Change in US Tax Rules for Alimony


Change in US Tax Rules for AlimonyA big change in US tax rules for alimony is coming up in December 2018.

Do you live in the UK and your ex in the US? Or do you live in the US and your ex in the UK?

This change might apply to you and you may need to take urgent action.

The Tax Cuts and Jobs Act 2017 applies after 31 December 2018. Currently, payment of alimony (as maintenance is known in the US) is tax deductible. And those who receive alimony (the lower earner, so generally the wife) pay tax on it.

The change will mean husbands (generally the higher earner) will get no tax advantage and wives will no longer pay tax.

Two Ways of Looking at Change in US Tax Rules for Alimony

International families are rushing to finalise their financial arrangements to preserve the tax position. But there are two ways of looking at it.

Some say it’s a bad thing. Husbands will lose the tax advantage and may want to pay less alimony. And as wives won’t have to pay tax why should husbands pay them so much anyway? If you look at it this way you can understand why some international couples are panicking.

The UK went through similar tax changes in 1989. Lawyers were initially nervous. Would husbands be less willing to pay? Would wives miss out?

But in the long run the change in UK tax law didn’t make too much difference. Maintenance is calculated in the UK on the basis of need. How much does the wife require to support herself and the children? And what is the shortfall between her requirement and her income? This figure generally indicates the sort of maintenance that is required. See my recent blog Maintenance and Clean Break on Divorce.

Since 1989 there hasn’t been the head scratching and the complicated calculations – if he pays this much, how much tax relief will he get? So shouldn’t he pay more and pass over some of the benefit? And what about the wife, will it push her into a tax paying bracket? How much tax exactly will she have to pay? None of this applies anymore. In the UK it’s now a simple case of “What You See Is What You Get“.

Change in US Tax Rules for Alimony – Long Term & Short Term

Short term, couples will want to take advantage of the existing tax system. But hopefully the impending change won’t tip wavering couples into divorce.

Long term, it’s possible the change won’t make a fundamental difference. And it might save on professional fees as it will be simpler to work out what is actually paid and received – because they will be one and the same.

Change in US Tax Rules for Alimony and International Tax Rules

If one of you is US or UK based, and the other in a country where tax remains relevant, such as Belgium, Ireland, Italy, Netherlands or Portugal, make sure you take advice from an expert international family lawyer.

Prenuptial Agreements

If you are in an international family and you have an existing prenuptial agreement you should seek advice on the impact of the change in US tax rules for alimony.

Don’t Delay!

Anyone wanting to take advantage of the existing system should make sure they take advice now. There may still be time to secure a maintenance or alimony order – whether by consent or in Court – prior to 31 December 2018. And please note that the detail of the changes coming up in the US tax rules are complex and far reaching, and go well beyond the scope of this article. So please don’t delay taking expert advice.

Contact  Joanne Houston on 01962 217640 for free advice on the forthcoming change in US tax rules for alimony. In this 20 minute session we will review your situation and how you can achieve your objectives.

JUST FAMILY LAW are specialist divorce and family law solicitors offering personalised legal solutions. We offer collaborative law which is especially relevant in providing solutions tailored to your family’s needs. This includes same sex couples and their families. Visit our website just-family-law.com The topics covered in this blog post are complex and are provided for general guidance only. Therefore if any of the circumstances mentioned in this blog have application to you, seek expert legal advice.

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My Husband Has Left Me What Are My Rights?

My Husband Has Left Me What Are My Rights?My husband walked out on me, what are my rights?” This is a question I am asked only too often. Because in the immediate aftermath of a break up in a marriage, there’s a lot to worry about. And it’s not just the emotional fall out – which is bad enough – but the finances too. And particularly if you are the prime carer of the children, and don’t have immediate access to income to keep the family and the home afloat. It can all seem a bit of a nightmare.

Let Me Give You An Example Of The Issues

Judy comes to see me. Her husband, Richard, has discovered she’s having an affair with her Pilates instructor. Richard has left her and says she won’t get a penny of his money. He’s a high earner, and she’s at home looking after their two small children. Richard has his yacht and Ferrari up for sale and has threatened to move all his money abroad. He owns the family home in his sole name and has sent round an estate agent who says it’s going on the market.

Can Judy Stop Richard Selling The Family Home?

Yes. Judy can protect her right to occupy the family home.

She or her solicitor can send an application to the Land Registry for registration of a Notice of Home Rights. Indeed anyone who is not a joint owner should register their home rights as quickly as possible if their marriage has broken down.

