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.

What Do I Need To Know About Divorce?

Making the very difficult decision to get a divorce from your spouse is one which will take time.

It is crucial therefore that you know where you stand and what your rights are before you make any firm decisions and to learn as much about the process as possible.

1. On what grounds can I get divorced?

There are five different grounds for divorce in England and Wales (the law is different in Scotland and Northern Ireland). These are:

  • Adultery
  • Unreasonable behaviour
  • Desertion
  • You’ve been separated and lived apart for 2 years and you both agree to the divorce
  • You’ve been separated and lived apart for 5 years, even if your spouse will not consent to the divorce

You must also have been married for a year before you can commence divorce proceedings

2. How do I deal with custody of our children?

You will ideally agree on the details of the custody of your children amicably with your spouse before the divorce petition is sent to the court because the Statement of Arrangements for the Children needs to be sent along with the divorce petition. The court needs to be persuaded that the arrangements you put in place are in the best interests of your children. If you are struggling to be amicable, there is the opportunity for you to and your spouse to get a mediator involved to resolve these issues, but not being able to agree does not mean that you cannot divorce. It simply means that you may need to address the custody issues separately.

3. How is the financial settlement worked out?

Each divorce is different and as it is really important to achieve the best settlement possible for you and your children, speaking with a specialist family solicitor will help you to ensure you get sound legal advice on this important area of divorce. There are a number of factors that will be considered before the most common settlement of a monthly maintenance figure will probably be agreed. You should try to work through any contentious issues with a mediator if necessary and try to agree the financial settlement before court.

4. Will I have to go to court?

If your divorce is contested (your spouse does not agree with the divorce) then you will have to go to court and possibly attend a court hearing alongside your spouse. However, if neither of you contest the divorce you will not have to attend court. All paperwork, including your divorce petition and your applications for a decree nisi and decree absolute will go through the court.

If you decide that a divorce is the route you want to take, you should seek advice from a family law solicitor to ensure that you are fully aware about what your divorce will mean for you and your family.

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 Solicitor before decisions are made and before you embark on a certain course of action.

Shak Inayat
Solicitor
0207 183 2898

How Should I Look After My Will?

Making a Last Will and Testament is one of the most important things you will ever do. It will give you control over what happens to your estate once you die and in addition, it provides legal protection for your loved ones.

However it is not as simple as making your Will, putting it in the cupboard and forgetting all about it. If you do take this approach, you may find that by the time you die your Will is completely out of date and could exclude loved ones you wanted to inherit from your estate and perhaps worse still include those you didn’t.

Therefore, it is hugely important to understand how to take care of your Will, so that by the time you die it still reflects your wishes.

The first common mistake once a Will has been made is that it gets put into a cupboard and forgotten about. If you have not told anyone that you have made a Will this can cause serious problems in the future.

If your Will isn’t found, you will be deemed to have died intestate, which means that your estate is divided up by the law of intestacy, with no reference to your own wishes. Therefore, when you make a Will, it is important to tell people close to you that you have made a Will and also where it is stored.

You should also consider where to store your Will so that it is safe. A solicitor could store a copy of your Will at their offices, often in a safe able to withstand any fire or flood risks. You could also retain a copy of the Will at home, but bearing in mind the complications mentioned above, it is not advisable to store the original copy at your home.

Once your Will has been made, it is important to keep it up to date, particularly if you get married, divorced or have children. In all of these circumstances, there are real implications to not updating your Will, such as an ex-spouse inheriting all of your estate when she has already remarried. This can and does happen, so keeping your Will up to date is critical. This can be done quickly and simply with a codicil for small updates, or for some of the larger life events it may be necessary to make a new Will. Your solicitor will usually gladly discuss any changes to your circumstances over the telephone and advise you whether your Will needs updating.

What is crucial with updates and new Wills is that they remain valid in the eyes of the law. Any invalid changes may make the Will void, meaning again that you will be classed as dying intestate.

