Divorce Financials – The Process

As outlined in our blog “Divorce – The Financials” a Decree Absolute will bring your marriage to a legal end. However, it will not end your financial commitments between yourself and your former spouse. A decision will need to be made as to what will happen to the family home, bank accounts, possessions, pensions and other assets.

To sever all financial ties between yourself and your former spouse you will need to apply to the court for a Financial Order.

Mediation must be considered prior to making an application to the court. If a resolution cannot be reached you need to attend a MIAM and obtain a certificate before proceedings can be issued. We work hard to try to avoid wherever possible the need for contested court proceedings. In any event, if proceedings become necessary, we would act in your best interests to achieve the best possible outcome for your situation.

If you are unable to agree how to split your finances then you can approach the court and a Judge will help you decide how you will split up your money, property and possessions. To do this you must apply for a Financial Order. This process is sometimes referred to as ‘ancillary relief’.

Once proceedings are issued the court will set down directions including the requirement for financial disclosure and the case will be listed for a first appointment before a Judge. Disclosure is the provision of all financial documents including but not limited to:

  • bank statements for the last 12 months
  • credit card balances and often statements for the last 12 months
  • value of your home and all other property
  • current mortgage statement
  • pension valuations
  • business accounts for the last 2 years
  • P60 and wage slips if employed

The parties also have the opportunity to ask questions regarding the other’s disclosure. Ideally all disclosure is complete before the first hearing. This enables your legal representation to negotiate on your behalf at court. At this stage, if both parties reach an agreement and the Judge agree, the Judge can issue a ‘Final Order’. This will bring an end to the matter.

If there is no agreement, you will have to attend a Financial Dispute Resolution (FDR) hearing. An FDR is an informal meeting at court, both parties must attend unless the court orders otherwise. Both parties are encouraged to negotiate a settlement at this stage and the Judge will usually give an indication as to a final settlement if the matter proceeded to a final hearing, although it is not legally binding. However, if an agreement cannot be reached, the case will be listed for final hearing.

At the final hearing, the Judge will decide the outcome based on all the evidence. This decision will be shown on a ‘Final Order’ giving details of any arrangements that have to be made as part of the Order. Both parties must obey this decision.

Sarah Watson is a solicitor with over 10 years of experience. She is different to other lawyers, she genuinely cares about the outcome of your case. She will guide you and support you in any way she can.

If you require assistance in relation negotiating a financial settlement with your former spouse or you believe court proceedings are the only option (it does not matter if you have started the process yourself and need guidance) please contact one of our friendly team at Watson Legal either by calling 01279 466910 to book your free 30 minute consultation with Sarah or email info@watson-legal.com

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Divorce Financials – Who Gets What?

A Decree Absolute will bring your marriage to a legal end. However, it will not end the financial tie between yourself and your former spouse. A decision will need to be made as to what will happen to the family home, bank accounts, possessions, pensions and other assets.  Following a divorce, getting back in control of handling your finances as soon as possible will assist with the process of moving forward in your life. Whether the relationship breakdown is your choice or not it gives rise to many different emotions; anger, relief, sadness, frustration to name a few. These emotions invariably change as you travel through your journey. That is why it is important to obtain advice from a lawyer who not only understands but will provide honest advice.

To sever all financial ties between yourself and your former spouse you will need to apply to the court for a Financial Order. This will make any financial settlement legally binding. It is important the settlement becomes legally binding to prevent any action being taken in the future. Action can be made by either yourself or your former spouse. Many people assume that if they do not have any assets at the time of the divorce, there is no point in obtaining a Financial Order. It is wrong to assume this, because there is always the possibility that you or your spouse may come into some money in the future. If this is the case, your former spouse is within their legal rights to make a financial claim against you.

There are two ways in which you can obtain a Financial Order; either by agreement or with the assistance of the court.

It is advisable wherever possible to try and reach a resolution without the need for a judge’s intervention. However, if you reach an agreement with your former spouse in relation to the split of all marital assets, the Court will still need to be involved albeit as a paperwork exercise by way of a Consent Order. Once an Order is sealed by the Court, it brings the financial claims to an end. This is far more cost effective and usually faster.

The court process where an agreement cannot be reached is set out in our blog “Finances – The Court Process”

Sarah Watson is a solicitor with over 10 years of experience. She is different to other lawyers, she genuinely cares about the outcome of your case. She will guide you and support you in any way she can.

