Civil partnerships – the dissolution process

civil partnership dissolution

Civil Partnerships – the dissolution process

What is a Civil Partnership? Initially introduced by the Civil Partnership Act 2004, civil partnerships were devised to provide a relationship status for same sex couples akin to, but different, to a marriage, which was not available to same sex couples until 2014.

(Civil Partnerships have since been made available to heterosexual couples as of 31st December 2019, pursuant to the Supreme Court ruling in favour of Rebecca Steinfeld and Charles Keidan.)

Associate Aaron Williams explains the civil partnership dissolution process.

A civil partnership is formed once both individuals, both of whom are at least are 16 years of age, have signed the civil partnership document in the presence of a registrar and two witnesses. Unlike a marriage at civil ceremonies readings, songs or music cannot have any religious connotations, e.g. readings from the bible or hymns etc.

The differences between a civil partnership and marriage are nominal, but small differences do exist:

  • Civil partners cannot call themselves ‘married’ for legal purposes
  • A marriage is ended with divorce by obtaining a decree absolute, while a civil partnership is ended with dissolution by obtaining a dissolution order
  • Adultery is not a valid reason to dissolve a civil partnership, but it can be used to divorce

Despite the small differences, legally speaking a civil partnership broadly confers the same rights to civil partners, when concerning the laws that govern wills, administration of estates and tax exemptions.

Dissolution of Civil Partnership

Should you come to the difficult decision that the relationship is over, and you legally wish to end your civil partnership, an application will need to be made to court for a dissolution order. To apply for a dissolution order, the civil partnership must have been in place for a minimum period of one year.

Much like the divorce process, until the implementation of the no-fault divorce process in April 2022, the court work on a fault-based system. To start the dissolution process, you will need to prove to the court that the civil partnership has ‘irretrievably broken down’ and that there is no prospect of reconciliation; to prove this one of four facts need to be established, these facts are:

  • Unreasonable behaviour – Your civil partner has behaved in such a way that you cannot reasonably be expected to live with them (whilst adultery in of itself cannot be cited as a fact for the parties’ separation in of itself as in divorce proceedings, it can be cited as an example of unreasonable behaviour)
  • two years’ separation and consent – You and your civil partner have ‘lived apart’ for a continuous period of at least two years prior to the presentation of the dissolution petition and your partner agrees to the dissolution being granted
  • two years’ desertion – Your civil partner has deserted you for a continuous period of at least two years immediately proceedings the dissolution petition, and
  • five years’ separation – You and your civil partner have lived apart for a continuous period of at least five years prior to the presentation of the dissolution petition (civil partner’s consent not required).

Dissolution Process – the timeline

  • Preparation of Dissolution papers – You as the civil partner who lodges the petition (known as the petitioner), will be required to particularise within the dissolution petition how the Civil Partnership has ‘irretrievably broken down’, using one of the facts detailed above. The paper will then need to be forwarded to Court with the requisite Court fee.

If completed correctly the Court will ‘issue’ the petition and send a copy to your civil partner who will be referred to as Respondent going forward.

  • Acknowledgement of Service – Your civil partner will receive a copy of the Dissolution Petition, together with a copy of a form known as an Acknowledgement of Service. The document needs to be completed within seven days of receipt, wherein they confirm receipt of the dissolution papers and confirm whether they seek to contest the dissolution petition or not.

Should your civil partner seek to contest the dissolution, they will have a further 21 days to file an ‘Answer’ to the Court, detailing why they do not agree to the dissolution.

  • Confirming the Petition – The next stage in the process is for the petitioner to sign a statement of truth, confirming that the circumstances remain the same and that they do not wish to alter the content of their petition. This is then filed with the Court with a request that the Conditional Order is pronounced.
  • Conditional Order – The second stage in the dissolution process (Decree Nisi in divorce), if the dissolution petition is uncontested by your civil partner, the Court will consider the content of the papers filed by parties and will confirm whether it is satisfied the reasons cited within the dissolution petition are sufficient for the dissolution to be granted. If approved, any financial order can now be implemented. It does not mean that the civil partnership has been dissolved at this point.
  • Final Order – six weeks and one day after the date of the Conditional Order the petitioner can apply for the ‘final order’ which is the document that will ultimately bring the civil partnership to an end. Should the petitioner not apply, within three months after this time period has elapsed (total four and a half months) then the Respondent can apply to court for the Final Order to be made.

