fbpx

Divorce – What Happens When Assets are Simply Insufficient to Meet Needs?

2nd January 2024 By

For every headline-grabbing ‘big money’ divorce case there are hundreds of others where a former couple’s assets are simply insufficient to meet their reasonable needs. As a High Court ruling showed, judges take a gender-neutral approach to such cases, striving to achieve the fairest possible outcome.

The case concerned a couple whose marriage, at least on paper, lasted for about 18 years. For all but six of those years, however, they were married in name only. The marriage had, in effect, been over for well over a decade by the time the wife launched proceedings, seeking financial provision from the husband.

The wife, who was disabled and in need of care, lived with the teenage child of the marriage in private rented accommodation that she could barely afford. Dependent on benefits, her finances were extremely tight. The husband, who was approaching retirement age, lived in his own, mortgage-free home – which was worth about £410,000 – but had debts and only a modest pension and savings.

The wife’s initial proposal was that the husband’s home should be sold and that she should receive around three quarters of the proceeds so that she could rehouse herself and the child. In ruling on the matter, however, a judge found that proposal quite unrealistic in that the husband would be rendered homeless. He instead ordered the husband to make a lump-sum payment of £58,000 to the wife.

Dismissing the wife’s appeal against that outcome, the Court noted that neither of their financial positions made for happy reading. The husband’s home had been paid for largely with inherited money and was thus not a matrimonial asset. Even were it sold and the proceeds divided, in whatever proportion, there would be insufficient funds to rehouse either, let alone both, of them.

Although the wife was the child’s primary carer, the marriage had ended many years ago and she and the husband had long been financially independent of each other. Taking into account his debts, the lump sum was about the maximum that the husband could raise without having to sell his home. Although the wife would not have the security of owning a home, she would have a significant lump sum that she could use as she wished. Overall, the judge had taken an entirely justified, gender-neutral approach to assessing their respective needs.

The Court noted that, in a case where assets were insufficient to meet reasonable needs, it was a great credit to lawyers on both sides that the legal costs of the proceedings were not ruinous. They were to be congratulated on the sensible and economic way in which the matter had been litigated.

Source: Concious

Latest News

Award That Requires Borrowing Made Into Court Order

17th May, 2024 By

Disagreements between separating couples all too often result in litigation that substantially reduces the assets available to them, as was illustrated by a case that recently reached the High Court. At issue was whether awards made by arbitrators in financial remedy proceedings can be made into court orders even if that would require one of the parties to borrow money. The couple had previously had a relationship lasting a few years before resuming their relationship in 2015. They had two children before separating again in 2019. Following their separation, the...

Inheritance Disputes – Costs Risks Can Be Reduced

15th May, 2024 By

Arguments about what someone promised before their death can lead to significant legal costs. However, if faced with a claim against the estate, there may be steps the beneficiaries or executors can take to reduce the risks, as a recent High Court case illustrated. A man had left a farmhouse and agricultural land in Cornwall to his wife, with whom he had also jointly owned a neighbouring area of land. After his death, one of the couple's daughters and her husband claimed that he had told them he wanted them...

Share Rounding Error Does Not Prevent CGT Relief

13th May, 2024 By

There are often very specific rules that must be complied with in order to claim tax reliefs, but if a small mistake arises, the courts may be able to provide assistance. In a recent case, the First-tier Tribunal (FTT) found that an investor was entitled to Entrepreneurs' Relief on the disposal of his shares in a company, despite owning one share fewer than he needed to qualify for it. The investor had agreed to purchase 5 per cent of the shares in the company for £500,000. He wished to own...

Wife Entitled to Maintenance Until Sale of Family Home

10th May, 2024 By

When divorcing couples disagree on how assets should be divided, the courts will seek to arrive at a fair outcome for both parties. In deciding how the proceeds of sale of a former couple's home should be apportioned, the Family Court agreed with the wife that she should receive maintenance payments until the sale took place. The couple had married in 2006. Following a brief separation, they had reconciled for two years before finally separating in 2022. The husband and wife both contended that they should be entitled to about...