Daniel Rushton

Christmas Proposal

Are you Thinking of a Christmas Proposal? What is a Prenuptial Agreement?

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Daniel Rushton
Head of Family Law
Grindeys Solicitors

Maybe you should also be thinking about a pre-nup! This agreement, formally known as a pre-nuptial agreement or pre-civil agreement, has been popular for years with the rich and famous.

However, there is now a growing realisation that they can also be useful to couples with more modest means who are keen to protect their interests before marrying or entering a civil partnership.

In this article we outline the key points to consider if you are thinking about suggesting a pre-nup to your partner, or, if as a parent, you believe it is something your son or daughter should consider.

Who needs one?

The most common reason for a pre-nup is that one partner may be entering into the marriage or civil partnership significantly more wealthy than the other and they, and their family, may be keen to protect their existing financial position.

This is particularly important where personal wealth is tied into a family business.

Couples who have been married before may have assets from their previous relationship that they might wish to preserve, such as the sale proceeds from the former matrimonial home, for the benefit of them or their children.

Both scenarios may benefit from a pre-nup. Before deciding whether a pre-nup is right for you, you need to think carefully about what it is you are seeking to protect.

Is there a good way to raise the subject of a pre-nup?

We have to agree that raising the issue of a pre-nup isn’t always easy. Let’s face it it’s not the most romantic proposition.

There is no legal right to insist that your partner agrees to enter a pre-nup so maybe honesty is the best policy; nobody knows what the future holds and while everyone hopes that their relationship will stand the test of time, there is never any guarantee.

Talk to a family law solicitor. They will be able to advise you about ways to approach the subject with your partner.

Your solicitor may advise you to raise the subject as part of a general discussion about the implications your marriage or civil partnership will have on your financial arrangements.

This could involve discussing the need to update your wills and to think about the ownership of the property you will live in. If your partner can see the need to think about the financial consequences of your relationship then it should not come as such a big surprise if, as part of a general discussion, you raise the possibility of a pre-nup.

The same applies if you are a parent and wish to raise the subject with your child – if you can persuade them of the need to consider the financial impact their marriage or civil partnership will have on the family more widely you stand a better chance of being able to persuade them to consider how a pre-nup might help.

How do we agree the terms of the pre-nup?

One option is to meet with a mediator or collaborative lawyer who can assist you in negotiating the terms.

Another way is to sit down with your partner, or your child and their partner, and agree things between you; however, this can be difficult, particularly if you are the wealthier party.

In either case, you will need legal advice and help with recording the terms in a formal written agreement.

Is a pre-nup legally binding?

The courts in England and Wales will take the terms of a pre-nup into account when deciding how assets should be divided-up following divorce or dissolution of a civil partnership. However, this is subject to certain criteria being met:

    • The pre-nup must be a valid contract entered into freely by both partners – if there is evidence that one partner was pressurised into making the pre-nup, it will be void.
    • The agreed terms must be recorded in a formal document, known as a ‘deed,’ and must contain a statement signed by both partners confirming they understand the agreement is a ‘qualifying nuptial agreement’ which will prevent the court deciding financial arrangements if they divorce or dissolve their civil partnership, unless the agreement they have reached leaves either of them without provision for their financial needs.
    • The agreement must have been made at least 28 days before the wedding or civil partnership took place.
    • At the time the agreement was made, both partners must have received full details about their partner’s financial situation.
    • Both partners must have received legal advice at the time the agreement was made.

    Even if the agreement meets the above criteria, before relying on its terms the court will also consider:

    • the length of the marriage or civil partnership;
    • whether there are any dependent children of the marriage or civil partnership; and
    • the current financial situation of both partners.

Pre-nups made by couples who choose to divorce or dissolve their civil partnership after only a few years together, or at a time when there are no dependent children, are more likely to be upheld by the court than those made by couples who have gone on to have a long marriage or civil partnership or who do have dependent children.

Pre-nups can be a very useful way of protecting your financial position prior to marrying or entering a civil partnership, but you need to think about the terms carefully and take legal advice to ensure that you comply with all the necessary requirements.

They are likely to be particularly persuasive in short marriages and those where there are no dependent children.

Whatever your decision – Good Luck!

If you are thinking of popping the question this Christmas then may we wish you the best of luck and a long and prosperous future together.

More articles by Daniel Rushton

ABOUT DANIEL RUSHTON

Daniel has over 20 years’ experience as a specialist family law solicitor. He is Head of the Family Law team at Grindeys Solicitors based in Stoke on Trent.