The process in total should take approximately four to six months to complete, however, this is dependent on a multitude of elements, including, whether the dissolution is agreed, how promptly parties complete and file documents and the Court’s availability.

If there are any disagreements between parties regarding any financial settlement, then it can result in further delays until any ultimate settlement is agreed.

Dissolution – Finances

As with married couples, upon separation any dispute between civil partners as to the title or possession of property either partner may apply to Court to reach a settlement. The Court’s principle aim is to reach a fair settlement upon consideration of each parties’ needs and resources. When settling assets, the Court will look to equally split the assets, unless convinced by either party that a departure from equality in their favour is justified.

The Court can make several orders to settle the finances which are principally as follows:

  • A sale of a property, a transfer to one person, or put it into a trust
  • A lump sum (whole or in instalments) or a series of lump sums, eg to pay off a mortgage
  • Typically, in scenarios where there is income inequality between the parties, it can order one party to pay maintenance to the other either for the rest of their joint lives, until the recipient remarries, or for a fixed period.
  • It can order money for school fees etc but not usually for general child maintenance
  • It can order that a pension be shared or attached. Sharing is where funds are transferred or split between the parties; attachment is like maintenance direct from a pension but can also be a lump sum.

If you are affected by any of the issues outlined here, please do get in touch today. We are here to help.

The Role of Cafcass

role of cafcass

The role of Cafcass

When your child is subject to family proceedings, there may be a barrage of different voices and perspectives: from parents, their legal representatives, and even the wider family. Unfortunately – and unintentionally – it is all too easy for the bigger picture to become blurred, and this is where Cafcass (the Children and Family Court Advisory and Support Service) will step in. But who is Cafcass, what is its role, and why is it involved? Family law paralegal Georgia Smith explains.

Who is Cafcass?

The Children and Family Court Advisory and Support Service, or Cafcass, is an independent organisation whose primary role is to represent the interests of children. Cafcass can become involved in private law child arrangements proceedings, where separated parents are unable to agree on arrangements, or in public law applications brought by social services, where there are concerns about the welfare of a child.

What is the role of Cafcass in Private Law Proceedings?

Upon filing an application with the Court, the case will be referred to Cafcass, which will initially write to both parents to explain its role within proceedings and inform them of their allocated case worker.

Cafcass will then carry out safeguarding checks. This will include contacting the police and the local authority, to ascertain if any of the parents are known to them, and if there are any known welfare or safety risks to the child(ren).

Cafcass will then schedule a telephone interview with each parent. Although this may seem daunting, the case worker will speak to each parent individually, with a view to discovering any concerns that  they may have about the welfare and safety of their child(ren). It is imperative that parents are open, honest and remain child-focused. After all, Cafcass are working towards a fair resolution, with the child(ren)’s best interests at the forefront of their consideration.

Following this, a safeguarding letter will be prepared and sent to the Court. This report will detail the outcome of the safeguarding checks and any issues raised by the parents during the telephone interviews. The safeguarding letter will normally be made available to the parents, their solicitors and the Court, at least three days before the first hearing.

The role of the Cafcass worker is to work with both parents to reach a mutual agreement that is in their child(ren)’s best interests. If at the first court hearing it is apparent that  the parents are unable to reach an agreement and there remains welfare concerns raised by one of the parents, then the Court may direct that Cafcass prepare a Section 7 report.

This report will primarily focus on the welfare of  the child(ren) and is prepared for the Court in accordance with the welfare checklist contained within Section 1 of the Children Act 1989. A range of factors are taken into consideration, including:

* the ascertainable wishes and feelings of the child concerned (considered in the light of the child’s age and understanding)

* the child’s physical, emotional and educational needs

* the likely effect on the child of any change in their circumstances

* the child’s age, sex, background and any characteristics which the court considers relevant

* any harm which the child has suffered or is at risk of suffering

* how capable each of the parents, and any other person who the court considers the question to be relevant, is of meeting the child’s needs

* the range of powers available to the court in the proceedings.

