Public health warning marriage can seriously damage your wealth

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Information about Public health warning marriage can seriously damage your wealth
Law

Published on October 1, 2014

Author: BoltBurdon

Source: slideshare.net

Description

We examine the growing popularity of the pre-nup and the extent to which they are now enforced by the Courts. We also explore the financial claims available to both married and unmarried couples on separation, looking at the Court’s approach to each and the steps which can be taken to protect your property and assets.

PRESENTED BY DARRELL WEBB & ANNA BURGHAM

 There is currently no legislation in place to protect the rights of cohabiting couples, as there is for married couples.  So no ‘special status’ for cohabiting couples.  The only recourse available where a dispute arises is in contract law or complicated trust law, which can often result in an outcome that is unsatisfactory to one or both of the parties.

The Legal ownership:  Sole Name – One legal owner  Joint Tenants – Two or more legal owners all having the same interest  Tenants in Common – Two or more legal owners with separate defined interests View slide

Express declaration Where an express declaration as to how the parties wish to hold the beneficial interest exists it is conclusive ownership. Resulting trust A ‘resulting trust’ arises when someone other than the legal owner of the property has made a direct financial contribution towards all or part of the purchase price of the property and there is nothing to suggest that the contribution was intended to be a gift or a loan. Constructive trust A ‘constructive trust’ arises where two or more people acquire a property with a common intention that it is to be shared, although the legal ownership is not in all their names. View slide

Express Declaration:  Transfer Form (TR1)  Declaration of Trust  Cohabitation / Living Together Agreement

 How is the property to be owned.  Who will pay the mortgage and household bills.  Who is responsible for decorating, maintenance and repairs to the property.  Pension provision, insurance policies and bank accounts.  Who will do the cooking, cleaning, emptying the dishwasher etc.  What happens if there are children.  What will happen if you separate.

The orders fall into two main categories: income orders and capital orders. The income orders are:  Periodical payments (maintenance)  Secured periodical payments The capital orders are:  Lump sum orders  Property adjustment order (for property to be transferred or held on trust)  Orders for sale  Pension sharing orders

In deciding whether to make any of the above orders the Court must consider:  Income, earning capacity, property and other financial resources of the parties  The financial needs, obligations and responsibilities of the parties  Standard of living enjoyed by the family  The age of the parties

 Any physical or mental disability of either of the parties  The contributions which either party has made or is likely to be made in the foreseeable future  The conduct of each of the parties  Any benefit which, by reason of the divorce, either party will lose the chance of acquiring  The existence of a pre-marriage agreement All the circumstances of the case including the welfare of any minor.

Miller v Miller / McFarlane v McFarlane [2006] UKHL 24 Needs – ‘In most cases the search for fairness largely begins and ends at this stage. In most cases the available assets are insufficient to provide adequately for the needs of two homes’ Compensation – ‘This is aimed at redressing any significant prospective economic disparity between the parties arising from the way they conducted their marriage’ Sharing – ‘The parties commit themselves to sharing their lives. They live and work together. When their partnership ends each is entitled to an equal share of the assets of the partnership, unless there is a good reason to the contrary. Fairness requires no less’

‘The parties' matrimonial home, even if this was brought into the marriage at the outset by one of the parties, usually has a central place in any marriage. So it should normally be treated as matrimonial property for this purpose. As already noted, in principle the entitlement of each party to a share of the matrimonial property is the same however long or short the marriage may have been.’

 Form A  Form E, Chronology, Statement of Issues, Questionnaire  First Appointment Hearing  Financial Dispute Resolution Hearing  Final Hearing

 Pre-nuptial Agreement – must be entered into not less than 21 days before the marriage.  Post-nuptial Agreement – can be entered into at any time after marriage.

‘Not worth the paper they’re written on’ ‘They’re totally ignored by the Courts’ ‘Absolutely no point in having one’ ‘A complete waste of money’

Radmacher v Granatino [2010] “The Court should give effect to a nuptial agreement which is freely entered into by each party with a full appreciation of its implication, unless in circumstances where it would not be fair to hold the parties to the agreement.”

Timing – The agreement should be signed not less than 21 days prior to the marriage. Importance of agreement – Would the parties have married without the agreement? Personal circumstances, duress and undue pressure – are there any warning signs.

 Independent Legal Advice – The parties must understand the terms and legal effect of the agreement.  Disclosure – Full and frank financial disclosure should be provided.  Negotiation – It is important that the parties had the opportunity to negotiate the terms of the agreement.

 Non-Matrimonial Property – there is nothing inherently unfair in distinguishing between wealth accumulated during the marriage and pre-marital property or property that one party expects to receive from a third party.  Children – the agreement cannot prejudice the reasonable requirements of any child of the family.

 Need– the agreement should not result in one party being left in a predicament of ‘real need’  Changing Circumstances – the agreement should as far as possible plan for future changes in the parties’ circumstances.  Generally – the parties views as to what constitutes a ‘fair’ division of assets on separation will be important, particularly where they address existing circumstances.

 If you have pre-acquired wealth or assets.  If you are likely to receive a substantial gift or inheritance from your family.  If you have already been through a messy divorce or separation and wish to avoid going through it again.  If you have business assets or interests that you want to keep separate from the matrimonial assets.

 Individual Property  Specific property  Gifts and inheritance  Joint Property

 Housing needs  Income needs  Standard of living  Other needs

What may be considered fair today, may not be considered fair in the future. The mere passage of time is likely to cause an agreement to become unfair. If there has been a change in circumstances this may cause the agreement to become unfair. THE ANSWER – REVIEW, REVIEW,REVIEW!!!!

Please contact us with enquiries: Address: Providence House Providence Place Islington London N1 0NT T: 020 7288 4700 E: info@boltburdon.co.uk W: www.boltburdon.co.uk

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