One thing is certain, you should treat your Will with care and respect and not just forget about it, as this could cause significant repercussions after your death.

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 Solicitor before decisions are made and before you embark on a certain course of action.

Shak Inayat
Solicitor
0207 183 2898

Should Divorce Cases Be Removed From Court Altogether?

Marriage is said to be the oldest institution and getting married is a serious contract to enter into with someone. The consequences of the marriage not working are to navigate a divorce, which often can be adversarial, long and complex. However, plans are moving forward to allow divorce to be carried out in a national processing centre, which will pave the way for divorce to become much easier and could be similar to applying for a new passport.

Sir James Munby, one of the country’s most senior judges is looking to take 120,000 divorces out of the court system each year and put them into a number of regional centres across the country in order to complete the paperwork instead of in a court. He says that the process of divorce should be removed from the issues connected to ending a marriage, like the division of assets or the custody of children.

Any divorce which is not contested and where there are no financial claims nor any claims over children will be included in these new plans, which will help to reduce the burden on the court and to make divorce cheaper and easier.

As non-contested divorces are largely administrative, Sir James says that this is a process which could lend itself to being completed in a central processing centre.

Whilst there is general support for the move from elsewhere in the judiciary, with Sir Paul Coleridge who founded the Marriage Foundation which champions stable relationships in marriage, saying that this simplified divorce process is already happening, albeit by a judge in the court system. He also commented that, whilst he supported the changes, there was a real risk that the general public may perceive that divorce was easier as a result.

Of course whilst there are many supporters of making the process of divorce less adversarial and easier for everyone involved, there are people who do not support these ideas. Ex Tory MP Ann Widdecombe has commented that the idea makes a mockery of marriage by making divorce too easy and that the decision to get divorced should be taken with plenty of thought.

We shall wait to see the outcome of these proposals, however any steps which can be taken to make uncontested divorce less acrimonious must be a positive step forward.

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 Solicitor before decisions are made and before you embark on a certain course of action.

Shak Inayat
Solicitor
0207 183 2898

Intestacy Laws Are Changing

Intestacy is the law which governs anyone’s estate who dies without a valid Last Will and Testament in place and the intestacy laws distribute the deceased person’s estate between any surviving spouse, children or relatives.

These laws are quite outdated and have meant that spouses were often only given half of their partner’s estate, however changes to the law means that this will no longer apply.

So what does this mean for the family of someone who dies without a valid Will and does it mean that making a Last Will and Testament is now pointless?

In a word, no. It is very important to make a Will to ensure that your wishes are honoured, but also to protect your spouse and your children. A Will is particularly important if you are not married or in a civil partnership as the law of intestacy makes no provision for ‘common law’ partners.

In addition to making a Will, you should also ensure that your Will is regularly updated with any births, deaths, divorces or changes in family circumstances. Often, it is these small changes which are missed which can cause serious family disagreements after death and mean that your wishes are not accounted for.

So what do these changes to the intestacy law incorporate? The reforms to the law, which are being made by the Inheritance and Trustees’ Powers Act 2014, include the passing of the whole estate to the surviving spouse if there are no children. The legislation also seeks to simplify the distribution of assets between children and their parent and any remaining relatives who inherit under the law.

These reforms include changes to inheritance by children who lose a parent and are subsequently adopted and are also intended to assist unmarried fathers who lose out under current laws if their child dies intestate.

These changes are to be introduced on 1st October 2014, and whilst they go some way to making the process of intestacy less painful, this is no replacement for the provision of a Will which can be used to ensure your wishes are carried out, but can also be a powerful tool to reducing the inheritance tax burden on your loved ones.

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 Solicitor before decisions are made and before you embark on a certain course of action.

Shak Inayat
Solicitor
0207 183 2898

Seven Good Reasons To Make A Will Now

Making a Will is not normally high on a list of priorities, nor is it a particularly engaging activity, but there are a number of excellent reasons why you should make a Will, and do it soon.