Can Judy Stop Richard Selling His Yacht And His Ferrari And Moving All His Money Abroad?

Yes, Judy or her solicitor can make an urgent application to the Court to freeze Richard’s assets.

Can Judy Get Maintenance From Richard On An Emergency Basis?

Yes, Judy or her solicitor can make an application to the Court for maintenance pending suit (sometimes called interim maintenance).

Can Judy Get Maintenance From Richard To Enable The Family To Remain In The Family Home?

Judy will need to use the Child Maintenance Service to get payments for the children. As for ongoing maintenance for herself, that depends on both her and Richard’s financial situation.

Can Court be Avoided?

If Richard calms down and agrees to negotiate, or to mediate, or to use collaborative law, there’s no reason why this has to go to Court.

Although as mentioned above, registering a Notice of Home Rights is always advisable where the family home is not in joint names.

I’m Married, My Husband Has Left Me What Are My Rights?

Contact  Joanne Houston on 01962 217640 for free advice on your rights. In this 20 minute session we will review your situation and how you can achieve your objectives.


JUST FAMILY LAW are specialist divorce and family law solicitors offering personalised legal solutions. We offer collaborative law which is especially relevant in providing solutions tailored to your family’s needs. This includes same sex couples and their families. Visit our website just-family-law.com The topics covered in this blog post are complex and are provided for general guidance only. Therefore if any of the circumstances mentioned in this blog have application to you, seek expert legal advice.

 

image Munaza in a thoughtful look and mood by Rangbaz on Wikimedia Commons

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Financial Settlement On Divorce, How To Get The Best One For You – 5 FAQs

Financial Settlement On Divorce

  1. What’s The Best Way To Tackle Your Financial Settlement On Divorce?

By all means come to an agreement about the matrimonial finances between yourselves. But make sure you obtain advice from an expert family solicitor to ensure it’s a fair deal. This could save you money in the long term because the wrong financial settlement can affect the rest of your life.

Your solicitor should advise you of your options such as negotiation, mediation or collaborative law. But if these don’t work, Court proceedings might be the answer. Your solicitor will tell you how much these options are likely to cost.

  1. What Happens First?

All the matrimonial assets are utilised to provide a fair settlement for both of you. So you both need to provide information about every single one, whether owned in your joint names, or in your sole names:

  • The value of the family home (and any other property) and the size of the mortgage
  • Bank and building society accounts
  • Shares
  • Pensions
  • Any other investments
  • Debts

And you will both need to provide details of your income and outgoings, too.

  1. Which Assets Are Non Matrimonial? 

Can you protect your inheritance on divorce? How can you ring fence your business? How about property owned pre-marriage? You will need expert legal advice to answer these questions. But you must, first of all, disclose the existence of these assets, and their value.

  1. How Are Assets Divided For Your Financial Settlement On Divorce?

The starting point is equal division. But the Matrimonial Causes Act tells us we must also consider various factors, and any one of these could mean an adjustment to income or capital. The list of factors includes:

The Welfare Of Any Children
Income and Earning Capacity

The approach is to achieve a “clean break” between couples by capital adjustment rather than ongoing maintenance.

Financial Needs

If there are children, the parent with whom they live is likely to have a greater need for capital.

Standard Of Living During The Marriage

In rare cases where there is an excess of capital and income, this is an argument for a greater share.

Your Ages, And The Length Of The Marriage

There are different considerations depending on the ages of the couple, and whether it’s a short marriage or a long marriage.

Any Physical Or Mental Disabilities

This could be a case for ongoing maintenance, or extra capital.

Contributions To The Marriage

High achievers can attempt to ring fence their “stellar contribution

5.         Is A Court Order Required?

A Court order means if one of you changes your mind, or if one of you comes into money, there’s no going back for a second bite of the cherry. And it’s a relatively simple matter for a solicitor to draw up an order and to send it to Court. Ask for a fixed fee quote.

Contact Joanne Houston on 01962 217640 for free advice on your financial settlement on divorce. In this 20 minute session we will:

  • Review your matrimonial financial situation and how you can achieve your objectives
  • Give you an overview of how a suitable financial settlement may be achieved by either negotiation, collaborative law, mediation, or Court procedure

JUST FAMILY LAW are specialist divorce and family law solicitors offering personalised legal solutions. We offer collaborative law which is especially relevant in providing solutions tailored to your family’s needs. This includes same sex couples and their families.