Daniel has a particular interest and experience in dealing with business owners, company directors and members of the medical profession in matrimonial situations. For this type of work a solicitor who understands your business accounts and business structure is vital to obtain the best financial settlement possible.

Recent cases include one involving an international business and extremely valuable assets and pensions, as well as property abroad.

He has acted for numerous doctors and other medical professionals, council workers, police officers and serving members of the armed services. In twenty-three years, Daniel has dealt with all walks of life and will adopt a professional yet caring approach to your situation.

Email: daniel.rushton@grindeys.com

 

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Separated and Divorced Parents Need to Make Arrangements for Christmas NOW.

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Daniel Rushton
Head of Family Law
Grindeys Solicitors

Don’t let your troubled relationship ruin the magic of Christmas!

For separated or divorced parents, Christmas can be difficult. Each parent wanting to share the joy of their children throughout the festive period and not necessarily wanting the inconvenience of sharing that joy with their ex.

However, the likelihood is that your child, or children, will want both parents involved. If they do spend Christmas with just one parent, they are likely to want reassurance that the parent they don’t see hasn’t rejected them in anyway or, that the other parent missing out is OK.

Below are some useful tips that may help estranged parents agree arrangements for their children in the hope that the whole family can enjoy a wonderful and stress free Christmas.

  1. Think ahead

Talk to your former partner now about what you would like to happen.  It’s likely that both of you will want quality time with your children.

Take into account the fact that each of you will want a chance to see your child open their presents and to spend time with members of your respective families you may not see that often.

Some parents find that alternating Christmas works well, so that each parent is guaranteed to have every other Christmas with their child and on their year off they may have them on Boxing Day instead.

Others are happy to split Christmas Day in half, so that one parent has their child on Christmas Eve and Christmas morning and the other has them Christmas afternoon and for most of Boxing Day.

  1. Handover arrangements are important

Think about transport arrangements if one or both of you is likely to have had a drink and how you will accommodate your child’s almost inevitable desire to take presents they have already opened with them.

Consider asking family or friends to get involved in collecting or dropping off your child if this would help but choose relatives that will keep the atmosphere amicable.

  1. Communication is essential

Whatever their age, knowing which parent they will be with and when, and if they are likely to see you together, can help avoid uncertainty and anxiety.

If your child is old enough to understand what is going on, then it is a good idea to explain the arrangements you have agreed.  While young children may be happy to fit in with your plans, teenagers may have plans of their own which need to be considered.

Christmas is a busy time of the year, with school plays and parties as well as family commitments to fit in.

  1. Mediation may help

If you and your former partner cannot agree on arrangements for your child that work for everyone, talk to your solicitor about how mediation could help.

Sometimes, working with a neutral person with no vested interest in the outcome (other than the happiness of your child) can help to resolve deep-rooted differences in opinion and find creative solutions you may not have previously considered.

If you have a Child Arrangements Order in place, it is likely that the question of what will happen at Christmas will have already been agreed, but it is still possible that problems may arise, particularly if you or your former partner want to make different arrangements this year.

  1. A court order may be necessary

Talk to your solicitor now if your former partner is being difficult because the court tends to see an increase in applications around this time of year, which means you may have to wait for your case to be heard.

You will also need to attend a mediation information and assessment meeting which can take time to organise.

Click here for more articles by Daniel Rushton

ABOUT DANIEL RUSHTON

Daniel has over 20 years’ experience as a specialist family law solicitor. He is Head of the Family Law team at Grindeys Solicitors based in Stoke on Trent.

Daniel has a particular interest and experience in dealing with business owners, company directors and members of the medical profession in matrimonial situations. For this type of work a solicitor who understands your business accounts and business structure is vital to obtain the best financial settlement possible.

Recent cases include one involving an international business and extremely valuable assets and pensions, as well as property abroad.

He has acted for numerous doctors and other medical professionals, council workers, police officers and serving members of the armed services. In twenty-three years, Daniel has dealt with all walks of life and will adopt a professional yet caring approach to your situation.

Email: daniel.rushton@grindeys.com

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Divorce Negotiations

Increased Wealth and Valuable Pensions make Divorce Negotiations more complex

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Daniel Rushton
Head of Family Law
Grindeys Solicitors

Family Law experts say that the process of divorce, negotiating over finances and family arrangements, is becoming ever more complex, and suggest couples should be more open to making agreements and understanding finances from the outset.

The value of family assets is on the increase particularly for middle-aged couples, which means when couples come to hammer out a fair division after a marriage breakdown there is more at stake.  Wealth statistics from ONS show that by 2014 half of all households had total wealth of £225,100 or more.

