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Financial Outcomes

How will the English family court know what are the assets to be divided?

There is an obligation on each spouse to give full and complete disclosure of all their resources worldwide.­ However this applies in most countries!­ In our international experience, England is a leading country in its intensive and effective investigation of disclosure, with very wide international powers to obtain documents and information.­ England requires, and often obtains, disclosure of personal assets held in the name of trusts, companies, other family members or in other ways designed to conceal true ownership and wealth.­ England’s leading family court judges and lawyers are very used to dealing with international spouses who hide assets behind offshore trusts and companies, who give dishonest disclosure or who simply will not answer questions.­ Ultimately, the court will infer a level of wealth and make financial orders accordingly.

How does the court preserve assets?

An important aspect is to make sure that any asset against which it is intended to seek a family court order stays in place until the final settlement and is not transferred out of reach including to another country.­ Freezing injunctions against bank accounts, real properties etc and similar precautionary steps are crucial.­ They are often made if there is any risk of dissipation or disposal of assets.

English lawyers and English judges frequently work closely with lawyers, judges and others abroad to ascertain details of worldwide financial resources in a case.­

The English family courts make worldwide freezing orders against assets abroad.­ The orders are invariably made without notice, very quickly and enforced in a matter of hours.­ The English courts ask other country’s courts to investigate disclosure including to undertake a cross examination of a spouse or third parties to ascertain the truth of ownership of assets, particularly if the spouse or third party will not travel to England or cooperate.

Is it better to reach an agreement?

Yes.­ Although the English court is not bound by any agreement, in practice a couple who, post separation, reach an agreement or settle after legal advice and disclosure will invariably have that agreement embodied into a final court order.­ This significantly saves costs and time, and reduces distress to children.

Although not always easy logistically within the international context, we strongly recommend the use of mediation and other forms of alternative dispute resolution (ADR), once forum for the proceedings has been established, as a preferable means of settling cases.­

What will happen to our finances if we have a divorce in England?

England does not have an automatic percentage division of assets on divorce.­ It seeks to produce a just and fair outcome in each case.­ It takes into account a number of factors.­ It is discretionary.­ This has the considerable advantage of flexibility and individual justice.­ However it has the significant disadvantage of uncertainty and lack of predictability of outcome and so potentially increasing costs.­

The objective is to produce a fair outcome, taking account of needs, compensation, sharing and any agreement.­ Although there is no automatic division of assets, the courts have stated that the principle of English divorce financial provision law is equality of sharing.­ Assets acquired during the marriage (“marital acquests”) will almost always be automatically divided equally unless the needs of the parties, especially reasonable accommodation for any children, are greater.­ In these circumstances, and inevitably many cases come into this category, the courts will look to provide for needs.­ This will dominate (“trump”) any equality sharing.­ In relation to non-maritally acquired assets, it will be easier to show good reasons to depart from equality division, although again reasonable needs will dominate.­ Non-maritally acquired assets includes pre-marriage assets, inherited assets, some post separation assets and also has regard to length of marriage, particular contributions, the mixing of non-marital with marital assets, illiquid assets and other special factors to produce a fair outcome.

Spousal maintenance, also known as alimony, may be in addition to this division of capital.­ It takes the form of monthly or other periodical payments.­ It may continue for a term of years e.g. to allow opportunities to retrain and become self-sufficient, or it may be for life.­ Alimony ends on remarriage.­ It may be reduced or suspended during cohabitation.­ Sometimes alimony can be capitalised to produce a clean break.­ England does not have automatic short term alimony orders as found in some countries.­ In addition there is child support.­ England has a Child Support Agency (now C-MEC) but it does not apply if one parent or a child is abroad.­ It has fixed calculations based on the income of the paying party.

If the financial resources are limited, the priority tends to be provision of accommodation for children for their minority with the primary residential parent.­ This may be the former family home.­ Sometimes this may involve the other parent receiving their “interest” in property many years later when the child has reached 18 or ceased full time education.

What happens about pensions?

The English family court can make orders sharing pensions including transferring part of a pension to the other spouse.­ However this can only be against pension companies in England.­ This is relevant to an international family if the pension is abroad, when advice from the pension company or a foreign lawyer should always be taken in advance of the settlement to make sure an effective order can be made and implemented.­ Similarly, if the pension is in England and the divorce is abroad, a separate English order may often be needed to give effect to any foreign family court pension sharing arrangement.­ English legal advice should be taken before the foreign final financial settlement is made abroad to make sure it is in fact enforceable against the English pension fund.

 

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When Cupid's Arrow Crosses National Boundaries"When Cupid's Arrow Crosses National Boundaries" by David Hodson OBE and Ann Thomas is the essential guide for international families.