weddings and divorce. It appears that the bigger and more expensive the wedding, the more likely the marriage is to end rather soon thereafter. Whilst there are a number of potential reasons for this, the most common is that the more grandiose, over the top weddings represent partners’ unrealistic expectations of married life; that marriage will emulate the dream-like fairy tale wedding day which, of course is not the reality of how people live. Another reason may be that parents are living vicariously through their children and planning impressive weddings to showcase their lifestyles.

Wedding planner, Liesel Lamare advised couples to think carefully about their wedding budgets and not to enter married life in financial difficulty. However, Liesel opined that it is not how much you spend on your wedding that determines how happy your marriage is but the good foundation of the relationship.

In any event, the divorce figures from the Office of National Statistics released yesterday morning show that there were 126,616 divorces in 2013 in the UK, a fall of 29%. However, with the average wedding now costing more than £20,000 and almost half of all weddings ending in divorce, this means that around £2.8 billion is spent each year on weddings which will ultimately end in divorce.

The data released raised some further interesting statistics. The average duration of marriage for divorces granted in 2013 was 11.7 years, increasing slightly from 11.5 in 2012 with the average age of divorcees being 45.1 for men and 42.2 for women. Also, the number of marriages that reach the 15 year milestone have had fallen in 2013. The percentage of marriages ending in divorce by the 15th wedding anniversary was 32% in 1998 compared 20% in 1968.


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Footballer wins child maintenance appeal in the High Court
Wednesday 11th November 2015

Footballer wins child maintenance appeal in the High Court

A footballer has succeeded in his appeal to challenge the amount of child maintenance he pays for his two children.

The Family Court initially ordered that the footballer pay £60,000 a year in child support out of his £190,000 income, equivalent to about a third of his gross annual income and about half of his net income.

If a parent earns less than £156,000 per year then the Child Maintenance Service, rather than the court, assesses how much a parent should pay in child support.  In Child Maintenance Service assessments the rate of maintenance for two children is 16% on a gross income up to £41,600 and then 12% on the next £114,400 of gross income.  Accordingly the maximum assessment the CMS could have made against the footballer was about £20,000.  Even if the Child Maintenance Service could have awarded child support against all the player’s gross income the assessment would have come out at £24,500. So with the court set child support of £60,000 the player was paying an extra £35,000 a year and so he appealed.

The first judge was able to set child support at £60,000 a year as a court has the power to order ‘top-up maintenance’ for parents who earn more than £156,000 a year. The court is not restricted to the formula applied by the Child Maintenance Service when deciding on how much child support should be paid.

On appeal, the High Court said the method of calculation used by the Child Maintenance Service should be the starting point of any child support calculation and agreed that child support totalling a third of the player’s gross income was too high without a proper explanation of how it had been calculated.

The case does not end at the High Court as the appeal court did not decide how much the footballer should pay but instead referred the application back to the original Court for another hearing to decide on the level of child support.  In the meantime, the footballer was ordered to make payments of £30,000 a year in child support whilst the court proceedings are ongoing.

The footballer, who is age 32, was described as being in ‘the autumn of his career’ with the expectation that his income would rapidly and naturally tail off.  The report does not reveal how much has been spent in legal costs in appealing the court decision but when acting for professional sportsmen or their former partners it is always crucial to factor in the costs of court proceedings and the benefits to be gained by court litigation. In too many situations a player can win the case but score an ‘own goal’ if the legal costs exceed the amount that child support is reduced by over the footballer’s remaining years of high income.

For advice on any aspect of family law please contact Leanne Instrall on 0161 836 8916 or by e-mail at leanne.instrall@brabners.com.


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Never too old...........to divorce?
Tuesday 10th November 2015

The BBC news have today produced a piece on what has become known as “grey” or “silver” divorces, or as they have coined it, “the silver splitters”.

 As the BBC point out in their article divorce rates for the over 60’s have been rising since the 1990’s. This is despite the fact that divorce rates have been falling in other age groups (save for a slight rise in 2012). In 2011 nearly 9,500 men over 60 divorced, which was a rise of almost three quarters in 20 years, with a similar rate being seen amongst women.