Pensions are increasingly important in divorce negotiations

Family property tends to be thought of as the biggest asset.  However, thanks to stock market increases pension values have surged and the Wealth Statistics show private pension wealth was the largest component of aggregate total wealth.

In addition, recent changes in legislation have opened the door to greater flexibility in accessing pension pots which makes them increasingly significant in divorce negotiations.

Many more partners are seeking a share of pension arrangements on divorce.  The Ministry of Justice report a 43% increase in pension sharing orders, at 11,503 in the 2016-17 tax year, compared to 8,027 in 2015-16.

Pension sharing orders are issued by the court, setting out the share of a pension an ex-wife or husband will receive from their former spouse.

Can a spouse expect an equal share?

In recent years spouses divorcing after a long marriage have come to expect an equal share of all assets, irrespective of any decision on needs, and whether or not one was the home maker.

However some have seen the recent case of Hart v Hart as a shift in attitude. After a 23 year marriage the wife was awarded £3.5m, out of total resources of just under £9.4m.

Despite the long marriage the judgement gave greater weight to the pre-marriage wealth of the husband. The wife’s settlement was based on a calculation of needs, rather than equal sharing of assets.

Advanced preparation may prevent future uncertainty

This case was a complicated one, and it is unusual to see pre-marital wealth being given such consideration after a relatively long marriage, during which finances may have mingled.

But, together with the increasingly complex finances of those embarking on late, second or subsequent marriages, it’s an outcome that may encourage more new couples to seek pre-nuptial agreements, or sometimes post-nuptial.

While such agreements are not automatically legally binding in England and Wales, they are likely to be upheld, if done properly, following the 2010 landmark case of Radmacher v Granatino.

It’s a way of clearly setting out what each person has brought into the relationship, in case of any later division of assets and final payout.

What is important is open communication and understanding of financial affairs, and making such an agreement can help couples to have a more frank discussion at the outset.

Often, one partner may take the lead on finances, or some couples may just avoid it, as they think it’s a tricky topic.  But understanding what you have today, in a positive, settled relationship, may mean you can better cope if the worst happens and things become difficult in future.

ABOUT DANIEL RUSHTON

Daniel has over 20 years’ experience as a specialist family law solicitor. He is Head of the Family Law team at Grindeys Solicitors based in Stoke on Trent.

Daniel has a particular interest and experience in dealing with business owners, company directors and members of the medical profession in matrimonial situations. For this type of work a solicitor who understands your business accounts and business structure is vital to obtain the best financial settlement possible.

Recent cases include one involving an international business and extremely valuable assets and pensions, as well as property abroad.

He has acted for numerous doctors and other medical professionals, council workers, police officers and serving members of the armed services. In twenty-three years, Daniel has dealt with all walks of life and will adopt a professional yet caring approach to your situation.

Email: daniel.rushton@grindeys.com

 

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family law

The Complex and Forever Changing Face of Family Law

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Daniel Rushton
Head of Family Law
Grindeys Solicitors

In March 2017, a divorce case hit the national headlines because the courts refused to grant a divorce to a wife because the husband’s behaviour wasn’t deemed ‘unreasonable’ enough to grant a divorce petition.

This decision has left a wife trapped in a loveless marriage with the husband and wife’s financial and personal affairs tied.

There are currently five accepted reasons for divorce; adultery, unreasonable behaviour, two years separation if the other party consents to the divorce, two years desertion or five years separation and this does not require the other party’s consent.

No Fault Divorce

The wife, who has been refused the divorce, may have to wait five years before she can divorce her current husband without his consent.

Five years before she can truly move on with her life!

This is a scenario that doesn’t fit with the views of modern day society which is why 2017 has seen various family law lobby groups such as Resolution, increase their campaign for the introduction of ‘No Fault Divorce’ a concept English Law has yet to grasp.

The Sharing Principle is now not applicable to all

The traditional starting point for a court when separating a couples finances is a 50:50 split. The 50:50 split is then altered depending on the needs of each party to the divorce.

However, in a recent Landmark Ruling it seems that double income couples with no children may no longer have to share assets equally when divorcing.

In this case Lord Justice McFarlane ruled that the couple’s marriage had been relatively short and that the usual principle of sharing assets did not apply. In what other circumstances will the ‘usual’ principle not apply?

In a separate case involving a childless couple who were married for only two years the judge made a £4.2 million financial award to the wife based on ‘her’ needs. In this case the husband brought the wealth to the marriage but the judge deemed the settlement figure to be inline with the wife’s needs.

These two cases illustrate that when deciding what Orders to make, the Court has a very wide discretion. They need this freedom because the facts of each divorce and financial settlement case are always different and not always comparable.