Visit our website just-family-law.com

The topics covered in this blog post are complex and are provided for general guidance only. Therefore if any of the circumstances mentioned in this blog have application to you, seek expert legal advice.

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Collaborative Family Law Protects Divorce Finances And Property

How Can Collaborative Family Law Help You?

Collaborative Family Law protects divorce finances and property. Could this apply to you and your family?

Divorce is the final straw for many. Hence numerous unhappy couples stick together for fear of the emotional and financial fall out. Because splitting up will just make everything even more difficult – won’t it? And in addition, seeing a lawyer – how can anyone afford that?

The solution to protecting your finances and your children on Divorce may be to instruct a Collaborative Family Lawyer.

Collaborative Family Law Prioritises The Family’s Interests

Everyone involved focusses on ensuring your relationship remains amicable and respectful.

And the process is much quicker and cheaper than Court. Also much less rigid because you can come to an agreement individually tailored to your family’s needs.

Some find Collaborative Family Law even better than mediation. This is because you have your own Collaborative Family Lawyer at your side at every four way meeting.

What Makes The Collaborative Family Law Process So Successful?

An expert always by your side …

Your Collaborative Family Lawyer will advise you at every four way meeting. Most importantly, she will speak for you if you so wish.

You and your partner agree to be open, and not to blame …

Both of you, and your lawyers, start off with a Participation Agreement. You will agree upon:

  • Openness
  • Full Disclosure
  • Constructive Discussion
  • An Absence Of Blame

You commit yourselves to avoiding court…

That’s both you and your partner, and both of your Collaborative Family Lawyers. In fact if the process doesn’t work, you will both have to find new solicitors. This is because they can’t act for you in a Court process as well. So that’s a tremendous incentive to make it work.

You and your partner will not be dwelling on the past …

Your Anchor Statements set out the issues you want to address, and your aspirations for the future. Both of you will look forward rather than dwell on the past.

Collaborative Family Law Protects Divorce Finances And Property

Legal costs are limited …

Detailed agendas control each four way meeting. Legal work in between meetings is limited. Costs are under control.

You won’t have to go to Court …

You won’t have to face the lottery of going to Court. Most importantly, a Court Order won’t be imposed on you.

Phone Joanne Houston on 01962 217640 for a free 20 minute consultation on how Collaborative Family Law protects divorce finances and property.

JUST FAMILY LAW are specialist divorce and family law solicitors offering personalised legal solutions.

We offer collaborative law which is especially relevant in providing solutions tailored to your family’s needs. This includes same sex couples and their families.

Visit our website just-family-law.com

The topics covered in this blog post are complex and are provided for general guidance only. Therefore if any of the circumstances mentioned in this blog have application to you, seek expert legal advice.

image credit: Meeting by martinc (filter etc applied) on Flickr

 

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How To Protect Inheritance On Divorce: is a Prenuptial or Postnuptial Agreement the answer?

Protect Inheritance On DivorceSophie has contacted me for urgent advice. She wants to know how to protect inheritance on divorce. Her partner, Bob, has whisked her away to Rome for the weekend, gone down on one knee, and proposed. But she’s having cold feet because what happens if it doesn’t work out? She doesn’t want Bob to get his hands on the fortune she’s inherited from her family.

On marriage breakdown every asset is up for grabs. 
But it has to be a "matrimonial asset" unless there is a strong case based on need.
It is sometimes possible to protect inheritance on divorce.

Is An Inheritance A Matrimonial Asset?

It depends.

Often an inheritance is regarded as non matrimonial and so not up for grabs, particularly if it’s a short marriage. And timing is important. Was the inheritance received before or during the marriage, or as the couple separated? Even though Sophie inherited before getting married it could be bad news if she and Bob split up after a long marriage. It depends on what happens to the inheritance in the meantime. Will the couple mix it with their matrimonial assets? Will they keep it separate?

The more separate it’s kept the better, but still that’s no guarantee.

What About “Needs” When Assets Are Divided On Divorce?

The starting point for division of matrimonial assets is an equal split but certain circumstances are taken into consideration including:

  • The Children’s Welfare
  • Income and Earning Capacity
  • Financial Needs
  • Standard Of Living
  • Your Ages, And Length Of The Marriage
  • Physical Or Mental Disabilities
  • Contributions To The Marriage

What if an equal division doesn’t provide enough for a suitable home for one of the couple? They are likely to get a larger share of the assets. And if there aren’t enough matrimonial assets? Non matrimonial assets can be thrown into the melting pot to meet needs. This includes an inheritance.

