Tuesday, 15 April 2014

THE SMALL PRINT


Agreements reached in family proceedings can be set aside if they arise from a misrepresentation, duress or in some instances even a mistake as to what it is that is being signed. However, as one wealthy foreign gentleman has found, English law does not extend to accepting that leaving your reading glasses behind results in an inability to read or understand the finer details of the small print, not even when that small print commits you to paying £60,000 maintenance per calendar month! 

Fortunately for the hapless signatory, the court was not entirely convinced that maintenance at that level was necessary or fair and it seems that he must only pay approximately £33,000 per month instead! 


Monday, 14 April 2014

A TAX ON SALES AT SEPARATION


Property has always been seen as a basis for taxation and although an Englishman’s home may be his castle it can also be very expensive to retain subject as it is to council tax, inheritance tax and, as now seems increasingly likely in the case of divorce or separation, capital gains tax.

Generally speaking a property used as your main home is exempt from capital gains tax. However, if you separate, then, by definition, it is no longer the home of the person who vacates. Needless to say many people choose to sort out the practicalities of leaving first, only to take legal advice months and sometimes years later when they feel ready to face the prospect of divorce.

Whilst most law firms fall shy of giving actual tax advice, family lawyers have nonetheless operated and advised clients with regard to the negotiation of settlements on the basis that  even where their client vacated the home, no charge to capital gains tax will arise if it is sold within 3 years of separation. Since the beginning of the new tax year on 6th April, however, there has been no such solace. The period of 3 years has been slashed to 18 months or approximately the length of time it might take to bring a case from beginning to end through court to force a sale of the marital home.

Add to the length of time it could take to obtain a court order, the actual period required to market and then sell a property, especially in my local area where the housing market remains slow, and you will quickly envisage the scale of the problem. Yes, some people who bought in the last 7 to 8 years may actually lose money on a sale or make a notional profit that will be below the threshold for tax, but for others who may have owned for many years the story can be different.

Moreover and whilst the potential liability will fall only on the person who has been out of occupation and of course only apply to their one half of the gain calculated pro rata for the period they have been out of occupation (less 18 months), it will nevertheless affect the overall outcome if the payment of tax due must be provided for from the proceeds of sale before they are divided between a couple. These new arrangements may only have been with us for just over a week but already I am beginning to see cases where there will inevitably be adverse consequences.


Whilst nobody ever wants to encourage anyone to take professional advice arising from their separation before they are ready to do so, when it comes to their home they must seek advice as soon as possible. In the words of Benjamin Franklin, “In this world nothing can be said to be certain, except death and taxes.”

Thursday, 27 March 2014

DESCRIPTION OF A DIVORCE LAWYER


I recall someone giving me a very helpful hint to the effect that when shaking hands and networking you should repeat your name and describe what you do, not your occupation. So I became “Judith, Judith who helps people at a time of relationship breakdown,” rather than “Judith, a divorce lawyer.” The description has served me well but I glean that it is about to be supplanted.

With the announcement on her blog of her separation from her husband Chris Martin, Gwyneth Paltrow has introduced unsuspecting divorce lawyers to a new phrase: “conscious uncoupling,” which inevitably makes me and others like me Conscious Uncouplers.


I can’t wait for a networking event to try that one out!


Thursday, 20 March 2014

BINGO AND BEER



The Chancellor thought he’d pulled a rabbit out of the hat yesterday with a budget aimed at pensioners and savers. Today commentators are expressing concern at the ability, if the proposals about pensions are followed through, to draw the whole of one’s pension as a lump sum. Indeed I’ve even read that this could be an ideal opportunity for people to thwart a spouse’s claim on pensions by drawing them in full and spending the proceeds. Rest assured English law already has procedures available to freeze assets.
Media space has also been directed at lampooning the Tory party and its ill-advised Chairman for promulgating an advert in which they seek to publicise the decision to reduce the tax levy on bingo and beer. “Cutting the bingo tax & beer duty to help hardworking people do more of the things they enjoy,” it said.
I have helped many clients who have attributed the breakdown of their marriage to a spouse who has been working so hard (be that in a business or at home looking after children) that they have felt neglected. Whilst they may have alleged that their spouse has been tied up in such work from morn to night, strangely I cannot recall it also being suggested that they went on to play bingo afterwards.
Beer, of course, is a different matter. Indeed there have been many clients too who have maintained that their spouse has worked hard and played hard calling in for a bevvy or two far too often on their way home from their arduous day. If, however, the Government really wanted to reward these people then perhaps it should have done the maths first and realised that the reduction in duty means that they will need to drink 100 pints before they save a pound!
It seems to me that not only was the advert patronising, but it was also untrue.