Family Law is Forever Changing

Daniel Rushton a divorce solicitor from Stoke on Trent comments, “There is a worrying trend for divorcing couples to avoid divorce solicitors and to opt for a DIY Divorce for fear of expensive legal fees. The DIY Divorce may seem like the cheaper alternative but that isn’t necessarily the case because the DIY option may not result in a full, fair and final divorce and financial settlement. These high profile cases in 2017 clearly demonstrate that the rules and precedents within modern family law are forever changing and are often very complex.”

Daniel continues, “A rule and application of law applied to the circumstances of one divorcing couple may be entirely inappropriate for another couple, even where the circumstances are broadly the same. It’s the detail of the circumstances that need to be considered which is why it is always advisable to seek legal advice from a solicitor that specialises in family law. The decision to use a lawyer could be the difference between financial certainty or, financial ruin!”

ABOUT DANIEL RUSHTON

Daniel has over 20 years’ experience as a specialist family law solicitor. He is Head of the Family Law team at Grindeys Solicitors based in Stoke on Trent.

Daniel has a particular interest and experience in dealing with business owners, company directors and members of the medical profession in matrimonial situations. For this type of work a solicitor who understands your business accounts and business structure is vital to obtain the best financial settlement possible.

Recent cases include one involving an international business and extremely valuable assets and pensions, as well as property abroad.

He has acted for numerous doctors and other medical professionals, council workers, police officers and serving members of the armed services. In twenty-three years, Daniel has dealt with all walks of life and will adopt a professional yet caring approach to your situation.

Email: daniel.rushton@grindeys.com

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What is Ancillary Relief or Application for a Financial Order

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Daniel Rushton
Head of Family Law
Grindeys Solicitors

Technically, Ancillary Relief no longer exists.

It used to be the name of the application made by one party of a divorcing couple, asking the Court to resolve the financial issues relating to their marriage i.e. claims for capital, for spousal maintenance and against pensions.

This is now called an application for a financial order. People still refer to it as ancillary relief: ancillary meaning connected to divorce and relief as in to resolve the issues.

– More articles and definitions by Daniel Rushton here. –

ABOUT DANIEL

Daniel has over 20 years’ experience as a specialist family law solicitor. He is Head of the Family Law team at Grindeys Solicitors based in Stoke on Trent.

Daniel has a particular interest and experience in dealing with business owners, company directors and members of the medical profession in matrimonial situations. For this type of work a solicitor who understands your business accounts and business structure is vital to obtain the best financial settlement possible.

Recent cases include one involving an international business and extremely valuable assets and pensions, as well as property abroad. He has acted for numerous doctors and other medical professionals, council workers, police officers and serving members of the armed services. In twenty-three years, Daniel has dealt with all walks of life and will adopt a professional yet caring approach to your situation.

Email: daniel.rushton@grindeys.com

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Earmarking Definition

Earmarking Definition or Pension Attachment Order

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Daniel Rushton
Head of Family Law
Grindeys Solicitors

Earmarking  is now called a Pension Attachment Order:  it is when the Court orders a pension provider to pay part of an individual’s pension to their former spouse.

It is quite uncommon now, as the order stops when the main pension holder dies or if the beneficiary remarries. There are still some cases where it may still be used, but its quite rare.

It has largely been replaced by a Pension Sharing Order, which puts part of an individual’s pension into the name of their former spouse, so it belongs then to the former spouse and thus is not affected if the original pension holder dies or if the beneficiary remarries.

– More articles and definitions by Daniel Rushton here. –

ABOUT DANIEL

Daniel has over 20 years’ experience as a specialist family law solicitor. He is Head of the Family Law team at Grindeys Solicitors based in Stoke on Trent.

Daniel has a particular interest and experience in dealing with business owners, company directors and members of the medical profession in matrimonial situations. For this type of work a solicitor who understands your business accounts and business structure is vital to obtain the best financial settlement possible.

Recent cases include one involving an international business and extremely valuable assets and pensions, as well as property abroad. He has acted for numerous doctors and other medical professionals, council workers, police officers and serving members of the armed services. In twenty-three years, Daniel has dealt with all walks of life and will adopt a professional yet caring approach to your situation.

Email: daniel.rushton@grindeys.com

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What is a Consent Order or Order by Consent in Divorce Law UK?

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Daniel Rushton
Head of Family Law
Grindeys Solicitors

Order by Consent

Also called a Consent Order.

This could relate to any Court Order that is made between the parties to litigation, but in the family sphere it tends to refer to a financial order that reflects the financial settlement the parties have agreed.