Your wishes will be fulfilled – whatever you decide should happen after your death, both to your estate but also regarding your funeral, can be stipulated in your Will. Therefore, if you want specific music played at your funeral or you want a portion of your estate to be given to a favourite charity, this can be made a certainty by using a Will.

Intestacy won’t apply – the laws of intestacy, which are applied to an estate if no Will is made can be very strict and depending on the size of your estate, there may be a limit as to how much your spouse will be given. In the event of you dying with no blood relatives, your estate will be given over in total to the Crown.

Your children will be provided for – if you have children, you will be able to stipulate who you wish to be their legal guardian. You will also be able to make financial provisions for them, for example, to remain in the family home until they reach adulthood. Without a Will, they could be taken into care until a decision over who will look after them can be made by the court, and even then, they could be placed with someone you would not have chosen.

Protect your partner if you are not married – common law partners have no legal rights at all so if you and your partner have never married and you die leaving no Will, there is the very real possibility that your partner will be in financial difficulty. Your Will should be used to protect your partner from such an event.

Inheritance Tax Issues – any estate worth over £325,000 is subject to inheritance tax and a Will can help you plan more tax efficiently, as many properties are worth more than this alone.

Divorced but not remarried – many people do not realise that if you are divorced and not remarried and you leave no Will, your ex-spouse will inherit your estate.

To help out your family – when you die intestate the whole process of probate takes much longer and is much more complicated. This will leave your loved ones with a complicated legal process and all of the funeral costs to find, whilst also grieving for you. This has to be one of the best reasons to act now and make your Will.

Whilst some of these points raised may not apply to you and your circumstances, some of them will and those should be enough for you to recognise the value of making a Will soon.

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 Solicitor before decisions are made and before you embark on a certain course of action.

Shak Inayat
Solicitor
0207 183 2898

Imagine a horrible man…..

Imagine a horrible man…

Then imagine that he hates his wife so much that he went out of his way to get her into trouble and that lands HER in jail.

Then imagine that he gets sacked (or resigns, call it what you will) from his job in the government

Then imagine the same man allegedly then pulled his wife through a window into the former matrimonial home and gave her a black eye in doing so

Then imagine the same odious man was allegedly violent when his wife tried to leave the home to flee from his rage.

Then imagine the same man who had previously worked for the government as an advisor being RE-INSTATED as a government advisor again.

I would be disgusted – wouldn’t you?

Well read these two articles then make up your own mind (and please tell me if I am missing something – I genuinely want to know because I cannot fathom it out) :

http://www.bbc.co.uk/news/uk-politics-25844091

http://www.telegraph.co.uk/news/uknews/law-and-order/10585122/Vicky-Pryce-gave-Chris-Huhne-black-eye-after-affair-aroused-gay-suspicions-court-told.html

Vince v Wyatt – round 2

Further to my previous blog on this issue, surprise surprise; the Supreme Court will hear an appeal by the wife in the case of Vince v Wyatt [2013] EWCA Civ 495.

Just when you thought this problem had gone to bed – it rears it’s head again.

You myat recall from my earlier blog  that in May 2013 the Court of Appeal allowed the husband’s appeal against the dismissal of his application to strike out his former wife’s claim for a financial remedy, which she issued some 18 years after the parties were divorced.

The Court also held that an A v A order should not have been made against the husband requiring him to pay a total of £125,000 to fund his ex-wife’s legal costs of bringing the claim against him. In the High Court Mr Vince had been ordered to pay £125,000 directly to Ms Wyatt’s solicitors.
There are six grounds of appeal in respect of each of which permission to appeal has been granted. The constitution of the Appellate Committee which granted permission was Baroness Hale, Lord Sumption and Lord Carnwath.

The essential points on appeal are:

  • Whether or not it is permissible to strike out a party’s Form A financial remedy application without the merits of such party’s claim being considered by a court of trial; and
  • What is the legal and beneficial status of monies paid under the A v A jurisdiction?

The appeal before the Supreme Court is likely to be heard in December 2014.

Watch this space!