Tuesday, 4 March 2014

JEREMY BENTHAM



Last week I had the pleasure of meeting Jeremy Bentham, the great philosopher and founder of the theory of utilitarianism. Perhaps to say I met him is overstating the position, after all he died in 1832. However, Little Girl is contemplating studying at UCL (University College London), and I therefore accompanied her in response to an invitation to visit the university. 

On our guided tour by a current undergraduate, we were shown Bentham who is associated with the founding of UCL in 1826. There he was sitting in his glass case, patiently waiting until he is next wheeled out, presumably to attend an anniversary meeting of the university's council. 

Macabrely we were assured that this really is Bentham's skeleton wearing his original clothes, right down to his silk underwear. His head, however, is a wax copy with some of his real hair attached, after attempts to mummify his real head failed dismally. The real head is now securely locked away separately after it became the subject of a number of student pranks, including being kidnapped and subsequently discovered in a locker on Aberdeen Station.

So what does any of this have to do with this blog? Well Bentham was a man whose thinking was often way ahead of his times and hence his accreditation as the spiritual founder of UCL. 

For someone born in 1748, I find it amazing that his philosophy on individual freedom and legal rights extended even in the 18th century to equality of the sexes, homosexuality and divorce. Strange that we are still grappling with these issues almost 200 years later and if he was still alive I am sure he would have a thing or two to say about that.


Saturday, 1 March 2014

AGREE THE COLLABORATIVE WAY


I refer to my last post as well now to the media debate as to whether pre-nups are unromantic or, as the Roman Catholic Bishop of Shrewsbury has suggested, designed to empty marital vows "of all meaning." If you agree with such criticism and are getting married, then there is an easy answer: don't make one.

If you disagree and believe your situation will benefit from such an agreement, then there is an alternative to instructing lawyers to argue your patch and potentially create discord before harmony has even been given a chance. That alternative is collaboration. Yes you can instruct collaboratively trained lawyers; you can meet as a foursome and continue to be open and honest with each other as you agree contractual terms. 

Marriage is a legally binding contract and thinking about what that will entail or the repercussions if things go wrong, many (like the Law Commission) would view as sensible. Moreover the steps which can be taken to draw up a deed do not have to be divisive.


Thursday, 27 February 2014

LAW COMMISSION AND PRE-NUPS



Resolution today welcomed the report by the Law Commission, Matrimonial Property, Needs and Agreements: The Future of Financial Orders on Divorce and Dissolution, which makes two key recommendations.

The first is that ‘qualifying nuptial agreements’ (in particular, the agreements commonly referred to as pre-nups) become enforceable contracts.

The second recommendation is that guidance be produced on the meaning of ‘financial needs,’ so that it is clearer to anyone going through divorce and separation what the financial outcome is likely to be.

Resolution welcomed the recommendation to introduce legislation for ‘qualifying nuptial agreements,’ which would make pre-nups (and post-nups, which are becoming more widely used) legally binding – providing they meet specified requirements.

Resolution has been calling for this change in the law for a number of years.  With second marriages on the rise, people marrying later in life, and many couples entering marriage with money and property already to their name, demand for pre-nups has been on the rise.

Resolution doesn’t expect this measure to lead to every engaged couple in the country seeking a pre-nup, but for those couples who want to have one in place, it will make their legal situation much clearer and reduce uncertainty upon separation.

It’s also important to note that the court will still have the ability to review agreements in so far as they deal with people’s financial needs.

Individuals’ financial needs – in particular those of any children – are still the overriding consideration, and couples will not be able to make binding agreements which allow them to avoid future consideration of financial needs.

There is, therefore, a risk that we could end up with a two-tier arrangement, where one type of agreement is legally binding, and others still open to challenge – couples need to be aware of this, and that’s why the recommendation that people are required to seek legal advice is so important.
  