Generally, it is applied for without either party having to attend a hearing, but the Court require some background information about the parties circumstances, which is provided in a Statement of Information for a Consent Order form.

The job of the Court is to check the parties have reached the agreement fairly and that the terms broadly reflect what it would consider to be ‘fair’.

There is now standard wording for the terms of such orders, but this is not yet mandatory.

It is likely to be difficult for a lay party to draw up an effective Consent Order. It is most common for these to be on a ‘clean break’ basis i.e. they end all ties between the parties: this has no impact on child maintenance claims or any claims the children may have for themselves.

There has to be a divorce in progress to apply for a Consent Order and the Court only has the power to approve one once the Decree Nisi is pronounced.

They can also be made in proceedings relating to the arrangements for the care of children, whether the parties are married or not, but only once a formal application has been made to Court to sort these issues out.

Click here for more articles by Daniel Rushton – Head of Family Law Grindeys Solicitors

ABOUT DANIEL

Daniel has over 20 years’ experience as a specialist family law solicitor. He is Head of the Family Law team at Grindeys Solicitors based in Stoke on Trent.

Daniel has a particular interest and experience in dealing with business owners, company directors and members of the medical profession in matrimonial situations. For this type of work a solicitor who understands your business accounts and business structure is vital to obtain the best financial settlement possible.

Recent cases include one involving an international business and extremely valuable assets and pensions, as well as property abroad. He has acted for numerous doctors and other medical professionals, council workers, police officers and serving members of the armed services. In twenty-three years, Daniel has dealt with all walks of life and will adopt a professional yet caring approach to your situation.

Email: daniel.rushton@grindeys.com

family-law-and-divorce.co.uk

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Divorce Financial Negotiations

Ex husband Ordered to Pay 1.6 million 10 years after he Thought Divorce Financial Negotiations were Complete

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Daniel Rushton
Head of Family Law
Grindeys Solicitors

Honest negotiations and formalising a divorce financial settlement are a crucial part of the divorce process as highlighted in a recent divorce case.

The couple separated in 2002. Following the divorce in 2006, the husband paid the wife £150,000 to pay off the mortgage and signed the family home over to her.

When they first married the couple were both teachers but the husband began a business in 1988. He owned 99% of the shares and the wife had the other 1%.

In 1990, he stopped teaching to concentrate on the business. They had three children when they separated in 2002. From this point the wife had no further dealings with the business which at the time of divorce, had a turnover of approximately one million a year.

Although in 2006 the wife had received the £150,000 and the family home she never signed the settlement agreement which had been drafted.

The lawyer who represented the husband during the initial divorce and financial negotiations confirmed that the wife agreed to the terms of the financial settlement. However, her acceptance was on the basis that the husband provided a full picture of his financial circumstances, with documentary evidence confirming it was true. He never did!

In 2013, ten years after they separated and seven years since the initial financial settlement was agreed she applied for a financial remedy order.

The judge concluded that there had been no full and final settlement, and that the husband had not provided the wife with full disclosure and so the initial financial agreement was not legally binding.

The husband was ordered to pay her a lump sum of £1.6m and to transfer 25% of his pension policies and shares to the wife and that decision was upheld by the Court of Appeal.

The judge said, “It was beyond argument that the wife had a claim. The two parties had made equal contributions to the marriage before separation and the wife had played an important role in the business during its infancy.”

This case illustrates the importance of making a full and honest disclosure when negotiating a financial settlement following divorce.

In another recent divorce case the court looked unfavourably on a husband who lied, attempted to hide money and refused to adhere to court orders during the post-divorce financial negotiations. The court labelled the husband a “disgrace” and issued court orders that forced him to comply. He was also ordered to pay his wife’s legal costs.

This case also illustrates the importance of ensuring that financial arrangements following divorce are legally finalised by way of a Consent Order if an agreement has been reached.

A Consent Order officially ends the financial relationship between a divorcing couple and means no further financial claims can be made against each other (as long as a full and honest financial disclosure has been made by all parties).

In another high profile case reported last year a wife made a claim against her former husband 27 years after their divorce. At the time of the divorce neither had many assets to fight over but the husband went on to build a multi-million pound business.

In the absence of a formal agreement to end their financial relationship following their divorce the former wife succeeded, 27 years later, the wife was allowed to bring a claim against her former husband, despite the fact that he had no assets when they divorced.

The Court actually did not have to decide whether she was entitled to anything, because the husband in question agreed to what was to him a cheap settlement, but it was still a lot of money to the wife.