Dependant on the age and maturity of the child(ren), Cafcass may speak with them to ascertain their wishes and feelings. Although Cafcass is often referred to as the ‘voice of the child’, they may consider that the child’s view is not in their best interests, so it is important for parents to understand that a child’s opinion may not always be decisive and attempts should not be made to influence their wishes.

Upon receipt of the Section 7 report, each parent should expect their solicitor to analyse the report in detail. Cafcass will make recommendations to the Court and usually the Judge will not depart from these recommendations without persuasive evidence to the contrary.

That being said, the report is not always considered determinative and of course, the recommendations can be challenged. Experienced children solicitors understand that family relations are complex and often assumptions can be made on limited information. It is therefore essential that parents work with their solicitor, and Cafcass, to reduce the issues in dispute and focus on the best interests of  their child(ren).

If you are affected by any of the issues outlined here, please do get in touch today. We are here to help.

What happens to my pension if I separate or divorce?

pension on divorce Liz Cowell

What happens to my pension if I separate or divorce?

When married couples separate, the divorce itself is intended to be a straight forward procedure, even more so when no fault divorce is made law. But with divorce comes the issue of resolving your financial arrangements. Partner Liz Cowell explains.

Everything relevant is considered: the assets of the marriage, which might be the matrimonial home and/or other properties – perhaps a holiday home – any business interests, savings, investments and, of course, pensions.

Pensions can be the most valuable asset on divorce, particularly if one or both of the parties are members of a Final Salary/Defined Benefit Pension Scheme, as these provide specific benefits based upon salary and service, as opposed to a Money Purchase arrangement, where a member will receive benefits retained in an invested “pot” to which contributions have been invested over time.

In fact there are a number of different types of pension, and they can include complicated investment schemes which are, frankly, outside most individuals’ understanding and as a result likely to cause a great deal of confusion. Those who don’t seek guidance from an expert can find themselves being given incorrect and misleading advice from the most well-meaning of friends and acquaintances. If you base your claim on this type of misinformation, you run the risk of grossly under-settling. Always, always get expert advice.

What is offsetting?

In fact, it is very important to get advice at an early stage – even if you and your spouse are broadly in agreement regarding other matters – about financial arrangements after divorce, including how the courts are likely to deal with the pensions as part of any overall financial settlement.  There are various options available to the non-pension member, who may benefit from their spouse’s pension fund built up during the relationship, including Pension Sharing or Attachment Orders, or offsetting against other assets, such as savings or equity in a family property.

Offsetting is fraught with potential difficulties and individuals can underestimate what a pension fund is worth, instead accepting a smaller cash sum now rather than a specific portion of the pension fund designed to provide a retirement income for the remainder of a recipient’s life.

In more complicated cases, particularly where the pension is already in payment due to retirement or ill health, it is common for us to advise that you seek advice from a pension expert – an actuary – who will provide a report about the different pension needs of both parties ,and the options within the court process. The conclusions of such reports are critical in informing the court about how issues in relation to pensions should be resolved.  Again, we must emphasise how very important it is, from the outset, that you have a lawyer who is confident in his or her knowledge of pension issues.  The correct questions must be, asked and it may be necessary to challenge, vigorously, any conclusion, making certain your interests are properly protected.

Pensions and assets: what does the Family Court consider?

Because of the various options available for the division of pension assets upon divorce or dissolution, there are many myths surrounding them.

For example, the recipient of a Pension Sharing Order does not receive an immediate lump sum equivalent to the “share” and will likely have to wait until their 60″ birthday or such other time defined by the scheme in which the benefits or held, or are transferred, to realise any benefits. Further, if the person having their pension deducted has already retired, they will experience an immediate deduction in any income they are already receiving, even if the recipient might not receive theirs for several years because of age conditions. This in turn has an impact on the extent to which other financial orders can be met, for example maintenance provision.

