What does a divorce maintenance order look like?

A few people have contacted me and asked: “What does a maintenance order look like?”   This is a very good question.  I was just about to post a few pointers on the variation of a maintenance order  (what lawyers call, periodical payments) when this question stopped me in my tracks.  I should not have presumed that everybody coming across my posts would already be paying, or receiving income from, a maintenance order.

So, here below, is a really simple one. The Upper Egyptian Court has awarded a periodical payments order to Cleopatra in her divorce from Caesar.  Caesar is the Applicant and Cleopatra is the Respondent. There are no children so Cleopatra will only be receiving spousal maintenance.

The Applicant shall pay periodical payments to the Respondent.

Payments shall be at the rate of 1200 gold coins per annum payable monthly in advance.

Payments shall commence on 1st July 500 BC with the payment of 100 gold coins.

They shall end on:

a) the death of either of the Applicant or the Respondent; or

b) the Respondent’s remarriage; or

c) the Respondent’s cohabitation with another man for a period in excess of six months, or periods when aggregated together, in excess of six months

d) a further order terminating payments.

This is the very simple periodical payments order obtained by Cleopatra’s lawyers. Crafty old Caesar, who suspected that Cleopatra was going to shack up with Mark Anthony as soon as the ink was dry on the divorce papyrus, has negotiated a termination of the payments after six months’ cohabitation.

Periodical payments orders can be much more complicated than the example given above but this example has all the classic elements of the orders approved in most county courts.

 

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Form E: bank and building society accounts

I’ve had a few clients come unstuck on the dreaded Form E financial disclosure form.  It’s a beast of a document and is the foundation of the disclosure process in divorce and civil partnership proceedings.  I will be posting on some of the more problematic sections of this document such as paragraph 2.3 which asks for:

2.3 Details of all personal bank, building society and National Savings Accounts that you hold or have held at any time in the last twelve months and which are or were either in your own name or in which you have or have had any interest. This applies whether any such account is in credit or in debit. For joint accounts give your interest and the name of the other account holder. If the account is overdrawn, show a minus figure.

If you have money in another person’s bank account, you must still disclose your interest (the amount you have in the account) at this section of the Form E.

If you have online access to your bank accounts you can usually print off the last 12 months’ bank statements directly to your printer.  If you are having difficulty obtaining missing bank statements, your bank is obliged to provide up to the last 6 years’ worth of bank statements provided you state clearly it is a request under the Data Protection Act 1998 for which the maximum charge is £10.00.

There are some common mistakes to avoid:

  1. Forgetting to include details (and statements) for accounts closed in the past 12 months.  If your spouse is aware that you had such an account but you do not disclose it, it can arouse suspicion and mistrust.  Remember to include the closing statement so it is clear the account has been closed.
  2. If you do not want your spouse to know where you are living (arising from a genuine concern for your safety or that of your children) and have withheld your address in the divorce or civil partnership proceedings, you should ‘redact’ (blank out with a thick felt pen) any identifying geographical information such as your address and also any local ATM cashpoints that you use.  DO NOT BLANK OUT AMOUNTS OF MONEY AS THAT WOULD NOT BE JUSTIFIED.
  3. Ensure you have complete sets of statements for each account.  Through no fault of your own, you may be missing a few pages and if there are significant changes in the balances of the accounts then your spouse may think you are hiding something.
  4. If the bank account you disclose is a joint one then make sure you only put down 50% of the final balance as your interest.
  5. Finally, do not forget to deduct the value of any overdrawn accounts rather than adding them in.  This happens more often than you may think, especially if there are 8 or 9  bank accounts all jostling for space in this section of the Form E.

Good luck!

 

 

 

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Alternatives to Court

Many people are unsure what type of process would best suit them when considering divorce or separation.  The days of running off to the court to issue a divorce application before your spouse are long gone (well, mostly).  Many clients would prefer to keep the process out of court unless it can be helped and, sometimes, involving the court is the only option.

Terms like ‘mediation’ or ‘collaborative law’ are chucked at prospective clients by lawyers in an information blizzard at a first meeting.