 Whilst there has been much speculation over the reasons behind the statistics as family lawyers we observe that the key factors appear to be:

  •  The removal of the social stigma of separation and divorce: This has allowed people who in younger years could not have contemplated divorce to feel they can take steps to make a new life for themselves. There has also been an increase in the acceptability of re-marriage. The rise in re-marriage and the frequency of third marriages has affected the statistical age of marriage as the Office for National Statistic figures do not distinguish between first or subsequent marriages.
  • Longer life expectancy and improved health in retirement result in couples re-evaluating whether they want to spend their retirement in an unsatisfactory relationship. A generation ago there was no concept of “the right to be happy” which now pervades society.
  • The empty nest syndrome: with the end of caring responsibilities for children or parents many couples drift apart as there is no longer the caring demands or financial imperatives, such as paying for school or university fees, to cement the relationship.
  • The greater financial independence of women through careers resulting in women considering that they have the financial ability to separate.
  • The increased sophistication of couples who are aware of the inheritance tax advantages of later life re-marriage and a willingness to contemplate re-marriage with the security of a prenuptial agreement in place to preserve pre-marriage acquired assets. 

In the BBC article today we saw examples given which touch on a number of these factors.

It is worth noting that divorce later on in life can have significant financial consequences. If for example a couple separate in their early thirties they still have thirty or forty years to rebuild their pension pot and plan for self-sufficiency in retirement. Sadly that is unlikely to be a realistic option if a couple are separating in their late fifties or later still. With later life divorce often comes the economic consequence of needing to defer retirement plans as there is insufficient capital to re-house in two homes and provide adequate income in retirement. Careful consideration and advice from a family lawyer and financial advisor is therefore often vital.

 

 

 


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A Brabners star is born
Tuesday 3rd November 2015

The Brabners family law department is proud to announce that the newest addition to our team in the Manchester office, Joanne Radcliff, has been ranked as a ‘Star Associate’ in the North West by the Chambers & Partners 2016 guide to the leading lawyers in the UK. The guide notes that Joanne has a “good strategic brain” and praises her “very practical, realistic advice”.

The Brabners family law team is recognised and ranked by the Guide overall, as are the Partners in both our Liverpool and Manchester offices, Helen Marriott and Paula Milburn. Joanne’s individual addition to the guide continues the growth and development of the family law team in Manchester and reflects the high quality of advice and representation we provide.

Joanne can be contacted by telephone on 0161 836 8927 or by email at joanne.radcliff@brabners.com


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Why honesty does turn out to be the best policy...
Wednesday 14th October 2015

Today saw the long anticipated judgments of the Supreme Court in two family law cases, which will have significant implications in cases where spouses fail to reveal information and be open about their true financial position.

In the case of Sharland v Sharland the husband and wife had both given evidence at a final hearing relating to their finances. However, they were able to reach an agreement during the course of the hearing and as a result prepared a Consent Order (a document recording the agreement), which was approved by the Judge. Subsequently the wife discovered that the husband had failed to disclose that he had been holding discussions with various investment bankers in readiness for an initial public offering (IPO) of the company in which he had a two thirds interest. This went against the Husband’s evidence. It was argued that the IPO could increase the value placed on the company by potentially hundreds of millions of pounds.

As a result the wife’s solicitors made an urgent application to the court to ask that the Consent Order not be finalised by the court (which is done by the court placing a seal on the final and typed version).  The wife instead applied for the hearing of her claim to be resumed, on the basis that her agreement to the Consent Order had been obtained by fraudulent non-disclosure on the part of the husband. Her application was unsuccessful both with the Judge dealing with the matter and the Court of Appeal. She therefore appealed again to the Supreme Court who have now upheld that appeal. They took the view that the husband’s non-disclosure had undermined the basis of the valuations of the company which had been obtained. The wife had been deprived of a full and fair hearing of her claim. As a result the Consent Order will not be sealed and the case has been sent back to the High Court, where consideration of the parties’ finances will continue. 