When deciding how to deal with your pension, and assets, the Family Court will consider several different criteria; it may be a Pension Sharing Order is not the best outcome based on the length of your marriage, the value of your pension, your length of service and the value of the other matrimonial assets. If a marriage is short, and pension funds limited, a court might prefer to “offset” any interest in pension funds generated during the marriage, against an interest in other assets. It is important to note that no two situations are the same and you should have a lawyer who understands these complexities and is able to put forward the best case to suit your own needs and circumstances.

If this is a situation currently affecting you, or you think you might need advice, please do get in touch.  We’re happy to help.

The Millionaire’s Defence

the millionaire defence

The Millionaire’s Defence

What Is The “Millionaire’s Defence”?

When a couple get divorced they are both obliged to provided full financial disclosure. The “millionaire’s defence” was a term created following the divorce case of Mr and Mrs Thyssen-Bornemisza in 1985, when the very wealthy husband said that he did not need to provide full financial disclosure in his divorce proceedings as he had sufficient wealth to pay any reasonable sum that a judge ordered him to pay to his wife.

Partner Fiona Wood, who is particularly accomplished at dealing with divorce cases where there are substantial and complex assets, explains further.

What is the benefit of running this defence?

Many wealthy people would prefer not to provide full details of their wealth, which may include significant business assets and interests under family trusts. Successfully running this defence means that these details do not have to be provided. Furthermore, formal valuations are often obtained of business assets in divorce proceedings and not having to provide sufficient information to facilitate this and not having values attributed to these assets in court proceedings, which can be attended by the press, can have its attractions.

In what circumstances can I run this defence?

Firstly, you need to be very wealthy. Secondly, the sharing principle should not apply to your divorce. Since 2000, assets that have been acquired during a marriage are usually subject to the sharing principle when a couple divorce, provided both their needs can be met by doing this. Therefore if you are very wealthy, but much of your wealth was accumulated during the marriage, the Judge will want you and your spouse to provide full disclosure of all your assets and may also want experts to value these assets, if their values cannot be agreed by you and your spouse, as the judge’s starting point, when considering a fair settlement, will be an equal division of these assets.

In the 2013 divorce case of AH v PH, the husband stated that he had assets worth £76 million, which had been gifted to the husband by his very wealthy family before the couple married. The husband’s assets were considered non-matrimonial and therefore not subject to the sharing principle. The judge accepted that full financial disclosure was not required from the husband as the wife should receive a needs based divorce settlement, based upon what she needed to fund the purchase of suitable house and a capital sum to meet her income needs. The wife received £7.775 million.

Is the Millionaire’s Defence relevant to other relationship claims?

If an unmarried couple separate and they have children who are under the age of 18, the parent that the children live with can make a financial claim against the other parent for the provision of a house, a car and other capital needs until the children finish school or university, plus child maintenance. These applications are made under Schedule 1 of the Children Act. Whilst financial disclosure usually has to be provided by both parents in these proceedings, if the paying parent is very wealthy they may be able to rely on the Millionaire’s Defence.

In the case of A (A Child) in 2014, the mother made a Schedule 1 application and the father ran the millionaire’s defence. The father was a member of wealthy ruling family from a middle eastern country. The mother appealed the court’s decision on the basis that the court did not make adequate financial provision because of the father’s failure to provide full financial disclosure. The Court of Appeal rejected the mother’s appeal and confirmed that where there is significant wealth there is no need to examine in close detail the father’s financial resources.

It is fair to say that the Millionaire’s Defence will only be run successfully in a limited number of cases. However, for the very wealthy, who are keen to keep details of their wealth private, it is a defence that they may want to consider using.

If you would like to know more about the issues raised here, please get in touch today. We are here to help.

Home schooling and shared care: how to manage this successfully

home schooling and shared care

Shared care and home schooling

Due to Covid-19, over the past 15 months parenting has for been particularly challenging. And for many separated parents, changes such as lockdowns and schools closures have been thrust upon them, without the chance to discuss shared care arrangements with the other parent.

It might be that you, as parents, have been home schooling your children for many years anyway, but for many this was new, and largely unknown, territory. However now normal life beckons, there’s no disputing the fact that some parents have really taken to home schooling and want to continue. How best to do this, so that all involved are happy with the arrangements, and the children thrive? Associate Melissa Jones explains.