If you would like assistance in negotiating a financial settlement with your former spouse or require assistance in terminating your former spouse’s rights to make a claim in the future, please contact one of our friendly team at Watson Legal either by calling 01279 466910 to book your free 30 minute consultation with Sarah or email info@watson-legal.com.

No assets in my divorce – no Court Order needed right? Wrong!

Decree Absolute will bring your marriage to a legal end. However, it will not end the financial tie between yourself and your former spouse and potential claim against your assets and income in the future. There are only two ways you can sever the financial tie; by Financial Order by the Court or remarriage.

Even death of your former spouse does not necessarily cut the financial tie. Where you are in the divorce process can also have an impact. If for example the decree nisi has been granted but not the decree absolute, then in the eyes of the law you are still married. So, your husband or wife would still benefit, unless your Will has been changed.

If you are financially dependant on your former spouse at the date of death, you may also be able to make a claim against their estate.

If the Financial Order has been granted, the administrator of your former spouse’s Will should still comply with the Order, save in respect of spousal maintenance as that does usually terminate on death.

Given the complexities of this area we always advise our clients to obtain a Financial Order, even if you have no assets and limited income now. After all, this could change.

A Financial Order can be by way of Consent Order rather than a Judge making a decision regarding your assets. Whether you have no assets, limited assets or have a portfolio of assets the Court must be fully satisfied that you both are aware of each other’s financial position. This means both parties must provide full and frank disclosure of their assets and liabilities, even if it is zero.

You may think there is no value to obtaining an Order now. You may think it is a waste of time, money and stress, but actually it could save you later down the line. In the case of  Wyatt v Vince [2016] EWHC1368 (FAM) Mrs Wyatt sought to make a financial claim 19 years after the divorce. By this time Mr Vince had a £57m fortune. Mrs Wyatt was granted a modest lump sum. This demonstrates that even if you have divorced and reached a ‘informal’ agreement between yourselves if either of your financial positions change many years later a claim can still be made.

Another example is where Nigel Page won £56 million on the EuroMillions Lottery. Mr Page was forced to give his ex-wife £2 million of his windfall, ten years after she left him for another man.

Whether you need a complex Financial Order for a portfolio of assets, a simple Financial Order for limited assets or you have no assets and simply need a Clean Break Order, we will protect your position for the future.

We offer packages for limited or no asset settlements to ensure your legal fees are kept to a minimum.

Sarah Watson is a solicitor with over 10 years of experience. She is different to other lawyers, she genuinely cares about the outcome of your case. She will guide you and support you in any way she can.

If you require assistance in relation negotiating a financial settlement with your former spouse or would like to find out more about our clean break packages, then please contact one of our friendly team at Watson Legal either by calling 01279 466910 to book your free 30-minute consultation with Sarah or email info@watson-legal.com.

Do you know the difference between Freehold and Leasehold? Does it matter?

What is freehold?

If you own the freehold, it means that you own the building and the land it stands on. A freehold estate in land (as opposed to a leasehold) is where the owner of the land has no time limit to his period of ownership. You won’t have to pay annual ground rent.

By owning the freehold of a property, you have the sole responsibility for maintaining the fabric of the building – the roof and the outside walls.

Houses are generally sold as freehold. However, please note flying-freeholds.

Service charges are not generally payable with freehold properties. However, take note that developers are now requiring owners of new build properties to contribute towards the maintenance of shared driveways and communal/estate landscaping. Check before you buy.

Generally, the only ways in which you can lose a freehold property is either by repossession by your lender due to non-payment of your mortgage or compulsory purchase.

 What is leasehold?

Leasehold means that you own a property (usually a flat) for a fixed term but not the land in which it stands on.  There is an agreement between you the Leaseholder and the Freeholder, the party who owns the land in which the entire block is situated. This document is a called the ‘Lease’.

The lease is usually long term, often 99 years, sometimes as high as 999 years. The lease also sets down the legal rights and responsibilities of either side.

Possession of the property will be subject to the payment of an annual ground rent. In addition to ground rent leaseholders will usually also pay service charges and their share of the buildings insurance.

The Freeholder will normally be responsible for maintaining the common parts of the building, such as the entrance hall and staircase, as well as the exterior walls and roof. However, other leaseholders might have claimed their “right to manage”, in which case it is their responsibility.

When the lease expires, ownership of the property reverts back to the freeholder.