The second case Gohil v Gohil related to a financial claim made by the wife in 2004 which was also concluded by way of a Consent Order. The wife applied to set aside the Consent Order in 2007, when she became aware that the husband had failed to disclose the true extent of his financial assets.  The husband was subsequently convicted of money laundering and after a lengthy investigation and trial was committed to prison in 2011. The Supreme Court have now concluded that there had been material non-disclosure by the husband in 2004 and the wife’s claim should therefore proceed at this stage.

In financial remedy proceedings the parties owe a duty to make full and frank disclosure of all material facts to the other party and the court. If there has been material non-disclosure the court can set aside an order (even if made by agreement). Where there has been fraudulent non-disclosure the burden is on the person who failed to disclose the information (in these cases the husbands) to satisfy the court that the non-disclosure did not lead to a different agreement or order being made than otherwise would have been the case. If the so-called ‘fraudulent’ party cannot satisfy the court of this they will find that the courts will not hold their spouse to the Orders they have.


Varsha Gohil (L) and Alison Sharland previously had their cases rejected in the Court of Appeal - (Image © BBC)

 


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Varying a trust on divorce – how far do judges’ powers reach?
Tuesday 25th August 2015

Section 25 of the Matrimonial Causes Act 1973 grants the court the power to have regard to a wide range of factors when making a financial provision on divorce with section 24 (1) granting specific powers to deal with settlements.  But how extensive is this power and what are its limitations?

The recent case of P v P (Family Division) [2015], where the trustees of a family settlement sought to appeal a decision which provided for the variation of that trust to provide financial relief for the wife, tested the boundaries of this power.  This case concerned a husband and wife who, during the marriage, lived in a farmhouse which was then owned by the husband’s family.  The farmhouse then became the subject of a trust in 2009, three years after the parties had moved into the property, with the husband’s parents being the trustees and their children, including the husband, and remoter descendants being beneficiaries.  The parties had one child together.

The parties separated in 2012 and a decree nisi pronounced the following year.  On applying section 25 of the Matrimonial Causes Act 1973, the Judge found that the trust was a nuptial settlement and made an order varying the trust to provide that i) a sum of £23,000 was to be paid to the wife absolutely; and ii) a sum of £134,000 was to be provided for the benefit of the wife for life, to be held by independent trustees, with the wife entitled to use the capital sum income to purchase a property for her occupation and having the benefit of the income during her lifetime.

The trustees of the farmhouse appealed against the judges’ order.  At the time of the hearing, the husband had a new partner and two further children.  The wife also had a new partner.  The trustees argued that it had not been open to the judge to exercise his discretion in the way that he had.  They submitted that the order had failed to take account of the needs of the husband’s other children, the interest of the other beneficiaries under the trust, the intention of the settlor that the property would not be sold, the husband’s needs and the ability of the wife to provide for herself.  The trustee’s submitted that the judge had been in error in making an order which, given the trust had no other means to raise the sums required, would necessitate the sale of the farmhouse which was to be a home for the husband and his children.

The appeal was dismissed finding that the objective was a result that was fair to both sides and which did not interfere with the settlement more than was necessary to do justice between the parties.  The breadth of the discretion to vary a nuptial settlement is therefore considerable and includes the power to exclude a beneficiary entirely from the settlement and to transfer an asset to a non-beneficiary free from all trusts.

This case serves to highlight that parties cannot rely entirely on the existence of a trust to protect their assets or beneficial interest and that parties ought to seek legal advice. 


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The biggest names of the year
Tuesday 18th August 2015

The Office for National Statistics has this week revealed the most popular baby names of 2014.  There is little change at the top of the table with Oliver coming top of the list for boys for the second year running.  Amelia is the most popular name for girls, a position held since 2011.

What I find interesting is the impact of celebrities and popular culture on the results.  This is not a new phenomenon – names go in and out of fashion and I’ve heard a lot of people attribute their name to their parents’ favourite music artist/actor/model of the day!