How do I implement the same routine for the children at the other parent’s house?

It is important to remember that despite the urge to set out a clear timetable for the children each day, this might not be practical, depending on the ages and needs of your children and also whether you or the other parent needs to work from home.

When you co-parent you are reliant, to a certain degree, on flexibility and trust in the other parent. Each parent has their own style of parenting and while you may not agree on everything regarding the children, the ability for your children to experience secure and stable upbringings across two homes is possible.

Home schooling: the Parenting Plan

For co-parents, one handy and almost essential tool is a “Parenting Plan”. In essence, it is a written document that records the day to day and practical arrangements of parenting.  Also, if you are looking to make an application to the family court for a Child Arrangements Order (Section 8 Children Act 1989), in the future, the court will expect you to have looked at a parenting plan.

The Children and Family Court Advisory and Support Service  (CAFCASS) which represents children in family court matters in England, describes the benefits of making a Parenting Plan below:

  • it will help everyone involved know what is expected of them
  • it acts as a valuable reference to go back to
  • it sets out practical decisions about the children, such as living arrangements, education and health care.

You can see more detail here.

How can I include home schooling in a Parenting Plan?

There is a section dedicated to “education” in each parenting plan, so, if you are looking to create a plan for the first time or even if you already have a plan, a good talking point would be home schooling and how you can work together to achieve this. You might find that one parent really likes the idea of planning the day around available resources online, where a number of celebrities are producing content designed to fall in line with the national curriculum. On the other hand, it might be that the other parent is really hands-on and wants to use this time to teach the children practical skills such as woodwork, gardening, baking, and more.

How will I know what the other parent is planning?

For many years now family law practitioners have been encouraging the use of a “communication book” with the idea being that one parent records useful information about their time and activities with the children, and the book is then passed to the other parent, on handover.  One way this could be to send electronic updates or set up a designated “email” just for communication about child arrangements. You could even develop your own form of home work diaries and there are plenty of apps out there that could help you stay connected as a family.

In the end, what’s important is communication – there is no question that no matter what the situation, children always benefit when both parents talk to one another and agree the way forward.

If you are affected by any of the issues outlined here, please do get in touch today. We are here to help.

Separated parents and international travel during Covid restrictions

separated parents and travel during covid

Separated parents and international travel during Covid restrictions

From 17 May, the ‘Stay in the UK’ regulation ceased and international travel was allowed to restart, albeit governed by a new traffic light system.  Half term is coming up for many school children and of course some parents will want to take their children on holiday.  What must you consider? Associate Melissa Jones explains.

Firstly, if one parent wants to take a child abroad, whether permanently or temporarily, the other parent with parental responsibility needs to consent, and secondly, anyone with the benefit of a Child Arrangements Order (for the child to live with them) can remove the child from England and Wales for a period of less than one month without the consent of the other parent with parental responsibility.

What about Covid-19?

Because the situation is relatively fluid, it might be that the parent not going on holiday is nervous at the thought of the children travelling abroad, not least because of the fear that once in the destination country, your ex and your children might face a period of self-isolation upon their return. If you are the one wishing to travel bear in mind the so-called “traffic light system” may change and you could find yourself rushing to the borders to fly back to the UK at very little notice, in order to avoid going into quarantine. And there is the ever-present worry around the risk of the children either contracting the virus or transferring it.

Written consent

If you do wish to travel abroad, the first step is to get written consent from other parent before travelling but even if you do, they may change their mind. Try to have an open discussion with the other parent and understand and alleviate any fears they may have by confirming:

* travel dates and times

* where you will be staying

* how you will be keeping the children safe throughout the holiday

* you are both aware of, and agree to, the rules around quarantine and testing if you’ve been in an amber list country and you both understand the restrictions these rules impose

Compromise and flexibility are key.

What happens if we cannot agree?

You can make an application to the court for a Specific Issue Order and the court will decide the matter. If an agreement cannot be reached and one parent fears the other parent will travel regardless, they can apply to the court for a Prohibited Steps Order.

Will the court hear this matter in time?