The Millionaire Who Lived In A Three Bed Semi

A Court case in 2011 throws some light on how to protect your inheritance on divorce. It’s called K v L. We don’t know the couple’s names or where they lived as the Court agreed to protect their anonymity for the simple reason that they wanted their three children to lead normal lives.

This is the story of an extremely wealthy wife. 
Neither of the couple ever needed to work but despite the wife’s millions 
they lived modestly in a three bed semi worth £225,000. 
They ran an inexpensive car and no single item in their home was worth more than £500.

The wife had inherited shares in an Israeli company when she was fifteen. When the couple first cohabited in 1986 the shares were worth £300,000. When they married in 1991, £700,000. When they separated in 2007, £28m. By the time of the court hearing in 2011, £57m.

After twenty one years of marriage the wife left the husband in 2007 taking the children with her. She bought another modest property in the same London suburb, close to the husband who remained in the family home.

The husband told the court he wanted £2m to buy a house in central London, and £450k to buy a house in Israel. Also £60k to buy a new car. And maintenance. All in all he claimed £18m. But the court said the wife’s inheritance was a “non matrimonial asset” and on a generous assessment of his needs he would only get £5m. He was not otherwise entitled to share in her inheritance.

Will A Prenuptial Agreement Protect Inheritance on Divorce?

K v L was an unusual case and relied heavily on the modest lifestyle of the couple. I told Sophie not to worry. She could take steps to protect her inheritance on divorce with a prenuptial or post nuptial agreement. She liked the idea and said she would talk it over with Bob. I have written an earlier blog on the topic of agreements.

How To Protect Inheritance On Divorce

Contact  Joanne Houston on 01962 217640 for free advice about how to protect your inheritance on divorce. In this 20 minute session we will review your situation and how you can achieve your objectives.


JUST FAMILY LAW are specialist divorce and family law solicitors offering personalised legal solutions. We offer collaborative law which is especially relevant in providing solutions tailored to your family’s needs. This includes same sex couples and their families. Visit our website just-family-law.com The topics covered in this blog post are complex and are provided for general guidance only. Therefore if any of the circumstances mentioned in this blog have application to you, seek expert legal advice.

Image  A Baby Wild Boar by Sander van der Wel on Wikimedia Commons

 

 

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Collaborative Law – How Can It Help With Family Breakdown?

collaborative law family breakdownHow can couples move on from relationship breakdown with positive feelings? How can conflict – about money, about children – be minimised?

If I could say one thing, and one thing only, to help people mend the pain of relationship breakdown, and to translate the inevitable hurt feelings into something a lot more positive, I would say “try collaborative law“.

Did you know that collaborative law involves you and your ex, and both of your solicitors, signing an agreement that no one will issue court proceedings? This means that all of you, solicitors included, are totally committed to finding a solution. Any approach which avoids going to court has got to be good.

So how does collaborative law work? The principle is that the four of you, that’s you, your ex, and both of your solicitors, will have a series of meetings, usually three or four, and these will be organised and will proceed at a pace which is right for you. Your solicitor will be there to advise you and will communicate on your behalf with your ex and their solicitor if you don’t feel up to engaging directly yourself.

The first point to make is of course that if you can reach a final agreement over a series of three or four meetings over a period of months (but sometimes even just a few weeks), you will have saved yourself a great deal of time. Court proceedings can take much longer, a year or more sometimes.

At the first meeting you will all sign the collaborative law participation agreement. No one is going to issue court proceedings, and if they do, both of you will have to find new solicitors as the solicitors appointed to act in the collaborative process can’t continue. You also agree to be respectful to each other and to give “financial disclosure”, which means you will both have to provide details and documents proving all your income and assets. This disclosure is required whenever matrimonial finances are addressed – whether this be in negotiation, mediation, collaborative law, or court.

You agree the agenda for the second meeting. This will be the issues that are important to each of you. Every family is different and this is your opportunity to say what you want to achieve. Typically the agenda will include how the family home will be dealt with. If there are children it might be that they’re finding it difficult to adjust to the breakdown of their parents’ relationship. A priority can be exploring how to ease the transition for them.

It’s possible to involve other experts, such as counsellors to help you cope with the breakdown, or to assist the children in the transition, and financial experts who can advise on the valuation of your assets.

There’s an orderly and honest exchange of financial information at the second meeting, the focus still on what the couple want to achieve.