So what popular culture has influenced this year’s results? Well, after Disney’s hugely successful animation ‘Frozen’ hit the big screen in December 2013, records show an increase in new born girls named ‘Elsa’. A total of 537 Elsa’s were born in 2014.  It would be interesting to know whether more Elsa’s were born after the 1966 classic film ‘Born Free’ was released.

It is not only the names of Disney princesses that have seen an increase in popularity. Perhaps unsurprisingly, George is now the seventh most popular name for boys (up three places on the previous year).  I wonder how many Charlotte’s will be born in the next year, after the birth of Princess Charlotte in May 2015.

The names of many female celebrities and their children have also seen a rise in popularity.  The first names of the Kardashian’s have steadily increased in popularity in England and Wales over the past few years.  Harper, the name given to David Beckham’s daughter, is now the 89th most popular girls name and names that feature in the top 10 include Ava (the name of Reese Witherspoon’s daughter) and Poppy (the name of Jamie Oliver’s daughter).

I can also report that ‘Leanne’ came in at 1299th place with only 25 Leanne’s being born in 2014!  To take a look at how many 2014 new borns share your name, you can download the statistics from the ONS (http://www.ons.gov.uk/ons/publications/re-reference-tables.html?edition=tcm%3A77-370365).

In addition to names of famous idols, many children are also named after relatives.  Some parents find this problematic if they separated shortly after a child’s birth and a child’s name is the same as an ex-in-law or a film or a celebrity that they never really liked.  Parents can disagree about what name a child should go by, with some preferring to use a child’s middle name over the first given name.   

As family lawyers, parents often ask us whether it is possible for one parent to change a child’s name (ordinarily their surname).  A parent who wants to change the name of their child must have the permission of all those who have parental responsibility for the child or, if not, a court order permitting the child’s name to be changed (known as a Specific Issue Order).  It is rare for the court to order that a child’s surname may be changed and very unusual to change a child’s first name.  However, if a parent wants to stop the other parent from changing a child’s name they can make an application to the court for a Prohibited Steps Order.  Prohibited Steps Orders restrict a person from taking certain steps, including changing a child’s name, changing a child’s school or relocating with a child.

For advice on any aspect of family law please contact Leanne Instrall on 0161 836 8916 or by e-mail at leanne.instrall@brabners.com.


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Death and divorce - the family court provides a solution to ex-husband's decision to cut his children out of his will
Wednesday 29th July 2015

Hot on the heels of the widely reported  case of Mrs IIIot, who through court proceedings secured a third of her late mother’s estate in spite her mother making a will leaving her estate to charity, a case has today been reported on the family court trying to sort out family inheritances.

The circumstances are both tragic and unusual in that the family court was asked to look again at a financial settlement awarded to an ex-husband. Within a month of getting the divorce court order awarding him 17.34 million of his heiress ex-wife's fortune the ex-husband took his own life leaving behind three young children. The husband's will left most of his money to his brothers, presumably as he thought his children would be well cared for through his ex-wife’s wealth.

Perhaps understandably, given the 17.34 million had been provided to the ex-husband to meet his needs, taking into account the lifestyle enjoyed during the marriage and the need for the children to have a suitable home with their father, the ex-wife appealed against the family court order. In the past these types of appeal have not been successful unless an event has occurred after the date of a financial award that was not foreseeable. Sadly death, property crashes and company failures are all normally thought to be ‘foreseeable’, even if not anticipated by either party to the marriage at the time of family financial court proceedings.

The court decided that the late husband's award should be reduced from the 17.34 million to 5 million. This means that the trustees of the ex-husband’s estate will need to repay the wife about 3.6 million as the wife had paid her ex-husband just over 8.6 million of the 17.34 million lump sum court order.

In coming to his decision the judge reduced the original award to what he judged would have been provided to the ex-husband if it had been known at the time of the family court order that the ex-husband would die within weeks of the 17.34 million lump sum award.