A major consideration is, if you as leaseholder do not fulfil the terms of the lease; for example, by not paying the ground rent/service charges or breached a term of the lease then the lease can be forfeited, and you will have to give up possession of your property.

Taking the above into account, Freehold is generally the preferred option.

If you would like further information in respect of the above, please do not hesitate to contact one of our friendly team on 01279 466910 or send us an email to info@watson-legal.com.

Please also check out our website and obtain your FREE no obligation conveyancing quote  https://www.watson-legal.com/residential-conveyancing/

Does how you own a Property with a partner really matter?

The answer is YES!!

In an ideal world, moving house would be simple, fast, and stress-free. Unfortunately, in reality things are different. When you move house it is likely that there are a number of different factors sending your brain on overdrive.

The last thing you are going to be thinking about is: “how am I going to own/hold this property?”

In most circumstances unless your solicitor asks you, you will probably think “What is even meant by owning/holding a property?”

When you purchase a property there are two ways in which you can own the property. You can hold the property as joint tenants, or tenants in common.

Purchasing a property is huge financial step in your life. It is therefore important that you consider how the property is going to be owned.

Owning the property as joint tenants has several benefits. One of the most important benefits is that when one owner passes away, their share of the property is automatically transferred into the remaining owner’s name. However, you will need to notify the Land Registry of the change of circumstances.

When the property is owned as joint tenants you will automatically own the property in equal shares.

In contrast, if you own then property as tenants in common, when one owner passes away, the property does not automatically transfer to the remaining owner. Instead the interest in the property will revert to what is stated in the deceased Will. If a Will is not in place the Intestacy Rules will then apply. If you are an unmarried couple and there has been no provision for transferring the property, for example in a Will, then you may have difficulties remaining in your home. This is a scary thought!

The Intestacy Rules may result in the deceased share of the property being gifted to someone else. The living owner will then own the property jointly with the person whom the interest is gifted to. This can then cause difficulties as the new owner may want to sell the property.

Another important factor to consider when choosing how to hold the property, is whether you stipulate the percentage of interest each owner has in the property. This may be something to consider if one party is contributing all, or a large sum of, the deposit to the property. This can be detailed in a Declaration of Trust which is a legally binding instrument.

With the right preparations, your financial interest can be protected and future disputes are hopefully avoided.

At Watson Legal we pride ourselves in addressing each individual’s circumstances. If you require advice on how you currently own your property or if you are thinking of purchasing a property or simply would like more information, please call 01279 466910 or email info@watson-legal.com.

You can also get a FREE no obligation quote by clicking this link https://www.watson-legal.com/residential-property/

Holla, “We want prenup! We want prenup!”

1) What is it?
A prenuptial agreement AKA a premarital agreement or an antenuptial agreement, can commonly be abbreviated to prenup or prenupt.
It is ultimately a formal, written contract between parties prior to their marriage or civil union.

2) Are they legally binding?
As a result of the UK Supreme Court ruling in Radmacher v. Granatino (2010), prenuptial agreements are now given heavy evidential weight within the UK Family Courts, unless considered to be unfair.
That being said, while British courts recognise these agreements, they also still have the discretion to waive them.
Particularly if deemed to be unfair to any children of the marriage.

3) Why get one?
Tom Cruise and Katie Holmes had one.
So did Brad Pitt and Angelina Jolie.
Kim Kardashian and Kris Humphries did, too.
These three now-divorced couples all had prenups, but they are not just for the wealthy.
A prenup will preserve the expectations of the parties and prevent surprises in divorce proceedings. They assist by providing clarity to parties when an emotive topic such as ‘money’ enters into a relationship, especially when parties have a different attitude towards money.
A prenup can help to provide that peace of mind, particularly, if there are assets and/or property that would be difficult to split equally and if you, and/or your partner, have children from a previous relationship and want to ensure certain assets are preserved for them and protect their inheritance rights. (A Will is also essential in order to preserve and protect in this instance.)
A prenup can also assist where you want to protect inherited money, assets, savings, and future inheritance or retain control of a business or avoid outstanding debt.

4) What should be included?
Every prenup is bespoke to particular circumstances; usually a prenup will include provisions for division of property and spousal support in the event of divorce or breakup of marriage. It can set out the ownership of belongings, for example, money, property and assets. Prenups can contain a vast array of terms and conditions, for instance, terms for forfeiture of assets where a divorce ensues as a result of adultery.
The most basic of prenups lists an inventory of premarital assets that in the event of a divorce will remain the property of their original owner.