All You Need To Know About Pre-Nuptial Agreements

Many people in the UK think that pre-nuptial agreements are for famous people and for the very rich, but they are being used more and more in the UK now.

The slightly odd thing about a pre-nuptial agreement, more commonly known as a pre-nup, is, that they are not currently legally binding in England and Wales and as a result, not exactly enforceable either.

So you may think that a pre-nup agreement is just a waste of time, but although not legally binding, they do hold some weight in court.

There are a number of different takes on a pre-nup, with post-nups and pre or post-civil partnership agreements. The only difference is whether the agreement refers to a marriage or a civil partnership and whether the agreement is put into place before or after the ceremony.

Either way, the effect is the same. What happens in the event of a divorce or dissolution of civil partnership is that the court will decide how they will split the couple’s assets. The court has a great deal of scope to make decisions based on a number of factors and if there is a pre-nup in place, this can be taken into account by the court during this process.

At the current time, following a decision in the Supreme Court in 2010 in the case of Radmacher v Granatino, any pre-nup that was entered into freely by both parties and with a full understanding of its implications, should be enforced by the court, as long as it was not unfair to do so.

Prior to the Radmacher v Granatino case, the UK court system said that a pre-nup was invalid because the person who obtained it knew that the marriage was going to break down and that was the sole reason for the pre-nup.

So the strange position in the UK is that whilst a pre-nup is not a legal document, it definitely does carry weight in court in the event of a marriage breakdown, as long as it has been prepared properly and that both parties are in agreement.

This may be set to change though, with the announcement by the Law Commission that pre-nups will be made legally enforceable by creating a new statute in the coming years. This can only help with the effectiveness of current pre-nups too.

Before you get married or enter into a civil partnership, it may be worth discussing the option of a pre-nup with your partner and if you both agree, speak to a solicitor to draw one up.

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 Solicitor before decisions are made and before you embark on a certain course  of action.

Shak Inayat
Solicitor
0207 183 2898

What Is A Living Will And How Do I Make One?

A living will was formally known as an ‘Advance Decision’. Putting in place a living will allows you to make decisions about the types of medical treatment you want to refuse if you are in a position where you cannot provide this information yourself.

If you have a life limiting disease you will be able to discuss your treatment with your doctor whilst you are still able to and to agree what treatment you want or don’t want. If however, you are in a car accident or have a stroke or some other sudden event; you may not be able to express your wishes.

An Advance Decision gives you the security you need to be sure that you will not receive certain types of treatment if something happens to you which renders you unable to make this decision yourself. The legal term for this is to ‘lack capacity’.

You also have the opportunity to make an Advance Statement which covers your wishes about how you want to be treated. This covers everything else except your decision to refuse treatments, which is covered in your Advance Decision. Although an Advance Statement is not legally binding, it will be taken into account. An Advance Decision is legally binding and cannot be ignored or discounted.

So what do you need to consider when making an Advance Decision?

The first steps would be to think about the types of treatments you don’t want to receive. These may be things like resuscitation or life support machinery. It is important to be clear about what treatment you don’t want and in which circumstances this situation may arise.

When you are making this important decision about your future treatment, it is vitally important that you speak to your loved ones and family too so that they understand the decisions you are making and that they support you in these decisions.

You will need to speak with your GP about your Advance Decision. This is because you have to have someone sign to say that you have the mental capacity to make an Advance Decision. Your GP will also be able to answer any questions you may have about certain types of treatments.

Finally, although you can make an Advance Decision without a solicitor, it may not be legally binding, so it is really important to seek independent legal advice to ensure that if the worst happens, your medical wishes will be carried out.

For more information about this article or any aspect of our Wills, Probate & Trusts services (including Care home fees recovery and powers of attorney), please call us on 0333 34 44 54 8 and we will be delighted to help you (there is no charge for initial telephone discussions).

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 Solicitor before decisions are made and before you embark on a certain course  of action.

Shak Inayat

Solicitor

0207 183 2898