The court is dealing with a significant amount of cases and there is no guarantee that it will be able to deal with an application such as this as quickly as might be necessary. Our advice is to deal with this matter before it becomes an urgent one. There are alternatives to making a court application, such as engaging your solicitor and seeing if the matter can be negotiated or referring to mediation to see if an agreement can be reached.

If you are affected by any of the issues outlined here, please get in touch today. We are here to help you.

The Potanina divorce: the highest-value divorce case in English legal history?

Natalia_Potanina

The Potanina divorce: the highest-value divorce case in English legal history?

The Potanina divorce highlights the issue that those who have divorced abroad can apply to get a better settlement in England. Partner Fiona Wood explains.

Last week the Court of Appeal overturned a decision of the High Court, therefore allowing Natalia Potanina to bring her divorce claim in England. Her husband, Vladimir Potanin is stated to be worth $20 billion and to have a controlling stake in Nornickel, one of the world’s largest producers of nickel and palladium.

Divorce in Russia

The couple married in Russia in 1983 and lived there for most of their marriage. They divorced in Russia in 2014. Natalia received a divorce settlement of $41.5 million from the Russian court but says that she should have received a far greater share of her husband’s fortune. She informed the English High Court that she had “made exhaustive efforts to obtain justice in Russia” but that the sum she was awarded “does not even begin to meet my reasonable needs”.

English law

Couples who have links to the UK but who have divorced overseas and believe they have been treated unfairly can apply for permission to bring their case to be heard by the English courts under Part III of the Matrimonial and Family Proceedings Act 1984. English law is far more generous to the financially weaker spouse, usually the wife, than the law of many other countries, making such an application an attractive option.

Divorce tourism

Natalia has had a house in England since late 2014. Her attempt to bring proceedings in the English courts was blocked by the High Court in 2019 on the basis that the couple had little connection with Britain. A judge said that if her claim went ahead “there is effectively no limit to divorce tourism”.

Court of Appeal

However, last week the Court of Appeal reversed that decision and granted Natalia permission to bring her case in the High Court in London. Lady Justice Eleanor King in her ruling last week noted that the 1984 Act was not just designed for families with “massive or even substantial wealth” to bring cases. She went on to say “No doubt to most people, whether affluent or poor, the sums received by the wife made her a rich woman. Everything is, however, relative. The wife’s settlement represents only a tiny proportion of the vast wealth of this family, all of which has been accumulated during this very long marriage”.

It is not yet known if Vladimir Potanina will appeal this decision to the Supreme Court. Also, if the High Court does adjudicate on their divorce settlement, we do not yet know how generous they will be. However, this case does highlight the fact that those who receive divorce settlements abroad can potentially have a second bite at the cherry and try to obtain a second divorce settlement in England if they have links here.  Furthermore, now that we are no longer part of the EU this claim is also now potentially available to EU nationals.

Enforcing English divorce orders against assets in other countries

It is, however, worth noting that obtaining a second divorce settlement in England can be a pyrrhic victory if the majority of the husband’s assets are outside of the UK. Enforcing English divorce orders against assets in other countries can be extremely difficult. Despite this, I am sure that there are many wealthy ex-wives around the world watching very closely what happens in the Potanina case.

 

If you are affected by any of the issued raised here, please get in touch today. We are here to help.

The Bill and Melinda Gates’ divorce

Bill and Melinda Gates divorce

The Bill and Melinda Gates’ divorce

Our managing partner, Amanda McAlister, offers her expert opinion on the news that Bill and Melinda Gates are to divorce, and looks at some of the issues involved.

I woke this morning to the news that Bill and Melinda Gates were to get divorced. Minutes later my phone starting ringing, as I took one request after another from journalists wanting to cover the story and get my opinion on what a later-in-life divorce involves. It’s no exaggeration to say that almost every media outlet around the world is keen to look closer into why this multi-billionaire couple would want to part after 27 years of a seemingly very successful marriage.

Gates, 65, the fourth richest man in the world, founded Microsoft in 1975 and met his future wife Melinda in 1987, the year he became the world’s youngest billionaire. In 2000 they established the Bill and Melinda Gates Foundation. 

They have three children – Jennifer, 25, Rory, 21, and Phoebe, 18 – and in the message announcing their divorce, they wrote:

“After a great deal of thought and a lot of work, we have made the decision to end our marriage.

