The New Cost Of Divorce

The government are planning a rise in the fees you pay to get a divorce and this may have a real impact on people who are stuck in unhappy marriages. Senior family court judges are concerned that women will be particularly affected by this new increase in fees. They commented recently that ‘there is something unappetising about the state making a profit on a legal necessity and a source of unhappiness for people’.

Whilst the judiciary are unhappy about this new rise, what are the facts and who will it affect the most?

The plans, that are now the subject of a Common’s Justice Committee Enquiry, are to increase costs by 34 per cent – in real terms this is a rise from £410 to £550. This is the latest in a long line of increases in the cost of divorce. In fact, the cost for a couple getting a divorce has actually gone up by 600 per cent in only two years. This is as a result of the current government pushing the burden from the taxpayer to the individuals involved.

However, the government have not only increased the fees to ensure they cover the cost of the service, they are actually making a profit on divorce – they will take over £66 million in profit each year from unhappy couples and put this towards maintaining the court system.

Whilst for many people £550 to get out of an unhappy marriage may be a price worth paying, it may put a number of people at a real disadvantage and leave them in a position where these fees create a very real barrier to leaving their marriage.

Senior judges, both from the Judicial Executive Board and from the High Court, suggest that people are being encouraged to stay in bad marriages due to financial constraints. The impact on them and on their children could be devastating. They also claim that this goes against one of the fundamentals of British justice – that access to justice should not be sold – everyone should have access regardless of their means. In addition, they fail to understand why people who wish to get divorced should subside the court system.

Speaking of the system; whilst costs are increasing, are divorcing couples able to count on the Court, who pays for its administration and existence, getting a good service? Many practitioners, myself included, would say not. Indeed, many would agree that the system takes much to be desired with how the application is processed, delays in getting matters listed, even for urgent applications, and the list goes on.

It seems this issue will continue to be debated for some time.

 

This information provided in this article is not intended to constitute legal advice and each relationship breakdown requires careful consideration in our view by a fully qualified Solicitors before decisions are made and before you embark on a certain course of action.

 

Shak Inayat
Solicitors
0207 183 2898

Preparing Your Will

Preparing your Will may not be at the top of your list of exciting things to do. In fact it may bring to the surface some thoughts about the fact that you will (eventually) die and what that means for your family. Whilst you may find this a little morbid, planning for your loved one’s future will allow you to feel that they will be cared for even when you are not around.

So what do you need to consider when preparing your Will? Firstly you should select a specialist solicitor to draft your Will for you. This will ensure that your Will meets all the legal requirements and that it is valid. There are a number of other options, such as DIY Wills or Will writers, however these services cannot absolutely guarantee that your Will is valid and correctly signed and witnessed. This could mean that family is left to deal with your estate as someone who is intestate (without a Will) and this can be a very difficult situation for them.

Once you have found the right solicitor to work with, you will need to consider who you would like to be beneficiaries of your Will.  There are no hard and fast rules here, but if you do plan to exclude any close family members, it may be better to have discussions about this so they understand the reasons why. By not having these discussions, you may open up the possibility of a challenge to your Will and this will not help any of your family.

Talking to a solicitor before finalising your Will as there may be some advice to be given relating to tax issues or changes you can make to ensure that you get the most tax efficient Will possible. You may set up a trust or increase your donation to charity to 10% of your total estate (as this can significantly reduce the inheritance tax payable on your estate) so this might be beneficial for your family.

Remember, your Will is your legacy and a way to protect your loved ones when you die. Make sure you prepare well as the consequences will only be felt once you have already gone.

 

This information provided in this article is not intended to constitute legal advice and each relationship breakdown requires careful consideration in our view by a fully qualified Solicitors before decisions are made and before you embark on a certain course of action.

 

Shak Inayat
Solicitors
0207 183 2898

Protecting Your Will

Making a Will is very important to your family. This simple legal document can be the difference between your family having to deal with a legal minefield after you die or complete peace of mind regarding your family’s finances.

 

Once you have made your Will and put all your wishes in the document is it important to take a number of steps to protect it. These are:

 

Tell your family where it is – it is no good making a Will if you don’t tell anyone where to find it. If when you die your will cannot be located then you will be treated as having no Will, which is called intestacy. This means that your wishes are not taken into account and your estate will be divided as the laws of intestacy state. This could mean that people will inherit from your Will that you did not intend.

 

Is it indestructible? – paper documents are susceptible to flooding and fires, and both of these can pose a very real threat to your Will. If you just keep it in a drawer or box at home there is no certainty that by the time you die it will still be there and in a condition that can be executed. If you have your Will drafted by a solicitor, they will usually store your Will for you in a fireproof and water proof environment so it is completely protected from harm.