Resolution welcomed the Law Commission’s recommendation that the Family Justice Council should produce guidance to give people a better understanding of what is currently meant by ‘financial needs.’  It would, said Resolution, take some of the uncertainty out of financial outcomes following a divorce, which can often be a major cause of stress and anxiety during the process.

 Splitting up can be one of the most traumatic events anyone can go through in their lives. Resolution welcomes any measure that provides greater clarity and helps people have realistic expectations of what their finances might look like after separation, as well as greater confidence in any arrangements they make.

It is absolutely right that, when looking at financial needs, parents’ responsibilities to their children are the first consideration. This is one of the overarching principles in Resolution’s Code of Practice that members abide by.

Guidance on needs should encourage consistency, dispel myths and manage expectations. This will help anyone going through separation, even if they don’t have access to legal advice and support, or are trying to reach agreements on their own, during a very traumatic time.

Whilst welcoming the Law Commission’s recommendations, Resolution emphasised that wider reforms of the law surrounding separation and divorce were needed in order to support separating couples.

The last major reform to divorce law was in 1973, and Resolution believes more changes are needed to make the law relevant to modern day. For example, Resolution wants to see the removal of the need to assign blame if a marriage breaks down, which can often ramp up the conflict and cause unnecessary emotional distress.

Resolution would also like to see more wholesale reform of the law about financial provision on divorce, to provide clearer guidance about likely outcomes. It’s important that anyone going through a divorce has some degree of certainty about how long it will be before they achieve financial independence and have some degree of closure.




Monday, 24 February 2014

AN ART TO ART DISCUSSION


Recently I visited an exhibition of modern art. Is digital photography responsible for the obscure interpretation of still life in paintings? Now that cameras on our mobile phones coupled with photo-editing apps can help fumbling thumbs reproduce reality, painting has become a medium solely to demonstrate raw beauty and emotion.

To understand the meaning of some of these colourful works it is almost compulsory to browse with a gallery guide in hand. If you actually want to experience the impact you could do what many of the couples I followed round were doing: ignoring the guide and working out for themselves the effect and impact of some of the larger pieces. Trouble is that art can be a very personal encounter that isn't always made for sharing.

Net result (or maybe it was just the effect of a miserable, wet Saturday) was disagreement. Raised voices followed together with a hasty exit on my part to avoid embarrassment and the compulsion to hand out business cards, or, as in my last post, to usher the offending pairs to the tearoom.


Saturday, 22 February 2014

COLLABORATIVE LAW ISN'T REALLY A PICNIC



There were reports in the press this week that a couple had reached consensus after Mrs Justice Pauffley in the High Court urged them to sit round a table and have a cup of tea together. That ten years of dispute and litigation can end in such a manner is tribute to the power of the British cuppa as well as the persuasive powers of the Judge.

Food and drink is, of course, no stranger to the resolution of family matters. Indeed collaborative law is based around the concept of husband, wife and their lawyers sitting around a table with a pot of tea and biscuits in the middle. Sometimes there can even be fruit, cake and sandwiches too. Never ever underestimate the comfort value of sustenance or indeed its ability to be used as a distraction when needed. Don’t be misled though; the resolution of family disputes is no picnic.


Preparation, commitment and hard work by all concerned are required along with a willingness to compromise and work together to find solutions. When the issues are resolved, there is of course, nothing better than another cup of tea.


Monday, 17 February 2014

DIVORCE AND THE MODERN CHURCH



The Roman Catholic Church and divorce don’t really go hand in hand. However, last year Pope Francis set a date in October for a summit on family issues and this week he meets with his cardinals to prepare for that summit. Questionnaires handed out in parishes around the world show that there is a growing divergence between the Church’s teachings and the way believers live their lives. It seems that the Pope is keen to assist divorcees who have remarried and as a consequence are currently denied the opportunity to take Communion, because in the eyes of the Church they are committing adultery.
Theorists suggest that the answer may lie in the Church granting more annulments (although a civil divorce would still be necessary if the marriage is to be ended legally). Unfortunately and rather unsurprisingly the Church is unable to process the existing backlog of applications.
Well the wheels in the Vatican may turn slowly but for those who maintain that we are still living in the Dark Ages, it is worth pointing out that England itself has moved on from the days of Henry VIII when the failure of Rome to grant an annulment resulted in: 
divorce and beheading, excommunication, the foundation of a new Church, destruction of the monasteries, confiscation of Church lands and the burning of martyrs at the stake.