Divorce Finance Toolkit thinks a picture (or a diagram) paints a thousand words and therefore offers the following excellent example from Resolution which can be found here.  It is worthwhile considering each of the options open to you carefully.  Most family lawyers will send you a comprehensive letter following a first consultation which should set out the options for you and perhaps discuss the pros and cons of each model in view of your own particular family circumstances.

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Maintenance: RPI or CPI?

One of my learned colleagues at Family Law Partners, a Deputy District Judge, popped his head over the top of my computer screen recently and asked me for my views on linking maintenance payments to the Consumer Prices Index (CPI).  This got me to thinking: is there an advantage for my clients to have their payments linked to the CPI instead of my favoured link, the Retail Prices Index (RPI)?  See my earlier post on why lawyers link maintenance to inflationary measures in the first place.

 After all, the Chancellor  in his  June 2010 Budget announced the Government’s intention to use the CPI for the price indexation of benefits and tax credits from April 2011.  Previously it had used the RPI.  So is there a benefit to having one’s maintenance payments  linked to the CPI?  As usual, the answer is: it depends.  The fact that the Government has linked payments it has to make (like benefits) to CPI and the payments it likes to receive (like students’ loans) gives us a clue.  Look at the following graph.

RPI/CPI Comparison 2009 to 2011

 (Source: Office for National Statistics licensed under the Open Government Licence v.1.0)

 

This shows for the last 12 month period that CPI was 4.0 per cent and RPI was higher at  5.3 per cent.

Divorce Finance Toolkit’s conclusion: if you are paying maintenance you might want to follow the Government’s lead and ask your lawyer to link to CPI (lower) and if you are receiving maintenance then you should insist upon it being RPI (higher).

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Protecting Maintenance against Inflation

We are all aware of the impact of rises in the cost of living.  Food prices and petrol  all go up but very seldom down. If you are reliant upon maintenance payments (also known as periodical payments) following divorce, then the real value of those payments is going to decrease over time as the cost of living rises.  Unless, of course you are able to link the maintenance payments to the increases in inflation.

If your lawyer  is negotiating maintenance for you, either child periodical payments or spousal periodical payments, he or she should make sure that the payments will be increased each year to keep up with the rising cost of living.

The usual method is to link payments to the Retail Prices Index (RPI).  The RPI is the Government’s ‘shopping list’ of the items we all need to spend money on in the shops as well as other common expenses thrown in like mortgage interest, transport costs and council tax.  So lawyers will directly link their clients’ maintenance to the RPI.  By way of example, if a person is awarded £6,000 a year maintenance and it is index linked (linked to the RPI) then every year the £6,000 will be increased by the rise in inflation over the year in question.  So, the net effect is that the £6,000 will increase to, say, £6,300 in the second year.  The same exercise will be repeated each year for the duration of the award of maintenance.

Although there may be instances where it is not really necessary to link payments to the RPI, such as payments that may only be in existence for a short period of time, or where the payments are nominal payments (0.5 pence per year), you should ask your lawyer about linking any payments of maintenance to the RPI.

 

 

 

 

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Don’t forget the State pensions

I would hope that most couples facing divorce or civil partnership dissolution would understand the importance of private pension assets (and the possibility of a pension split) in the overall capital settlement.  I find a surprising number of potential clients have not considered the value of state pensions.  It does not hurt to obtain a state retirement pension forecast  and capital value if getting divorced for a number of reasons:

  1. Your financial position at the point of retirement (which may be closer than you think) may not be as good as you would hope, especially if you are a woman who has had a number of career breaks to bring up children.  You can obtain a state retirement forecast using BR19.
  2. If you are considering a financial settlement that will include a pension share, your solicitors will want your independent financial advisers to have up-to-date information especially if there is going to be an attempt to equalise pension incomes for both spouses at the point of retirement.
  3. The capital value of a State Second Pension (S2P) may be greater than anticipated and in the course of a long marriage, it would be advisable for the solicitors to the parties to obtain a value for this pension fund.  If you are involved in proceedings then it is a requirement of the financial disclosure forms (Form E) that you or your advisers attach a valuation to the form before you send it to the Court.  You can use Form BR20 to ask for the value of the capital fund held by the State on your behalf.