At the third meeting typically all the cards are put on the table. Individual priorities are known; the facts and figures are at your finger tips; you both have your solicitors there to advise and support you. There’s hard talking and inevitably compromise on both sides.

If not at the third meeting, then typically at the fourth meeting a final solution is agreed. There’s been compromise on both sides, possibly even a few tears, but you’ve achieved what seemed like the impossible by communicating and ultimately agreeing with your ex. You’ve laid the foundation for moving on with your life and putting all the heartbreak behind you. Who knows, you might even be able to be friends. You will certainly be in a stronger position to co-parent successfully, which as I have mentioned in an earlier post requires careful navigation.

You have been an active participant in the decision making process – far more empowering and healing than leaving it to a Judge to decide. And unlike mediation you (and your ex) have received advice throughout the process, and your solicitor has been with you to communicate on your behalf if you haven’t felt you wanted to engage directly with your ex.

In the court process there’s only a limited selection of orders that can be made. But in collaborative law, personal tailoring is possible, unique agreements can be reached. When you and your ex decide what’s best for your particular family, you can make agreements not generally available in court proceedings. You can agree the nuts and bolts of how you’re going to co-parent your children, where they’re going to live on a day to day basis, how you’re going to coordinate your care of them, how their individual needs can be met.

If you’re able to talk all this through – the property, the money, the children, the routine of co-parenting – then it makes it more likely that you will be able to continue being a family, a different family of course, but a family none the less, with two parents who work together in the interests of their children.

As you will have made the transition with little acrimony and are moving on with your lives separately but positively, there will be no need for your extended families and friends to take sides. You won’t dread your child’s wedding day, wondering how you and your ex will be able to sit at the top table together, let alone in the same room. You will still be a functioning family.

Collaborative law is the way to move forward positively from the breakdown of your relationship.

Wouldn’t you agree that any approach which avoids going to court has got to be good? If you have an opinion about collaborative law, please do share your comment with us, we would like to hear from you.

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JUST FAMILY LAW are specialist divorce and family law solicitors offering personalised legal solutions.

Visit our website just-family-law.com

The topics covered in this blog post are complex and are provided for general guidance only. If any of the circumstances mentioned in this blog might have application to you, you should seek expert legal advice.

image by Harland Quarrington on wikimedia

 

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10 Pitfalls of DIY Divorce

 

DIY Divorce1.   Family law is complicated and always changing and you’re likely to find yourself out of your depth. You may regret your DIY financial agreement for the rest of your life.

2.   You may be denied a fair share of the business as your ex has undervalued it.

3.   You might be left with your ex’s debts.

4.   When you’re older you may realise you focused on the value of the family home and not enough on a fair share of the pension. Or you might discover your share of the pension pot (even though it seemed fair at the time) doesn’t provide you with a fair share of the pension income.

5.   Your DIY financial agreement may not include all the assets or liabilities, or may not deal with them fairly, or it may be impossible to put into effect, and you may end up involved in expensive and time consuming court proceedings as a result.

6.   Your ex may not keep to the DIY agreement or may come back for more in the future as you haven’t finalised it as a court order.

7.   You might find yourself accused of child abduction (an imprisonable offence) if you’re an international family and not in agreement about where the children should live.

8.   You may find it impossible to keep things amicable which is damaging for the children.

9.   You’ll miss out on the opportunity of reaching an amicable agreement with the assistance of mediation or collaborative law.

10. You’ll miss out on the expertise and experience of a family solicitor.

Phone me on 01962 217640 for a free 20 minute consultation on these important issues.

JUST FAMILY LAW are specialist divorce and family law solicitors offering personalised legal solutions.

Visit our website just-family-law.com

The topics covered in this blog post are complex and are provided for general guidance only. If any of the circumstances mentioned in this blog might have application to you, you should seek expert legal advice.

photo Just Divorced? by F Tronchin on Flickr

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Need To See A Solicitor? What Can You Expect?

first meeting with solicitorThe time has come to see a solicitor. You’ve arranged a first meeting. What can you expect?

You can expect expert legal advice targeted to your particular circumstances. You can expect your questions to be answered (if you can, try and narrow down exactly what you want to find out by making a few notes beforehand).

Your solicitor will understand that difficult things may be happening in your life, and that making an appointment to see a solicitor is a big step. Your solicitor is there with all their years of experience to help you, and you are guaranteed a sympathetic and caring listener.

Choose The Right Solicitor …

One meeting with an expert family law solicitor may be all you need for now, or it might be the first step on a long journey. Whichever it is, make sure you chose the right solicitor, a member of Resolution. Check on the Resolution website.

