High Net Worth Clients Flashcards

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1
Q

Matrimonial Property Regimes

A

-Separate Property Regimes

-Community of Property Regimes

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2
Q

BACKGROUND TO HNW FINANCIAL ORDER PROCEEDINGS

A
  • 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
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3
Q

White v white 2000

A
  • 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
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4
Q

The sharing principle

A
  • 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.

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5
Q

NON-Matrimonial Property

A

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
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6
Q

Pre-martial assets

A

-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.

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7
Q

Inherited assets

A

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.

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8
Q

s.25 Factors

A

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

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9
Q

s.25 Factors

A

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
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10
Q

Clean break in HNW FO proceedings

A

-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
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11
Q

Duxbury calculations

A

map like co ordinates

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12
Q

Maintenance awards in HNW cases

A

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

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13
Q

Background to PNAS

A

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

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14
Q

Are PNAs enforceable?

A

In Many countries - yes

in England and Wales - No

Contrary to Public Policy

  • cannot oust jurisdiction of divorce court
  • institution of marriage undermined
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15
Q

Pros of PNAs

A

-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

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16
Q

Cons of PNAS

A

-goes against the principle of equal sharing
- unfair on the party in the weaker bargaining position?
- It is not possible to predict the parties’ circumstances in the future?
- Disclaimers necessary to prevent negligence claims

17
Q

RADMACHER V GRANATINO

A

“The court should give effect to a Nuptial Agreement that is freely entered into by each party with a full appreciation of its implications unless in the circumstances prevailing it would not be fair to hold the parties to their agreement”

  • Were there circumstances attending the making of the agreement that detracted from the weight that should be accorded to it?
  • Were there circumstances attending the making of the agreement that enhance the weight that should be accorded to it: the foreign element?
  • Did the circumstances prevailing at the time the court made its order make it fair or just to depart from the agreement?
  • Were there circumstances attending the making of the agreement that detracted from the weight that should be accorded to it?
    – Duress, fraud and misrepresentation
    – Exploitation of a dominant position
    – Parties’ circumstances
    – Legal advice and disclosure at the time the
    PNA was entered into

Factors enhancing the weight afforded to the PNA: the foreign element
– i.e were both parties from and was the agreement made where PNAs are enforceable?
– Foreign element less relevant post
Radmacher

  • Did the circumstances prevailing at the time the court made its order make it fair or just to depart from the agreement?
    – Children
    – Autonomy
    – Non-matrimonial property – Changes in circumstances
18
Q

Landscape post Radmacher

A

cases where PNAs. given weight
Z v Z [2011]
V v V [2011]
- Pna deemed a ‘good and powerful’ reason to depart from equal division
-needs a critical factors in both cases

Luckwell v Limate [2014]
cases where PNAs given little /no we weight

Kremen v Agrest [2012]
-To uphold the agreement would be grossly unfair
-PNA not entered into freely with a full appreciation of its terms
-PNA did not come close to meeting the needs of the wife and children

19
Q

LA commission and PNAs

A

Matrimonial Property, Needs and Agreements

  • Made recommendations including the introduction of Qualify Nuptial Agreement (QNAs)
  • set out certain preconditions for QNAs:

contractually valid

statement of understanding of implications

made no less than 28 days before the marriage or civil partnership

full disclosure

independant legal advice.

20
Q

Drafting a PNA

A

Disclosure
- full financial disclosure of both parties assets
- usually done by Form E

Independent legal advice
- Helps avoid arguments of undue pressure/ duress
- shows they understand what they are agreeing to

Timing and Duress
Ideally PNA to be signed not less than 28 days before the date of the marriage