Could this family court appeal have been avoided? In any case where an ex-spouse is getting a large financial lump sum to meet future financial needs from their spouse’s inherited wealth, the receiving spouse can be asked to give a formal undertaking or promise to leave their estate to a specific beneficiary, in this case the children. That does not prevent a former spouse spending the money but does try to address the perceived injustice of family inherited wealth being passed out of the family through death and divorce. Part of a family lawyer's role is to think the unthinkable and to work with private client lawyers to protect inherited wealth.

 


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The Del boy divorce - not so cushti now ….
Tuesday 28th July 2015

A self-styled ‘Del boy’ market trader who turned his market stall into a successful frozen food business has lost his court of appeal claim for a share of his wife’s properties.

Michael Harris was a successful trader transforming his market stall from modest beginnings into a business with a 1.8 million turnover, enjoying all the trappings of success including £70,000 of personalised Only Fools and Horses car number plates.

For Mr Harris it was ‘lovely jubbly’ until his separation from his wife in 2001. When they split up the couple did not sort out a financial court order detailing who would keep what .The couple’s failure to sort out their legal affairs meant they ended up in 2015 in the court of appeal arguing over whether they had reached an agreement. Mr Harris argued that his wife had agreed that he should get a share of his wife's 2 properties, including the one that he was living and working from. His wife argued that she had agreed that Mr Harris would keep the business  but her husband had no claims over two houses  owned in her sole name.

The couple had many financial ups and downs during their relationship and ultimately, after Mr Harris was discharged from bankruptcy, the frozen food empire was transferred into a company where Mr Harris owned the shares. In return Mr Harris said he would pay his wife rent of £39,000 a year to rent one of his wife's properties, where he ran the business from.

At the time of the court case the company was said to be worth £415,000 and the 2 properties owned in his wife's name about £900,000. The first judge said Mr Harris should get 25% of the value of the 2 properties – a ‘cushti’ result. However the wife appealed .The appeal judges thought Mr Harris should get nothing from the properties and that he should pay his wife the arrears of rent.

What lessons are there? If you  think you have a family financial  agreement  then don’t just assume that it will be ‘lovely jubbly’ , get legal advice and get the agreement drawn up into a financial court order – that way you will not end up with a Del boy divorce , leaving financial claims open. It is really important to have a watertight agreement or financial court order, and it is particularly important to do so where there are business assets or substantial properties.

 


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The soaring cost of private education and the impact on divorcing families
Monday 27th July 2015

A recent study has revealed that school fees are at their least affordable in five decades. Taking the hypothetical family with two children being educated privately from 2013 and 2015 onwards, the cost would amount to nearly £900,000 over their academic careers, if current school fee trends persist.

The study, conducted by stockbrokers for the Centre for Economics and Business Research concluded that, for some families, a better option maybe to opt for a good state education and to invest the money that would otherwise be spent on day school fees for the children. The study concluded that an amount equivalent to the school fees invested over a 14 year period could result in an investment fund of £800,000 on the children leaving state education. This would provide a sizable sum to give housing deposits for the children and could also add to the retirement fund for the parents.

Many parents commit to private education without thinking what may happen if they split up from a partner or get divorced. In relationships it is often one parent who is keener to prioritise private education for the children. This can lead to conflict on seperation when finances may be stretched or grandparents may be less willing to continue to fund private school fees. It can also lead to conflicts when step children and second families are not educated privately.

Often when a parent is seeking advice on money matters on divorce their key consideration is ''how can I continue to pay the school fees?'' in circumstances where the one pot of assets has to provide two houses, two pension funds and the family income has to support two households rather than one.

The court can make a ''school fees order '' in addition to payments for child support payments but these types of court  orders can be varied or even stopped if there is a change in financial circumstances. Increasingly parents and extended famoily want more creative options to ensure that there is  the money to provide for school fees post divorce so that the children have continuity of education. We are often now being asked to include the creation of 'school fee fund accounts' when preparing divorce settlements and court orders so there is a one off capital payment ring fenced for school fees rather than fees being paid by traditional court school fees order out of income. This study and the predictions for school fee rises indicate that careful thought must be given to the amount of the school fee capital fund required unless there is an agreement that fees will be partially supplemented by payment of school fees out of income from parents or life time gifts by extended family.

 

 


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