“Money, money, money – must be funny – in a rich man’s world…….”

We’ve all heard of pre-nups for the rich and famous but those of us who live more “ordinary” lives also should think about finances when going into a relationship and, sadly, if things start to go wrong – don’t let “heart rule head”.  I’m grateful to my colleague, Vijaya Sumputh, a Family Law expert at Curwens Solicitors, for her thoughts on this :

PROTECTING YOUR FINANCES FOLLOWING A RELATIONSHIP BREAKDOWN

Beginning a new relationship can often feel like entering uncharted waters. All you want to do is to live happily ever after with your new partner, but people often don’t consider what happens if the relationship ends.  A split can have a devastating emotional impact and financial uncertainty adds significant stress to an already difficult time.   A recent study suggests that as many as 2 million Britons are in debt because their ex-partner continued to spend after they’d separated – a “dirty separation trick” by a bitter “Ex”.

Married Couples

Here, the Court has the power under the Matrimonial Causes Act 1973 to split the debt between the two parties based on their financial needs and the Court may award more to the paying party including spousal maintenance to cover the repayments.

Unmarried Couples

There is no such protection for unmarried, cohabiting couples. In long term relationships, many couples set up joint bank accounts (even if marriage is not their immediate plan) to cover mortgage/rent and bills. This normally ends once the relationship comes to an end, because living with someone does not create a legal relationship.   So, if a couple has a joint debt and then splits up, both can end up being liable for the debt and one may be stuck with it if the other party doesn’t pay.  Unmarried couples must think about what happens to their investments if they split up – if the family home is to be sold, how will the proceeds be split ?

Protection

You can protect yourself by getting your solicitor to draft a “Cohabitation” or  “Living Together” agreement (also known as a deed) which sets out who pays what and what would happen to the assets if the relationship comes to an end, with a Declaration of Trust as to the ownership of the house.  You can also consider using Mediation or negotiation to resolve issues.

It may seem pessimistic to think about a relationship ending when you’re just starting out together, but on the other hand, a break up can be devastating emotionally, so a living together agreement helps with the practical issues, to reach a quick settlement.

If you think what I have described fits your circumstances, do give Vijaya a call for a no obligation chat on 0208 363 4444 or e-mail us at vijaya.sumputh@curwens.co.uk

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D-I-V-O-R-C-E

….so sang the legendary country singer, Tammy Wynette almost 50 years ago. With a divorce so many years ago, one might think it was all “done and dusted” as did a Mr. Dale Vince who divorced his wife, Kathleen Wyatt, in 1992, but, not necessarily so, as the Supreme Court ruled recently. For the subject of this blog, I’m grateful to my colleague at Curwens, Family Law specialist, Vijaya Sumputh :

“The talk of this week has been about Kathleen Wyatt (“Kathleen”) and Dale Vince (“Dale”), whose case is a warning to many couples starting divorce proceedings and emphasises the importance of seeking legal advice to finalise financial matters. Kathleen’s marriage to Dale ended in divorce in 1992. At the time neither party had any financial security. Kathleen raised their children without significant financial support from Dale, who eventually went on to have a successful career and acquire considerable wealth.

In 2011, nearly 25 years after their separation and over 20 years after their divorce, Kathleen lodged a maintenance claim seeking a £1.9 million payout from Dale. Her application was originally dismissed under Rule 4.4 of Family Procedure Rules on the basis that there was no prospect of success or was an abuse of the court’s process. Kathleen took her case to the Supreme Court, where Lord Wilson stated that Kathleen’s claim was “legally recognisable” and not an “abuse of process”. His Lordship admitted that “it is obvious, even at this stage, that an award approaching [£1.9million] is out of the question,” but one factor Kathleen could rely on to justify a financial claim was that of her much greater contribution to the upbringing of the parties’ children over many years. Consequently, she may now be entitled to make a claim for a mortgage free property and maintenance.

This decision is striking because matrimonial claims are very different to other civil claims and remain alive after the marriage has come to an end. This case reminds us that there is no time limit for former spouses to apply to a Court in England and Wales for a financial settlement following a divorce, even if their claim is considered to be weak. We have to wait and see whether Kathleen’s application has any value when reassessed by the Family Court, but, meanwhile we may see an increase in opportunistic divorce financial applications.

This is a wake-up call for divorcing couples who do not want to have sleepless nights and a big hole in their pockets, that they should obtain a financial order from the Court at the time of their divorce stating that neither party will make a further financial claim against the other.”

vijaya.sumputh@curwens.co.uk
March 2015
http://www.curwens.co.uk