Honestly negotiating and then formalising a divorce financial settlement is a crucial part of the divorce process. No one wants to be hit with a financial remedy order years after the divorce when they have moved on and rebuilt their lives. An honest formalised agreement ensures the past remains in the past!

About Daniel Rushton

Daniel has over 20 years’ experience as a specialist family law solicitor. He is Head of the Family Law team at Grindeys Solicitors based in Stoke on Trent.

Daniel has a particular interest and experience in dealing with business owners, company directors and members of the medical profession in matrimonial situations. For this type of work a solicitor who understands your business accounts and business structure is vital to obtain the best financial settlement possible.

Recent cases include one involving an international business and extremely valuable assets and pensions, as well as property abroad. He has acted for numerous doctors and other medical professionals, council workers, police officers and serving members of the armed services. In twenty-three years, Daniel has dealt with all walks of life and will adopt a professional yet caring approach to your situation.

Email: daniel.rushton@grindeys.com

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Breaching a Court Financial Order or Consent Order is a Risky Game

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Daniel Rushton Head of Family Law Grindeys Solicitors
Daniel Rushton
Head of Family Law
Grindeys Solicitors

In July 2016, the Telegraph reported on a divorce case where the husband failed to comply with a financial court order, also known as a Consent Order, which stated that the marital home be sold.

The proceeds of the sale were to be used to pay off the marital debt and the remainder to be split between him and his former wife.

He refused to leave the property and after a very expensive four-year legal wrangle and several failed appeals, he has now been given a final ultimatum.

Get out of the house or face a six month prison sentence!

A husband and his new wife are issued with a prison sentence

Another long-winded and expensive legal battle was the case of Trott V Trott (2015).

This resulted in an ex-husband and his new wife being subjected to a custodial prison sentence following a series of breaches of a court order.

In summary, the new wife failed to produce financial statements required by the court and the husband committed several breaches. He failed to transfer proceeds from the sale of marital assets and he also sold shares in a business, an action the court order prohibited him from doing.

The new wife’s minor breach attracted a 14 day custodial sentence suspended for 12 months to discourage her from breaching any further order. The husband, because of the number and severity of breaches, was given a three month custodial sentence.

Value of Assets is Irrelevant

These two cases clearly illustrate that the courts do not look favourably on people who fail to comply with financial orders.

The two cases outlined above involved relatively high value assets, a house worth half a million in the first case and shares valued at one hundred thousand in the second.  However, value is irrelevant! The court will use the power of a custodial sentence even when less valuable assets are concerned.

In 2014, in the case of Hope v Krejci the husband breached a financial court order when he failed to transfer two cars and a motorbike to his wife.

By the time the case came to court he had still failed to make the transfer and the judge ordered that if he had not made the transfer by an agreed date his would receive a 2 month custodial sentence. The value of the vehicles was just £16,000.

In Pocock v Pocock (2013), the husband had agreed to transfer the marital property to the wife, pay the mortgage before redeeming the mortgage before an agreed date.

The mortgage redemption did not happen and mortgage payments were only occasionally paid. The wife had brought the husband back to court several times until she applied to have her husband committed for a custodial sentence. The judge order fourteen days in prison. A sentence which would be suspended but only if he promptly adhered to the terms of the Court Order.

The Cost of a Prison Sentence

Each of these cases share similarities. Each divorce case would have been incredibly stressful for the parties in dispute.

For a court a custodial sentence is a last resort. To get that ‘last resort’ several costly court hearings would have been required which would create a very costly legal bill and for what?

A Court Order is a legally binding document that will be enforced, eventually!

There are Exceptions to Every Rule

Of course there are exceptions to every rule and there is occasion where a breach will be accepted by the court.

If there is a significant event that changes the circumstances of one of the parties to the Consent Order, which impacts on their ability to meet their responsibilities, it may not be enforced.

For example, a former husband is ordered to pay maintenance to his former wife but he is made redundant and he no longer has the means to make the payments. It is unlikely the court would enforce the order until he has the means to do so.

There may also be occasion where a Consent Order is not final and can be appealed.

There are several reasons this could happen. It may be found that one of the parties did not provide a full and honest disclosure of all their assets at the time the Consent Order was made.

If one of the parties was unduly influenced, maybe by violence or blackmail, to accept the Consent Order then the Consent Order could be declared invalid.

Talk to a Family Law Solicitor

Whether or not a Consent Order will be enforced depends very much on the specific circumstances.

If you think a breach has occurred, or you are deliberately breaching the terms of a Consent Order, it is highly recommended that you seek legal advice from a family law specialist.

Ignoring the order of a court could be costly in terms of both your finances and your freedom!

