High Net Worth Clients Flashcards
Matrimonial Property Regimes
-Separate Property Regimes
-Community of Property Regimes
BACKGROUND TO HNW FINANCIAL ORDER PROCEEDINGS
- Law and procedure is the same in all financial order proceedings:
– Section 25 factors
– FPR 2010 - In HNW cases needs is not such an issue
– Surplus assets over needs
– Allows courts to consider arguments on what assets should be included in the pot
White v white 2000
- Court’s objective is to achieve a ‘fair outcome’
- No longer exclusively focusing on the needs and reasonable requirements of the financially weaker party
- Any award to be measured against the ‘yardstick of equality’
- A departure from equality to be justified by good reason
- No discrimination between homemaker and breadwinner
The sharing principle
- White v White
– Establishes the concept of the ‘yardstick of equality’
- Miller v Miller;
McFarlane v McFarlane [2006]
– Develops this idea of an equal entitlement to share the
assets of the partnership
– Also looking at how best to achieve ‘fairness’ * Needs, compensation, sharing
charman v charman 2007
- confirms that the yardstick of equality has now been elevated to ‘the sharing principle’
-The starting point should be an equal division of the assets unless there is good reason to reason to depart from equality.
NON-Matrimonial Property
Miller v Miller; McFarlane v McFarlane 2006
- the court considered the possibility of distinguishing between matrimonial and non- matrimonial property
- in HNW cases pre-marital and inherited assets are to be considered a different class of asset to those that are clearly matrimonial
- the priniciple of equal division may not apply to non- matrimonial property with the same force
- the length of the marriage and the way the assets are dealt with during the marriage may erode the distinction
Pre-martial assets
-Pre-martial assets often treated as non-matrimonial property in HNW cases and carved out from the matrimonial pot
- when deciding what amount to exclude the court look at:
- Duration of the marriage
-Mingling of assets
-Needs of both parties
-Allowances for potential growth in the pre -martial assets
-THe court is trying to achieve fairness.
Inherited assets
Inherited assets seen as an unmatched contribution made by the party who brings it to the marriage and often treated as non-matrimonial property.
not excluded from the courts powers to distribute the assets but are often treated differently depending on:
– Duration of the marriage
-Mingling of assets
-Needs of both parties
-Allowances for potential growth in the pre -martial assets
-THe court is trying to achieve fairness.
s.25 Factors
s.25(2)(a) assets and resources of the parties
court will consider distinction between matrimonial and non mat property
s.25(2)(b) needs and s.25(2)(c) standard ion living
- needs will be generously assessed
- High standard of living impacts upon quantification of ‘needs’
s.25(2)(d) age and duration
Miller v Miller (2006)
short marriage no bar to equal division of the assets
s.25 Factors
s.25(2)(f) contributions
Lambert v Lambert 2003
-only in very limited and exceptional circumstances will contributions be a reason for departing from equality
sorrel v Sorell 2005
husband demonstrated a ‘spark’ of genius
-non -matrimonial property
S25(2)(g) conduct
-conduct only be taken into account where it is inequitable to disregard it and
- in general, the conduct will have a financial implication
Clean break in HNW FO proceedings
-Where possible courts will try and attain a clean break
-If there are sufficient funds the courts might try to capitalise maintenance payments
- application of Duxbury calculations which assesses the lump sum that an individual will need to provide an income for life
Duxbury calculations
map like co ordinates
Maintenance awards in HNW cases
Mc Farlance v Mc Farlane 2006
- needs
-compensation
- sharing the funds of the Matrimonial partnership
VB v JB 2008
-compensation should not be treated as a new ‘head of claim’
-in ordinary circumstances no party has a right to expect partly of income
Background to PNAS
What is PNA?
- contract
-entered into by parties to forthcoming marriage
-TO settle and regulate financial rights and obligations of parties
- in the event of the breakdown of the marriage
Are PNAs enforceable?
In Many countries - yes
in England and Wales - No
Contrary to Public Policy
- cannot oust jurisdiction of divorce court
- institution of marriage undermined
Pros of PNAs
-certainty
-more assets preserved for family members
-contract made at a time when parties are able to negotiate a settlement without animosity
- 2 in 5 marriages fail - so sensible to try and limit animosity, cost and time in reaching settlement