If in doubt, submit the forms, or ask your advisers if they are required.

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Form E=MC2

Form E – Towards a new theory of relativity

With all apologies to Einstein I would like to propose a re-formulation of his classic theory E=MC2.  As follows:

E = Form E

M= Matrimonial

C = Confusion

2= both spouses/civil partners

The expense of the divorce case is accelerated by the Form E creating Matrimonial Confusion in the minds of both spouses.  Many people struggle with the Form E  (some lawyers too, I dare say) and it is a form that can catch out the unwary.  Luckily, instead of just one Form E, we now have three Forms E.  Simple.

The Family Procedure Rules 2010 came into force on 6th April, 2011.  One of the changes introduced is the splitting of the olde worlde Form E into three new forms:

Form E – this is the document that should be used by husbands and wives or civil partners in divorce or civil partnership dissolution proceedings to disclose their finances when applying for a Financial Order or if applying for financial relief following a divorce or dissolution overseas.  This is by some margin, the largest and most complex  financial disclosure document designed to torture lawyers and clients alike.  Fortunately, I expect the Siaro platform to be able to generate a Form E for family lawyers with virtually one click which should produce costs savings for clients.

Form E1 – this is the document that should be used for any other financial remedy in the County Court (in other words, do not use this form if you are divorcing your spouse or civil partner).  Form E1 is suitable for claims made on behalf of children under Schedule 1 Children Act 1989 (for instance, if the children’s parents are not married or in a civil partnership).

Form E2 – this is the document to use when applying for a financial order in the Family Proceedings Court (the Magistrates’ Court).  It is simplified and presumes that the parties will have a small capital base and modest income.

To attempt to shine some light on these Forms I will be dealing with certain pages or sections of the documents as and when they appear to cause some difficulty right here

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Self-Reppers and the level playing field

Someone needs to speak up for self-reppers.  It appears to me they get a bum deal.  In a post on my companion blog, Larkin’s Law, I examined the legal establishment’s view of self-reppers as ‘mad, bad and dangerous to know’.  I can’t believe that the vast majority of the people who find themselves without legal representation do so by design.  They are forced into this position by being excluded from forms of public funding and also finding that their private funds cannot stretch to obtaining full time legal representation.

Strategies

What can the self-repper do to partially level the judicial playing field? Here are a few suggestions:

  1. Research and reassurance.  There is plenty of information available on the internet and I will be compiling some useful websites in the Resources page.  But for now I would like to mention Wikivorce.  I think the strength of the site lies in the sense of community that its registered users feel.  There are free information sheets on the site and a forum for exchange of views and advice.  Some of the ‘advice’ needs to be treated with a pinch of salt as it is too general in nature but this is a good start.
  2. Unbundle the services you need.  By this, I mean set out what you need to achieve and see if some of it can be ‘process-driven’ like the divorce process itself for a start and if you don’t mind doing it online then try some of the DIY sites.  Naturally, using some of these sites would make the lawyer in me slightly nervous.    Ideally, every spouse having to file a divorce petition (I think the new rules dictate that I should call it a divorce application) should have the opportunity to talk through the contents of the  petition with a family lawyer.  There are some traps here but the self-repper does not live in an ideal world so an online DIY divorce it may have to be. But remember, if money is really tight, you can type out the petition yourself accessed from the Court Service website and make use of the free leaflets on the divorce process you can pick up at your local county court.
  3. On the presumption that there is no eligibility for public funding, consider raising a small amount of funds (beg, steal or borrow) to obtain advice on the likely financial outcomes of the divorce from a good family lawyer.  Here’s how to find a good family lawyer.  Expect and demand, unless there are virtually no assets and little income in the marriage, to spend at least two hours with a lawyer.  A good family lawyer will want to know everything about you, your partner, your children and the marriage, perhaps even your star sign before they would even consider themselves to be in a position to outline some advice for you.  But then what would you expect?  Can a twenty year marriage be reduced to a half-hour free interview?  I don’t think so.
  4. If you are going to run the case yourself including representation at court then try, on a piecemeal basis, to get advice from a lawyer, on the documents that have been produced so far and what you should expect to happen at the court.  If you are clear about the relevant issues and, perhaps, what you need to ask the Judge for, then this would be money well spent.
  5. Hope that your spouse is going to pay for legal advice even if you are not.  Let me explain.  If a solicitor has to deal with a self-repper instead of another solicitor then there is a tendency to explain everything as clearly as possible.  Indirectly, you will be getting the benefit of overall ‘guidance’ on court process and procedure even though you are not paying for it.  There may also be the small satisfaction of knowing that this will increase your spouse’s legal costs because of the extra time spent by his solicitor having to explain every nuance of the law to you in long letters.  The Judge is also likely to ask your spouse’s solicitor to undertake tasks that should properly be carried out by you just because the Judge wants to have someone to shout at for the next hearing if nothing has been actioned.
  6. If your spouse has instructed a solicitor and you are unrepresented then there is nothing to stop you picking up the phone to the solicitor in question.  It does not hurt to be pleasant (even if their client’s actions towards you have not been sweetness and light).  You can ask courteous questions: “About your last letter Mr Jones, you mentioned the hearing coming up next week, what will the Judge be expecting us to do at the hearing?  Is there anything I have forgotten to give you or the court for that hearing?  What are ‘directions’?  What directions will you be asking the court for, and why?”  Contrary to rumour, most solicitors are human and will respond constructively although you should be clear that they cannot be seen to ‘advise’ you specifically on what you should and should not do as that would conflict with their duty to their own client.
  7. If you have to attend court unrepresented then consider using a McKenzie Friend.  This is not a solicitor or barrister but, usually, a friend or associate who can give you moral support, take notes for you and give quiet ‘advice’ whilst not being allowed to perform the role of advocate on your behalf.  There is a useful guidance note on how McKenzie Friends can conduct themselves and this should be read before you consider asking someone to help you in this way, here: Practice_Guidance_McKenzie_Friends.

 

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A divorce finance toolkit. Why?

I have practised family law, mainly in relation to financial issues, for the last 14 years.  I hope I have learned a few things along the way.  Things that might be of value if I shared them with people unfortunate enough to be enduring the physical, emotional and financial hideousness of the process we have labelled ‘Divorce.’

Of course, I already share my knowledge and experience on a daily basis but usually only with those people who pay me to do so.  Not everyone can afford access to lawyers.   Or at least, not on a week-in, week-out basis on cases that can take several years to resolve.   That is why we have legal aid although only for a short while longer as the Government intends to withdraw it for most types of family law issues.  One such issue, and it’s a very big one, is divorce finance. The questions don’t get much bigger:

  • Will I have to sell the family home?
  • How much maintenance will I and the children receive?
  • After 40 years of marriage and with no pension, how will I survive when I retire?
  • Will my maintenance stop if I live with someone else?

It is not my aim to provide a dry list of information that is readily and  widely available elsewhere, such as, “How do I fill in a divorce petition?” There are a host of resources already available  that address these basic questions and I will point them out whenever I can.

What I want to do is address the questions that you don’t normally get to pose unless you can afford to purchase the answers: from a family finance lawyer.  Whilst there is some information out there on the web on certain forums, that tries to deal with finance issues on divorce, I do not have much confidence in the quality of the information on those sites.

The truth is, I can’t give precise answers to those big questions in the pages of this blog because every single person, or couple, is in a different position.  But what I can do is to share information, guidance and a few tricks I’ve picked up along the way.  This will not in any way replace the need for individual legal advice on the many and varied problems facing people as they negoiate the difficult path towards the dissolution of a marriage.  But, my Toolkit will aim to inform, encourage and empower those people who pass along this way.

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