5) What happens if I do not have one?
Without a prenup, the starting point for the division of property and assets will generally be equality of assets between both parties.
The Court will look at the role of “economic provider” and “child carer/homemaker” as of equal value to the welfare of the family.
While this is generally the fairest distribution of a couple’s assets, in certain circumstances it can be considered unjust.

  • PRENUP CHECKLIST
    Must be drawn up by a qualified solicitor
    Parties must have independent legal advice to avoid any conflict of interest
    Parties must fully understand and voluntarily agree to it
    Solicitors must confirm it was entered into freely/knowingly
    Signed at least 21 days before marriage
    Assets/property must be fully disclosed

Case Study
Rebecca says that she feels ‘trapped’ in her marriage.
She is not happy anymore, but a few years ago she inherited a substantial sum of money from her grandparents in their Wills.
This is an eventuality that she was not aware of before her marriage, but that most solicitors when drafting prenuptial agreements take into consideration as a possibility.

As Rebecca did not stipulate in any prenuptial agreement what would happen in the event that she did inherit monies, this monies now forms part of the ‘marriage pot’ and will be divvied up between the parties accordingly.
It is one of the reasons that she is determined to keep trying despite her unhappiness.

Unfortunately, this is a scenario that occurs quite frequently and although a prenuptial agreement can sometimes have negative connotations, in this day and age it important to prudent. It does not mean that you love your husband or wife to be any less, it simply means that should the worst happen, both parties have a contingency plan.

If you would like to speak to us about the preparation of a prenup, please call us on 01279 466 910 to book in for your free 20 minute consultation.

Restrictive covenant and an employment contract

shaking hands

Every business has information that it considers both integral and invaluable to its success or perhaps a trade secret. Restricting the use of this information by employees upon the termination of their employment may be vital to the protection of the business or customer contacts. A former employee who has knowledge of technology, strategic information, customers or clients may be an attractive asset to a competitor seeking to encroach upon your market.

A restrictive covenant is a clause in an employment contract which prohibits an employee from competing with his ex-employer for a certain period after the employee has left the business. It can also prevents the ex-employee from soliciting or dealing with customers of the business by using knowledge of those customers gained during his prior employment.

Common types of restrictive covenants;

Non competition: –  This will place a restriction on a former employee working in a similar employment for a competitor. This type of clause will often include a duration and exclusion zone.

Non solicitation: – Will prevent a former employee poaching clients, customers or suppliers of the former employer, or even other employees.

Non dealing: – This will prevent a former employee from dealing with former clients, customers, suppliers. The additional benefit is this will prevent either party from approaching the other.

When a contract is drafted including restrictive covenants the following will need to be considered, as if the contact is drafted too widely it will be difficult to justify the enforceability of any covenant.

  • The breadth of the geographical area.
  • The length of time the post termination restriction is in place.
  • The activities that the employer is trying to restrict.
  • The interest being protected e.g. trade secret.
  • The restrictive covenant must directly relate to the employee’s employment.

Restrictive covenants may also require periodic reviews to maintain their enforceability as the reasonableness of the covenant is judged at the time the contract was entered into. In terms of enforceability, if an employer has reason to believe an employee has breached the post termination restriction, the most common remedy sought is an injunction.

If you require any further information about restrictive covenants or enforcement, please contact the team at Watson Legal either by calling 01279 466910 to book your free 30 minute consultation or email info@watson-legal.com.

NO FAULT Divorce – Does this exist?

Scissors cutting paper family

Divorce is often a time of battle and anguish. It puts families under pressure and there are all sorts of issues to sort out.

  1. Deal with the finances
  2. Limiting the impact on your children

Here at Watson Legal we are empathetic to your situation and aim to make the process as stress-free as possible.

There are a lot couples that have mutually agreed that their marriage is over. Unfortunately, divorce law at present can potentially make things worse for couples, forcing one party to blame the other, unless the couple are willing to wait two years to apply for divorce and they both consent.

The grounds for divorce are as follows:

  1. That your partner has committed adultery and you find it intolerable to live with them;
  1. That your partner’s behaviour is intolerable to live with;
  1. That your partner has deserted you for at least two years;
  1. You have separated for at least two years and your partner consents to the divorce;
  1. You have separated for at least five years.

Therefore the only immediate ground for divorce is either your spouse’s unreasonable behaviour or adultery. This can cause unnecessary distress to the parties involved, making an already difficult process even harder. The only alternative is waiting for two years if both parties consent. For many, waiting two years to sort out finances is not a feasible option.