Resolution’s 6,500 members follow a code of practice that promotes a non-confrontational approach to family problems. They encourage solutions that consider the needs of the whole family – and in particular the best interests of children.

When Making The Appointment

Make sure to say if it’s an emergency because your solicitor will try to slot you in for an early appointment. For example does it involve:

·     child abduction

·     domestic abuse

·     the risk of your partner disposing of assets to stop you making a claim against them?

Make sure you know exactly what the meeting is going to cost you – whether this is nothing in the case of a free discussion, or a fixed fee as agreed in advance.

Just Family Law offers a free 20 minutes telephone conversation. You’d be surprised the amount of ground that can be covered.

Alternatively there are fixed price meetings for half an hour or an hour. It’s up to you.

Remember your meeting with your solicitor is completely confidential. No one need ever know you’ve sought legal advice. Although you are of course welcome to bring a friend or family member with you as support.

How A Family Solicitor Can Help You …

·     Maybe you’ve decided your relationship is at an end

·     Maybe you need advice about the children, or the finances

·     Maybe you’re an older couple and worried about the affect of marriage breakdown on your pension

·     Maybe one or both of you were born abroad, settled in this country and now hope to return home. What does this mean for the children?

But it’s not all just about relationship breakdown. In the early stages of a relationship you might want a cohabitation agreement or a prenuptial agreement, as I mentioned in an earlier post.

Or perhaps your relationship broke down years ago and a query has now come up about the children. Maybe you or your partner want to take the children and relocate within the country, or abroad.

How Can I Help You? …

The guiding light of your first meeting with your solicitor is what you want to achieve from it – the advice, information and support you need. This is what your solicitor will focus on.

It could be that you’ve spent a great deal of time searching on the internet and you’re up to speed with the sorts of issues involved and you just need some fine tuning.

On the other hand you could be reeling from the breakdown of your relationship, unsure of what to do next, uncertain about what the future holds. You could have a particular and urgent concern. For example, the children. How can you tell them what’s happened? How will they cope? Where will they live? I have discussed in an earlier post how separating parents can help their children.

Or you might suspect that your partner is planning to sell or hide valuable assets so you can’t claim against them.

Or it could be that your partner is abusive and you are frightened.

So the first thing you need to do is communicate to your solicitor exactly what it is you want to achieve from this first meeting.

But before you come to the meeting please do provide any information that has been requested. Proof of identity is something that all solicitors have to ask for, just like banks and building societies. And if you’re asked to provide information about your family, or about the family finances in preparation for the meeting, or to fill in a questionnaire, this is to provide your solicitor with some background information so that the advice given you can be tailored to your needs. And remember, this is all totally in confidence.

Another way of looking at is that you’re in a maelstrom of events and you’re reaching out for help. Your solicitor will be able to give you the help you need, and it’s important that both you and your solicitor focus on what it is you need to talk about, here and now. But in the background it’s important that your solicitor has a broader view, even if at the moment it’s not possible or necessary to go into tremendous detail – that can follow.

You arrive at your solicitor’s office. A much anticipated first meeting. All your focus is on the here and now, what can your solicitor do to help you at this difficult and painful stage?

Will It Be A Load Of Confusing Legal Jargon? …

Definitely not.

If you’re feeling distressed and confused the last thing you need is great chunks of advice about issues that aren’t at the top of your list of priorities. Your solicitor will address your specific questions and answer them, and in a digestible way, and will of course understand that it’s a lot for you to take on board.

I like to make a plan at the end of a first meeting. It may be that you need to take action, gather information or documents, or talk to someone else before we meet again. If necessary these actions can be broken down into steps so that they’re easy to follow.

At the end of the meeting when all your concerns have been discussed, expect to be handed informative leaflets or fact sheets, or to be referred to helpful websites to assist you to come to terms with what is happening and what to do next.

Specialist family law firms offer solutions to assist you reach agreement with your partner without recourse to the courts such as collaborative law and mediation. They can also refer you to required and complementary services such as counselling, coaching, financial, pension advice to help with relationships and their breakdown.

Food For Thought …

Your discussions and the advice you’ve been given can be confirmed in writing – a good idea if you have decisions to make and you want to mull the whole situation over.

You may fear that your partner or family members will notice an email or a letter from a solicitor. In which case you can suggest to your solicitor another more secure postal or email address. Or alternatively you can collect the letter.