 ABOUT DANIEL

Daniel has over 20 years’ experience as a specialist family law solicitor. He is Head of the Family Law team at Grindeys Solicitors based in Stoke on Trent.

Daniel has a particular interest and experience in dealing with business owners, company directors and members of the medical profession in matrimonial situations. For this type of work a solicitor who understands your business accounts and business structure is vital to obtain the best financial settlement possible.

Recent cases include one involving an international business and extremely valuable assets and pensions, as well as property abroad.

He has acted for numerous doctors and other medical professionals, council workers, police officers and serving members of the armed services. In twenty-three years, Daniel has dealt with all walks of life and will adopt a professional yet caring approach to your situation.

Email: daniel.rushton@grindeys.com

 

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How to Prepare for Divorce – The Practical Side

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Daniel Rushton Head of Family Law Grindeys Solicitors
Daniel Rushton
Head of Family Law
Grindeys Solicitors

For some, the more organised amongst us, practical preparation for divorce will be an easy task.

Organised folders full of clearly labelled documents and all the information and paperwork required for divorce proceeding is easily accessible.

For others, perhaps the majority, bank statements will be stuffed in drawers, wage slips left at the office and the marriage certificate somewhere in the box with the wedding photos.

What do we mean by ‘practical preparation’?

Divorce, and particularly financial negotiations during divorce, requires a lot of paperwork and we advise clients to organise this as soon as possible.

The amount of information required can be overwhelming and sometimes, when the family home has been vacated, difficult to obtain. Not having the necessary documents prepared can cause delays, cost money and cause unnecessary stress.

To negotiate a financial settlement the law requires that both parties provide full and detailed financial disclosure.

In practice, what that means is that each party has to provide evidence of income, outgoings, debts, savings, pensions, business interests and the list goes on.

Being prepared for this process creates many benefits.

If, from the outset, you can provide your family law solicitor with accurate details of your financial circumstances, he or she can provide a more accurate view of the possible final outcome.

Providing the full picture to your solicitor can reduce your legal bill by eliminating the need for your solicitor to review your matter, request missing information and then review again.

Having a clear financial overview reduces risk.

Once you start legal proceedings you are under a legal obligation to provide information. Delays and omitting information, either deliberately or accidentally, only prolongs the procedure and can cause animosity between the divorcing couple, which can often unnecessarily, increase the legal bill for both.

Our clients also tell us that this practical preparation brings emotional benefits.  It helps them review their situation, think about the future and make positive plans, all part of the healing process when a marriage ends.

Reduce risk and stress

We strongly recommend all our clients to be as prepared as possible to reduce the risk, cost and stress often associated with a time of uncertainty and emotional trauma.

The Practical Preparation Checklist

To help, we provide our clients with a checklist of documents to prepare before divorce proceedings begin.  If you feel the document could benefit you,  you  can request a copy here.

ABOUT DANIEL

Daniel has over 20 years’ experience as a specialist family law solicitor. He is Head of the Family Law team at Grindeys Solicitors based in Stoke on Trent.

Daniel has a particular interest and experience in dealing with business owners, company directors and members of the medical profession in matrimonial situations. For this type of work a solicitor who understands your business accounts and business structure is vital to obtain the best financial settlement possible.

Recent cases include one involving an international business and extremely valuable assets and pensions, as well as property abroad.

He has acted for numerous doctors and other medical professionals, council workers, police officers and serving members of the armed services. In twenty-three years, Daniel has dealt with all walks of life and will adopt a professional yet caring approach to your situation.

Email: daniel.rushton@grindeys.com

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Divorce and your Business – Keeping the Golden Goose Alive

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Daniel Rushton Head of Family Law Grindeys Solicitors
Daniel Rushton
Head of Family Law
Grindeys Solicitors

In this article Family Law Solicitor Daniel Rushton, explores the implications of divorce on an owned business.

One fear for many business people is how their business will fair when they face divorce proceedings. Are those fears justified?

It is often the Golden Goose of assets, in that it is the source of income for one or both parties and even if only one party benefits from it directly, it is often the source of either child or spousal maintenance and killing the goose, whilst it may feed the family immediately, will leave everyone worse off in the medium to long term.

Unfortunately, there is no simple answer to whether the goose will survive or face the axe, but the existence of the business does tend to create of a lot of interest from the other party’s solicitors and can lead to both parties incurring far higher legal costs than would otherwise be the case, in circumstances where it is not always justified.

The Value

Historically, the fact that one of the parties to the divorce owned a business would automatically involve expensive independent forensic accountant’s report, at the expense of both parties, to see just how fat the goose is.