This seems particularly meaningless and unfair given that the reasons for divorce make no difference to any financial settlement or children arrangement – the reasons are simply to allow the divorce to continue to the next procedural stage.

So in short, does a no fault divorce exist? Well yes! If you are willing and able to wait two years.

Do you think the law should be changed?

There has been a No Fault Divorce Bill, which has been debated in Parliament since 2015 so pending the outcome of deliberations, we may see some reforms in the not so distant future.

There is an argument that a no fault divorce damages the institution of marriage. If parties can divorce easily would this lead to parties not trying to reconcile their differences and working on their marriage? Would divorce no longer be the last resort, but the first option or an easy solution

We are open to your thoughts and suggestions and we would love to hear from you.

If you have any questions about this information or if you would like to book an initial free 30 minute consultation, then please do not hesitate contact us on 01279 466910 or email info@watson-legal.com.

Divorce – What about the children?

When a relationship breaks down the people often who it can affect most is your children. Whilst you may be trying to do everything you can to protect them, they will sense how you are feeling. One of the most important behaviours is, ensuring you talk positively about the other parent in front of them and enable your child to have a relationship with both parents.

Unfortunately, there are times when despite parents trying to reach a resolution, there is no other alternative but to get the help of the court. There are several orders the children can make in relation to children:

  • Child arrangements order
  • Specific issue order
  • Prohibited steps order

What is a child arrangements order?

A child arrangements order (CAO) is an order that regulates arrangements for a child that relate to any of the following; with whom the child is to live, spend time or otherwise have contact and/or when the child is to live, spend time or otherwise have contact with any person

Contact simply means the time that a child spends with an adult. There are several ways that contact may take place:

  • direct contact between the child and the person named in the order
  • overnight staying contact
  • supervised contact, and
  • indirect contact through letters or cards

A CAO may provide for the child to live with one parent only or it may provide for the child to share their time between both parents.

What is a specific issue order?

 A specific issue order determines a particular question in connection with a child. It can be used to resolve issues about a child’s upbringing, such as where the child should go school (e.g. state or private), whether they should receive religious instruction or whether they should have a particular form of medical treatment.

What is a prohibited steps orders?

A prohibited steps order imposes a restriction on a parent or other holder of parental responsibility that prevents them from doing something without consent of the court. They may be used, for example, to prevent a change of a child’s name or to prevent a parent from taking a child abroad.

If you would like to find out more or having difficulties agreeing to specific arrangements for your children, then please do not hesitate to contact us on 01279 466910 or email info@watson-legal.com to book your FREE 30 minute consultation.

Are your Terms and Conditions up to date?

Where you are starting a new business venture or changing your terms and conditions, there is always a never ending list of tasks to complete. Many businesses focus on getting their products / services prepared, finding customers and marketing themselves. For many entrepreneurs addressing Terms and Conditions remains at the bottom of the list but getting them right is crucial to ensure a healthy cashflow.

Neglecting Terms and Conditions for your business, could potentially affect your cashflow and may result in you spending money and wasting time on debt collection (please see our debt recovery blog for further information following the changes brought in on the 1st October 2017) or litigation. In addition, Terms and Conditions are not set in stone. They should be amended regularly to reflect your business if key terms are changed.

Correctly drafted and incorporated Terms and Conditions should act like a manual or recipe book for business and should have absolute clarity on every situation. It is imperative that they are well drafted.

What to Include in Terms and Conditions

  • Parties involved
  • A clear definition of any product or service provided.
  • Price and specification
  • Payment terms including when payment is due and interest payable on unpaid sums.
  • Any guarantee or warranties offered.
  • Delivery process.
  • Identifying the process if either party does not deliver, pay or wants to break the contract.
  • Liability for defective services, goods plus what amounts to breach of contract.
  • Confidentiality clauses
  • Notice Periods
  • Jurisdiction and governing Law.

Remember Terms and Conditions are specific to your business and ‘one size doesn’t fit all’. Having the correct Terms and Conditions will save businesses considerable expense in the long run, as it is more expensive and time consuming to take legal action against customers who do not pay or fund expensive litigation than it is to have the correct Terms and Conditions prepared at the outset of your business.

If you require any further information about Terms and Conditions, please contact the team at Watson Legal either by calling 01279 466910 to book your free 30 minute consultation or email info@watson-legal.com.