The Cost …

The all important question of the expense of any action required on your behalf will be addressed. Solicitors are bound by professional rules to tell you their hourly rate and to give you an estimate of how much the work will cost.

Often there are various options for dealing with your situation. You will be informed of all the choices open to you and how much they’re likely to cost because it’s important for you to make an informed decision before moving to the next stage.

Sometimes it’s possible to agree a fixed fee for the work required.

So that’s what you can expect from a first meeting with a solicitor

·     expert legal advice targeted to your particular circumstances

·     your questions to be answered. If you can, try and narrow down exactly what you want to find out by making a few notes beforehand

·     make sure you choose the right solicitor, a member of Resolution. Check on the Resolution website.

·     when you make the appointment make sure to say if it’s an emergency because your solicitor will try to slot you in for an early appointment.

·     your meeting with your solicitor is completely confidential. No one need ever know you’ve sought legal advice.

What do you look for when you are consulting a solicitor? We would love to hear your thoughts on this question – please do leave us a comment.

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JUST FAMILY LAW are specialist divorce and family law solicitors offering personalised legal solutions.

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The topics covered in this blog post are complex and are provided for general guidance only. If any of the circumstances mentioned in this blog might have application to you, you should seek expert legal advice.

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A Guide to “Needs” on Divorce – Christina Estrada’s Extraordinary Essentials

christina estrada

photo by Taber Andrew Bain

Christina Estrada’s case against her ex husband Walid Juffali was reported with astonishment in the national media. Her yearly “needs” totalled £6.5m and included:

  • October half term in the Presidential Suite of The Ritz, Paris, for just under £250,000
  • £58,000 for two luxury handbags, £23,000 for six casual handbags, and £35,000 on ten clutch handbags
  • fifteen new cocktail dresses at a mere £83,000

She sought a lump sum of £127m to cover her income needs for the foreseeable future, and £62.8m to buy a suitable house in London.

Her husband’s legal team described her claim as being in “gasp” territory. I think we can all agree on that.

But how can such a claim be justified? I will try and answer that question in this post. I will also be taking a quick look at recently published Guidance for Judges on the subject of “needs”.

Christina Estrada has certainly led an extraordinary life. Born in Santa Monica, California in 1962, she moved to Paris when she was 19 where she rose to international fame as a supermodel. In 1988 she arrived in the UK where her dazzling career continued. But in 2001 she gave it all up to marry Mr Juffali (born in 1955), an extremely successful and wealthy businessman whose family riches stem from the supply of electricity and telecommunications throughout Saudi Arabia.

Adapting Mrs Merton, one might ask, What first attracted Ms Estrada to billionaire Walid Juffali? But it seems they had a genuinely happy marriage. They had a daughter upon whom they both doted. They lived in a Berkshire mansion and assorted second homes – a Venetian palace, a substantial “iceberg” chalet in Gstaad – which they filled with art treasures and antiques they scoured the world to find. He demonstrated his love for her with sensational gifts, on one occasion a large blue diamond thought to be worth £10m.

But in 2014 he divorced her without her knowledge (having married a second wife during 2012).

The case was heard in the Family Division of the High Court in London at the end of June 2016 (sadly in the absence of Mr Juffali who is seriously ill). Mrs Justice Roberts stated in her Judgment that she wouldn’t disagree with the description of the couple’s standard of living as “stratospheric” and “unimaginably high”.

You are probably thinking, Diamonds? The Ritz? A Venetian palace? In what universe does this apply to me or to anyone I know? But pause for a moment and think about it. Ms Estrada gave up her career for her husband, they had a child together, the family enjoyed a certain lifestyle. Doesn’t that apply to a lot of ex wives?

But why was her claim based on “needs” and why were her “needs” so astronomically high?

The answer is in Section 25 of the Matrimonial Causes Act which sets down the matters to which the court is to have regard and these include the financial resources of the couple, their financial needs, and the standard of living they enjoyed during their marriage.

We have also to consider case law in particular the landmark case of White v White.

This considered Mrs White’s entitlement beyond her immediate needs in the context of assets, in particular two farms, worth in excess of £4m. What is striking about this case is despite Mr White’s claim that he created much of the family’s wealth, the court said the starting point for division was equality.

White v White is probably one of the reasons wives prefer their cases to be heard in this country, and in particular in London, and has no doubt contributed to London gaining the reputation as the “Divorce Capital of the World”.

