Nowadays whenever I see an article in the Times about parliament and divorce I automatically assume it is about Brexit and the ‘’divorce bill’’. Yesterday that assumption didn’t seem unreasonable as all the media were reporting that the Brexit divorce costs might rise from 20 to 40 billion.
On closer reading the Times article was about a subject of keen interest to me, divorce reform and the status of prenup and post marriage agreements in subsequent divorce proceedings. I have a particular interest in family finance law reform as for many years I have specialised in the preparation of prenup and post marriage agreements and in helping couples resolve the division of their property and assets on divorce. As a member of the International Academy of Family Lawyers I regularly advise on multi jurisdiction complex prenup agreements and also help decide on how assets are divided where there is potentially more than one country in which the divorce proceedings could be started. When acting for the economically weaker spouse there is often a rush to start divorce proceedings in England rather than in foreign climes as English Courts have a reputation for being generous on awards and in awarding ‘’maintenance for life’’.
The private members bill, sponsored by Baroness Deech, is called the ‘’Divorce (Financial Provision) Bill 2016-17 .Its intention is to amend existing divorce legislation primarily to limit judicial Court discretion and therefore to reduce the uncertainty of what financial award will be made by a judge in divorce Court proceedings. Under current family law judges have a very wide discretion over what financial orders to make. That flexibility, designed to meet individual family needs, can make it difficult even for specialist family lawyers to precisely predict what a Court will order at a final hearing of a financial dispute. That very uncertainty over outcome can encourage ongoing Court litigation as, in some divorce situations, there is such a wide potential range of financial orders it can be hard to second guess what a judge may ultimately decide. Thankfully, in other family situations it is possible for a specialist family solicitor to be able to give clear guidance on the likely financial outcome of Court proceedings and thus manage expectations and reach an early financial settlement.
If the Bill becomes law then pre and postnuptial agreements will be binding on the family Court provided that legal advice was taken before the agreement was signed, in the case of a prenup the agreement the document is signed at least 21 days before the wedding, the agreement complies with contract law, and finally both intended spouses give disclosure of their assets. If all those conditions are met the agreement would bind the family judge’s decision on how to split assets on divorce.
Another aspect of the Bill is the definition of ‘’matrimonial property’’. At the moment the family Court can make orders about both matrimonial and non-matrimonial property and there isn’t a statue based definition of what is and isn’t matrimonial or family property. The Bill proposes a list of factors that the Court would consider when deciding how to divide matrimonial property but the basic premise would be an equal division of family property unless a factor or factors applied to justify an unequal split.
Perhaps the most controversial component of the Bill is the inclusion of time limited spousal maintenance. Under current English law a husband or wife (normally the financially weaker party who may have not pursued a career to bring up the children or to support their spouse) can get spousal maintenance for ‘life’ or if the Court thinks it is more appropriate and fairer for a time limited period only. Alternatively the Court, in an appropriate situation, can order no spousal maintenance will ever be payable (known as a clean break). England is called ‘’ the divorce capital ‘’of the world because of the perceived generosity of spousal maintenance and the idea of the ‘’meal ticket for life’’. That view has been confirmed by a number of recent media reports where spouses have asked for spousal maintenance many years after their separation and following ex-spouses post-divorce business success.
The proposal that spousal maintenance is always time limited is similar to family law in other countries such as Scotland, some European countries and some states in the USA, such as Massachusetts. For example, in Massachusetts the length of time that spousal maintenance is paid is dependent on the length of the marriage. Those sorts of spousal maintenance regimes can create hardship and even if a financially weaker spouse can apply for a longer period of spousal maintenance , as in proposed in the Bill if there is serious financial hardship , that puts the onus on the weaker party to the Court proceedings and also recreates the judicial discretion.
The Bill has started a long overdue debate on family law and how we share the financial fruits of marriage. That discussion is needed as currently family solicitors and the Court refer to an Act that was made law in 1973 and subsequent individual judge’s decisions for ongoing guidance. Baroness Deech rightly identifies that both families and individuals have moved on from 1973 but I anticipate that , amidst the Brexit Bill discussions, there will be an ongoing debate about the role of Court discretion in deciding ‘fairness’ in the split of family assets. I suspect we are a long way away from a formulaic approach to dividing assets and that a degree of discretion will always be needed to address the needs of individual spouses and their families.
In the meantime the best advice for those who are contemplating marriage, or are entering into a new chapter of their marriage, is to draw up a prenup or post nup agreement. For those who are in the process of splitting up the best advice is to get specialist legal support to help them understand the range of family Court orders and how a judge will currently exercise his or her discretion in the financial split of assets.
For advice about the preparation of a prenup or post nup agreement or for advice about dividing assets on divorce or reviewing spousal maintenance please give me a call on +44 (0) 1625 728012 or contact me by email at [email protected]