 

Keep it current – putting your Will in a drawer once you have made it will not protect it or your family. You should be careful to update it every time a life event changes your circumstances. If you get divorced, you will not want all of your estate to go to your ex-spouse and there is a chance this can happen if you don’t update your Will. Marriages, divorces, new children, step children or even grandchildren could prompt you to make a change.

 

In summary, keeping your Will safe from harm, up to date and in a place that your family can easily locate it in will make their lives much easier when they are going through a difficult time after losing you.

 

This information provided in this article is not intended to constitute legal advice and each relationship breakdown requires careful consideration in our view by a fully qualified Solicitors before decisions are made and before you embark on a certain course of action.

 

Shak Inayat

Solicitor

0207 183 2898

Financial Settlements and Divorce

When your marriage has broken down your first thought might often be about how you will cope financially with the break up. Interestingly, you do not need to agree a financial settlement during your divorce. You can do this at any time before or afterwards although there are some very good reasons why you should do this during your divorce.

 

Firstly, don’t be concerned that the reason for your divorce will adversely affect your financial settlement as this usually only happens where serious and impactful behaviour takes place. Although this does not affect the financial settlement aspect of your divorce, it will potentially affect your access to your children and may mean that you will not be the main carer.

 

Secondly, any financial settlement in a divorce is based on a number of different factors that will be taken into account by the judge making the order. He will consider:

 

  • Your earnings and your ex-spouse’s earnings, both of your needs and also both your assets

 

  • What your standard of living was before your marriage broke down

 

  • The length of your marriage and your age

 

  • What contribution your ex-spouse and you made to the marriage, such as looking after the home and the children

 

You can see therefore why each case is different and why the family courts are allowed discretion in making financial awards as the outcomes are not usually straightforward.

 

You should also factor into any financial settlement items such as your pensions. This element can easily be forgotten and could be a large sum of money. You can also ask for a life insurance policy on your ex-spouse to protect you and your children in case he or she dies and therefore any maintenance payments would stop. You can negotiate this insurance payment as part of your financial settlement.

 

Once the court has ordered your spouse to pay maintenance, they must do so. If they don’t, you can go back to the court and ask for an order to make them pay the necessary money. This is usually done with an attachment of earnings order, where your ex-spouse’s employer pays you directly.

 

In addition, if your ex-spouse is also paying child maintenance and stops paying, you should get legal advice as soon as possible.

 

This information provided in this article is not intended to constitute legal advice and each relationship breakdown requires careful consideration in our view by a fully qualified Solicitors before decisions are made and before you embark on a certain course of action.

 

Shak Inayat

Solicitor

0207 183 2898

Pension Earmarking Order – More Trouble Ahead?

In 1995*(1) a new animal was created in the world of ancillary relief (that is the financial aspects of a divorce) when dealing with the distribution of pension assets – a pension earmarking order. Prior to that, in reality the only effective alternative when trying to fairly share the assets of a divorcing couple was to offset a pension fund against other assets, say a lump sum or a property. That was not always a feasible option.

No lawyer that I came across seemed to like pension earmarking orders.

I know I was concerned about how difficult they were to draft and also ensure that they were future proof. I avoided them like the plague as did many of my professional brethren – and it seems that instinct was right all those years ago.

Clearly with the advent of pension sharing orders, courtesy of the 1999 Act*(2), pension earmarking orders fell out of fashion and we all breathed a collective sigh of relief. There are however, still circumstances (such events are rapidly dwindling I accept) where earmarking orders may need to be made – but that is another story for another day.

The changes implemented by Gideon Osborne in April 2015*(3) allowed for persons over 55 to raid their own pensions (as opposed to the companies raiding them for a change!) rather than buying an annuity and there has been much hype in the media about pensioners buying Lamborghinis and then living in penury for the rest of their lives.

If you have an earmarking order, then there is a risk that the person with the pension can effectively raid the pension, take off with the wads of cash and you as the poor ex spouse left high and dry with a reduced pension in payment.

Time to check the wording of your final (financial remedy) order if you have an pension earmarking order as part of your financial remedy (ancillary relief) proceedings?

Shak

*(1) Introduced under section 166 of the Pensions Act 1995, which inserted sections 25B to 25D of the Matrimonial Causes Act 1973. Earmarking of pensions extended the armoury of the court to allow them to earmark a pensioners (a members) pension rights for the benefit of the former spouse and has applied since 1 July 1996.

*(2) The Welfare Reform and Pensions Act 1999 (WRPA) further amended The Matrimonial Causes Act 1973 by sections 19 and 21 of the WRPA  introducing pension sharing (as well as making some improvements to earmarking). The WRPA received Royal Assent on 11 November 1999 and became a legally enforceable settlement from the 1 December 2000.

*(3) pdf of government document highlighting the changes> warning> very dull reading ! can be found here.