“Over the last 27 years, we have raised three incredible children and built a foundation that works all over the world to enable all people to lead healthy, productive lives. We continue to share a belief in that mission and will continue to work together at the foundation, but we no longer believe we can grow together as a couple in this next phase of our lives. We ask for space and privacy for our family as we begin to navigate this new life.”

Prenups and separation agreements

Court documents reveal that the couple do not have a prenuptial agreement. We’re told Melinda, 56, filed for divorce at a court in Washington state, saying “this marriage is irretrievably broken” when asked to explain the split, also revealing there was no prenuptial agreement when they wed on a Hawaiian golf course in 1994.

However, famously Bill used a pro and con list on a whiteboard to decide to whether or not to ask Melinda to marry him, so I suspect the couple may well have approached the ending of their marriage in the same carefully thought-out manner.

Indeed, the document, filed Monday in King County Superior Court in Seattle, notes that the pair has a “separation agreement.” A separation agreement is usually signed at the end of a marriage and lays out the terms of the split – it will, apparently, dictate how the couple will divide up their assets, which include the family home, a $125million compound overlooking Lake Washington on the outskirts of Seattle, a mansion in San Diego, a Santa Fe ranch, a countryside retreat in Wellington, Florida, a lakeside lodge in Wyoming which used to be home to Buffalo Bill and a garage full of Porsches, Ferraris and Lamborghinis. In fact, the Gates fortune is estimated at well over $100 billion, so I’m not surprised Melinda has not requested spousal support, according to the filing.

Divorcing after a long marriage

It’s interesting to note that there has been a significant increase in the number of couples filing for divorce who have been married for more than 20 years. I think it’s significant that the Gates’ youngest child recently turned 18: it’s reasonable to assume the couple wanted to wait for all their children to reach adulthood before they announced their formal separation, and I would also say it takes guts to do this after such a long marriage – perhaps even more so when your relationship, and your life, is so public.

How would this divorce be treated here?

Technically, separation agreements aren’t legally enforceable under UK law. But if both parties have been open and honest about their finances and taken independent legal advice about the agreement, then it’s entirely likely the court will decide you should stick to it.

However, under our jurisdiction there is also what’s known as the “millionaire defence”. This is a term created following the case of Thyssen-Bornemisza v Thyssen-Bornemisza (No) [1985] FLR 1069 where a wealthy party put forward a defence to providing full disclosure, on the basis that he had sufficient wealth to pay a lump sum or maintenance to the financially dependent party. In other words, why should the court go to the trouble, time and expense of investigating the millionaire’s means, when it is clear that he/she can meet whatever reasonable order the court is likely to make?

This defence causes some controversy as the court has an obligation to consider the parties’ financial resources properly. Furthermore, in order for the court to conclude that an order is fair and reasonable, it must consider the full and frank disclosure of all material facts, documents and other material. Nevertheless, it remains a viable option for the very wealthy, who are hopeful of keeping the precise details of their finances entirely private.

Keep it respectful

When Amazon founder Jeff Bezos and his wife MacKenzie announced their split after 25 years of marriage, they emphasised that the decision was mutual. But even when a couple part on amicable terms, the financial untangling is likely to be complex, simply because the sums involved, and the assets held, are so huge. However, neither party has said anything derogatory in public about the other, and both have moved on: MacKenzie married again two years after the divorce, her ex-husband Jeff has been with his girlfriend for two years.

I hope Bill and Melinda Gates both go forward in positivity and enjoy a fulfilling and happy future, and in particular I applaud their decision to continue to work together on their charitable foundation – showing respect for one’s ex is vital if they are to be a couple who, instead of being known for how wrong they got their divorce, are known for getting it right.

 

If you would like to consult one of our expert family lawyers about any aspect of divorce or separation, please do get in touch today. We are here to help you. 

More love and marriage…

Sarah Jessica Parker

More love and marriage…

We had such a great response to our recent Love and Marriage blog that we thought we’d add some more quotes to our special selection of celebrity words of wisdom about love, relationships and marriage.