But there are of course circumstances in which “needs” override equal division. The first is where there isn’t enough to go round, for example where equal division wouldn’t provide enough to house the children.

The second is the extremely unusual circumstance where it would be unjust for the immense fortune amassed by one spouse to be shared with the other. It looks like this was the advice Ms Estrada received from her legal team because of course by the time she married Mr Juffali he was already super rich.

So Ms Estrada based her case on her “needs”, and these “needs” were considered in the context of the “standard of living” she enjoyed in her marriage.

But what does “needs” mean? Does the recently published Guidance for Judges help us to understand the concept?

The Law Commission recommended that this Guidance be published to promote consistency between the Judges in London and their colleagues elsewhere. Apparently the problem is a different approach to maintenance orders, in other words orders about the payment of income from one spouse to another.

There are a number of ways the court can deal with maintenance. One way is to order that it be paid for a fixed period of time to allow the receiving spouse to adjust to their changed financial circumstances. Another is to make an order without an end date, in other words an open ended order. Apparently it is more likely that a Judge in London will make an open ended order. This is probably another reason why London is viewed as the Divorce Capital of the World.

I have read the Guidance for Judges. There are helpful subheadings, and statute and case law are quoted at length. This surprises me. It’s one thing to promote consideration of the different ways in which judicial discretion may be exercised, and quite another to provide materials which surely the Judges should already have under their belts.

I wonder to what degree this Guidance will be cited by lawyers in court? Is there a risk it will hamper judicial discretion rather than inform it?

I would recommend the Guidance to anyone involved in family law – law students, solicitors and barristers in particular – because it’s pretty much divorce finances in a nutshell. And I imagine it will be essential bedtime reading for Judges.

But what does the Guidance say about “needs”? The introduction makes the point that if the public had a clearer understanding of “needs” this would be of great benefit as couples might be more ready to agree and to move on with their lives. The Guidance says the term includes income and capital, present and future; the provision of a home and provision for old age. And in high value cases it may be defined as “needs (generously interpreted)”.

It continues, “…in cases involving more financial resources and higher marital standards of living, ‘needs’ can be met at a higher level than would otherwise be possible”.

In other words if there’s a lot of money around while you’re married, there’s likely to be a lot of money around when you divorce.

Will this Guidance for Judges achieve greater consistency between London and the rest of the country? Who knows, we’ll have to wait and see. But it’s worth bearing in mind there are in fact few maintenance orders, and most are not lifelong but designed to support the spouse towards independence. There are always going to be exceptions, of course, for example to compensate for future economic disparity. Such an order can be open ended, or can be a lump sum, which returns us to the case of Christina Estrada.

So what did Ms Estrada get?

The court held that she should receive maintenance to cover her “needs” initially at the rate of £2.5m per annum reducing over a period of about twenty years to £1.2m per annum when she turns seventy five. This maintenance is “capitalised” in other words she gets a lump sum upfront instead of regular payments. She was also awarded a fund of £18m to buy a house in London.

She claimed a total of £196,500,000 and was awarded £62,300,000, and despite the media’s incredulity, it’s probably a fair enough result in terms of the Guidance for Judges. It certainly ranks as the largest ever “needs” award made by an English court.

In summary

  • Parliament has set down in Section 25 of the Matrimonial Causes Act the matters to which the court must give consideration. These include:
    • the resources of the couple
    • their needs
    • their standard of living during the marriage
    • their ages
    • duration of the marriage
    • any disabilities
    • their respective contributions to the family
    • conduct that would be inequitable to disregard. NB “conduct” is rarely relevant. I’ll be looking at this question in a future blog
  • Case law suggests that the starting point is equal division
  • Division can be unequal where needs cannot be met, or in high value divorces where there has been a “stellar” contribution by one party
  • “Needs” on divorce include for income and capital, present and future; the provision of a home, the provision for old age
  • “Needs” in a high value divorce can be defined as “needs (generously interpreted)”
  • Read Christina Estrada’s fascinating and ground breaking case Juffali v Juffali
  • Need guidance?

Do you think that financial “needs” should be considered on divorce? Or do you think there should be an “equation” for dividing the finances? We would love to hear from you with your opinion so please leave us a comment.

If you have found this post interesting please sign up below for new posts by email.

JUST FAMILY LAW are specialist divorce and family law solicitors offering personalised legal solutions.

Visit our website just-family-law.com

The topics covered in this blog post are complex and are provided for general guidance only. If any of the circumstances mentioned in this blog might have application to you, you should seek expert legal advice.

 

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