Financial Orders Flashcards

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1
Q

The Factors: s.25(1)

A

Section 25(1) MCA 1973:
– Court must have regard to all the circumstances of the case…
– …giving FIRST consideration to the welfare of any child of the family aged under 18.

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2
Q

The Factors: s25(2)

A

– s.25(2)(a) - financial resources:
* Capital assets: e.g. houses, monies in bank accounts, shares, investments, business assets and pension funds.
* Income: Current and future.
* Mortgage raising capacity: 3 times gross salary.

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3
Q

The Factors: s.25(2)(b) needs, obligations and responsibilities:

A

Capital needs: e.g. a house.
* Income needs: Outgoings e.g. mortgage/rent, council tax, utilities, food, clothes PLUS luxuries, depending on the value of the case (but be careful not to “overegg the pudding”!)

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4
Q

The Factors: s.25(2)(c) Standard of Living

A

-Only in HNW cases that both parties will be able to continue to maintain the same standard of living as before the marriage breakdown.
* Court will try to ensure that any drop in standard of living is borne equally by the parties.

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5
Q

The Factors s.25(2)(d): age of parties; duration of marriage:

A
  • The younger the parties are and the shorter the marriage, the more likely it is that they will be expected to achieve financial independence.
  • When a long marriage breaks down, the parties are likely to be older and their finances very much entwined.

Clean break less likely.

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6
Q

The Factors: s.25(2)(e) -Physical or mental disability:

A

-Disability might impact on a party’s earning capacity…
-… and increase their financial needs.

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7
Q

The Factors: s.25(2)(f) - Contributions:

A

-Marriage is a partnership, so unequal financial contributions will not usually be relevant.

-White v White [2000]: Outlawed discrimination between the contributions of the “breadwinner” and the “homemaker”.

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8
Q

The Factors: White v White [2000]: Lord Nicholls:

A

“There is one principle of universal application which can be stated with confidence. In seeking to achieve a fair outcome, there is no place for discrimination between husband and wife and their respective roles”.

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9
Q

The Factors: s.35(2)(g) - Conduct:

A

-Only relevant if “obvious and gross”.
-Adultery is not relevant conduct.

-s.25(2)(h) - Any benefit lost

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10
Q

The Factors: s.25(A): Clean break

A

– Mandatory for court to consider whether a clean break is appropriate.
– Severs financial ties between the parties.
– Most likely to be achievable:
* Short marriage;
* Parties of a similar financial standing; or * High net worth cases.

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11
Q

The Factors: Case Law: White v White 2000

A
  • Case law:
    White v White [2000]: Two key principles:
    – No discrimination between parties based on their roles (discussed previously).
    – Judges should check their decision against the ‘yardstick of equality’ and be able to justify any departures.
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12
Q

Orders

A

Categories of financial orders:
* Capital orders
* Income orders
* Pension orders

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13
Q

Capital Orders: FMH

A

1) Sale and division
2) Transfer into one party’s sole name
3) Mesher order
4) Charge

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14
Q

Capital Orders: FMH

A

1) Sale and division
Might be appropriate where:

  • Unfair to transfer FMH to one of the parties;
  • Not financially viable to keep up mortgage payments; or
  • Neither party wants to remain in the property

2) Transfer
* Might be appropriate where there are sufficient assets in the pot to compensate the other party.
* Often party with whom children will live will want FMH transferred into their sole name.

3) Mesher order
* Deferred sale of FMH.
* FMH held in joint names pending sale.
* One party has the right to occupy FMH.
* Property sold on agreed trigger date, e.g. children reaching majority. Proceeds divided.
* Enables one party to stay in FMH without depriving other of their beneficial interest.

4) Charge
* Property transferred into one party’s sole name with a charge in the other’s favour.
* Property sold on agreed trigger date, e.g. children reaching majority.
* Enables one party to stay in FMH without depriving other of their beneficial interest.

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15
Q

Capital Order: Other assets

A

Possible orders:
* Current owner keeps
* Transfer from joint names into one party’s sole name
* Transfer from one party’s name into the other’s
* Sale and division of proceeds
* Lump sum

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16
Q

Income Orders: Spousal PPs

A
  • Order that one spouse pays the other a regular sum of money to provide them with an income.
  • Might be appropriate:
  • Where there is a disparity in the parties’ incomes; and/or
  • Where one party cares for the children which may affect their earning capacity.
17
Q

Income Orders: Spousal PPs Might NOT be appropriate:

A
  • Where parties are young and do not have children;
  • After a short marriage;
  • Where parties have similar incomes/earning
    capacities; or
  • Where the financially weaker party can be paid a
    lump sum instead of ongoing periodical payments (capitalised maintenance). HNW cases only.
18
Q

Income Orders: Spousal PPs Quantum

A

1) Nominal PPs
- E.g. £1 per annum.
- Keeps the door open to enable recipient to vary
upwards if necessary.

2) Substantive PPs
- Where one party requires ongoing financial assistance from the other to meet their outgoings.
- Appropriate where one spouse earns more than the other.

19
Q

Term

A
  • Term means how long the periodical payments order will continue for.
  • Three options:
  • Joint lives order
  • Fixed term extendable order
  • Fixed term non-extendable order
20
Q

Income Orders: Spousal PPs TERM

A

1) Joint Lives

  • Open ended spousal periodical payments.
  • Order continues until recipient dies or remarries, so no clean break.
  • Only usually after a long marriage where one party is financially weaker than the other
21
Q

Income Orders: Spousal PPs Term

A

1) Fixed term extendable
- Periodical payments for a fixed period.
- Recipient can apply to extend order during its term.
2) Fixed term non-extendable
- Periodical payments for a fixed period.
- Recipient cannot apply to extend order during its term.

22
Q

Pension Orders

A
  • Where parties’ pension funds are similar in size: each party keeps their own.
  • Where there is significant disparity in the size of the parties’ pension funds:
  • Offsetting
  • Pension sharing order
  • Pension attachment order