Because there’s no doubt that on this topic everyone has their own opinion: some have their own personal deal-breakers, some know for certain the one thing that will melt their heart – and a lot of people will tell you it takes hard work and commitment.

See if you agree!

Katharine-Hepburn

“I often wonder whether men and women really suit each other. Perhaps they should live next door and just visit now and then.” Katharine Hepburn

 

Albert Einstein

“Men marry women with the hope they will never change. Women marry men with the hope they will change. Invariably, they are both disappointed.” Albert Einstein

 

Justin Timberlake and Jessica Biel

“We have a couple of rules in our relationship. The first rule is that I make her feel like she’s getting everything. The second rule is that I actually do let her have her way in everything. And, so far, it’s working.” Justin Timberlake

 

Anne Bancroft

“The best way to get most husbands to do something is to suggest that perhaps they’re too old to do it.” Anne Bancroft

 

Prince Philip and Queen Elizabeth,

“I think the main lesson we have learnt is that tolerance is the one essential ingredient in any happy marriage.” Prince Philip, Duke of Edinburgh

 

Rita Rudner

“I think men who have a pierced ear are better prepared for marriage. They’ve experienced pain, and bought jewellery.” Rita Rudner

 

Sarah Jessica Parker

 

“It seems so silly, but I think you’re very lucky if you like the person. I still just really like him.” Sarah Jessica Parker

10 top tips for business owners facing divorce

top 10 tips for divorcing business people

10 top tips for business owners facing divorce

Divorce is never easy, but it can be more complicated when you’re a business owner. Partner Fiona Wood, who is particularly accomplished at dealing with divorce cases where there are substantial and complex assets, offers her advice.

1 Don’t panic! The divorce process is NOT designed to damage a business so that it is no longer viable. The income produced by the business will often be the business owner’s main source of income both before and after divorce. This income may also need to fund child maintenance payments and sometimes spousal maintenance payments after a divorce, so damaging the business would be counter- productive.

2 Your business, along with your and your spouse’s other assets, will be considered a relevant asset within the divorce proceedings. You will need to provide information relating to the business, even if you are not the sole owner. If there are other business owners you should inform them of your divorce, if you have not already done so.

3 Your business is likely to be valued by an independent accountant, instructed jointly by you and your spouse, within the divorce. They will look at the value of your shares, how much money, if any, you can raise through the business to assist with the divorce settlement and the sustainable income that can be taken from the company going forward.

4 It is the net value of your shareholding that will be taken into account, after notional costs of sale and tax have been deducted. Whilst you may not be selling your shareholding, your shares will be valued on the basis that you are selling them.

5 Valuing a business is an art not a science, so different accountants have different approaches, which results in some accountants providing more optimistic valuations than others. It is therefore important to take advice on which accountants would be most suitable for your situation.

6 If your spouse also has shares in the company, it is unlikely that you will both remain shareholders in the company after your divorce. A few divorcing couples agree to continue running their business together and to both remain shareholders after they divorce. However, in the majority of divorces one spouse transfers their shares to the other as part of the divorce settlement.

7 The date of separation may be relevant if one spouse is to transfer their shares in the company to the other. If shares are transferred from one spouse to another in the tax year of separation, the Capital Gains Tax liability that arises on the transfer is paid by the spouse who receives the shares as and when they sell the shares in the future. If the shares are transferred from one spouse to another after the tax year of separation, the spouse who is transferring the shares will have to pay any Capital Gains Tax liability that arises on the transfer shortly after the transfer.

8 Do not be tempted to transfer your shares in the company to a third party, in an attempt to reduce your spouse’s claims on divorce. Any disposals of assets that are at an undervalue can be set aside by a divorce judge, and if the disposal took place within the 3 years prior to the divorce the onus is on the spouse who “got rid” of the asset to prove that it was not at an undervalue.

9 Just because you have a business does not mean that your divorce settlement will end up being argued about in court. Once you have an appropriate valuation report a financial agreement can then be negotiated, without the need for a judge’s input.

10 Make sure that you obtain legal advice from an expert family solicitor who regularly deals with divorce cases where there are businesses.

If you are concerned about any of the issued raised here, please get in touch today. We are here to help.

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