The Courts have more recently made it clear that businesses should only be valued where there is some point to it or if it likely the business will be sold, recognizing that its often better to let the goose live and that sometimes, the goose will only lay eggs for its master, in that the value in the business lies only in the expertise and hard work of the principal.

Clearly, there is a big difference between a multinational public limited company and a sole trader but there is no formula to determine whether a business should be valued and whether its value will be taken into account on a matrimonial settlement.

Looking at the factors that may indicate a valuation should take place may give the business owner some idea of the steps to take when forming a business to ensure it is not overly influential in the matrimonial settlement.

Other Considerations

Do the parties own a substantial proportion of the business? Who owns the remainder?

If the goose is owned by more people, the Court is going to be less likely to order its execution, as the innocent co-owners will lose out.

If business assets and personal assets are intermingled, it is more likely the Court will include the business as an asset of the marriage, whether or not there is a formal valuation.

divorce-and-your-businessIt is therefore important, as far as possible, to keep the business assets separate from the matrimonial assets. It is especially important if at all possible to avoid securing any business lending against the matrimonial home although for most small businesses, this is something that is likely to be hard to avoid.

Is there any prospect of the business being sold? If the goose is already in the crate, ready to head to market, its value will soon be realized and is therefore more likely to be taken into consideration.

The age of the farmer will be relevant as well: if the farmer is approaching retirement age, there is a prospect of the business being sold or wound up. If there are plans in place for the farmer’s children to keep running the farm, the goose may be less vulnerable, depending how cogent these plans are.

Are there complicated structures involving trusts and holding companies? If the goose is being looked after by someone else, especially if they happen to live in a country where geese are revered (i.e. a tax haven), then the Court is more likely to ponder over the value of the goose and is entitled to assume the goose is very fat and possibly consists of a gaggle (or a skein if they are in transit).

It is only really worthwhile looking at these types of arrangements if the business is seriously lucrative. This would need the involvement of specialist accountancy advice.

Clearly the accounts for the business will have an impact on the Court’s decision and a valuation is more likely if they show sizeable profits and turnover.

They will also give rise to interest if the business appears to be rich in capital assets, especially cash, so when the golden eggs are laid, unless there are strong business reasons to keep them in the business, it may be a mistake to keep them, as the Court, via an accountant, will looking into the liquidity of the business.

A difference in the standard of living and the profits shown by the business may also raise eyebrows.

Protect the Business Prior to Marriage

If you are unfortunate enough to be facing the prospect of divorce now, then it is too late to safeguard the goose in many respects, but what if the are no clouds of divorce on the horizon or the prospect of marriage has not arisen?

If you are already married, you have time to structure your business to protect it for the future taking into account the points made above, so you may want to speak to your accountant or solicitors or preferably both about steps you can take in your particular circumstances, but obvious things to avoid are the placing of shares in your spouse’s name and them being actively or even nominally involved in the business, although you then have to weigh in the balance the tax benefits that can bring.

What if you have not tied the knot yet? The most obvious (although least romantic) solution is not to marry.

Cohabitants have no automatic claim on anything unless it is jointly owned or some form of equitable trust is deemed to have been created (i.e. “of course it’s half your goose, darling, you just need to clean it, look after it and feed it”).

This may not be an option, but pre-nuptial agreements are increasingly being recognized by the Courts and, as long as they are ‘fair’ in the broadest sense and are not imposed by one party on the other, if done properly, they can now be very effective tools in preserving a business.

Even if you are already married, it is possible to enter a ‘mid-nuptial agreement’, which should in principle attract the same consequences as a pre-nuptial agreement.

The difficulty here is that negotiating terms will be very difficult without sounding the death knoll for the marriage, but are sometimes used where parties have separated, but have gone on to make up their differences.

This is a specialised area of law and it is important to get the right legal and specialist accountancy advice in respect of your situation.

About Daniel

Daniel has over 20 years’ experience as a specialist family law solicitor. He is Head of the Family Law team at Grindeys Solicitors based in Stoke on Trent.

Daniel has a particular interest and experience in dealing with business owners, company directors and members of the medical profession in matrimonial situations. For this type of work a solicitor who understands your business accounts and business structure is vital to obtain the best financial settlement possible.

Recent cases include one involving an international business and extremely valuable assets and pensions, as well as property abroad.

He has acted for numerous doctors and other medical professionals, council workers, police officers and serving members of the armed services. In twenty-three years, Daniel has dealt with all walks of life and will adopt a professional yet caring approach to your situation.

Email: daniel.rushton@grindeys.com

 

 

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