This month the Family Justice Council has released guidance aimed at helping parties involved in divorce and dissolution of a civil partnership understand the law on financial separation. With an increasing number of cases involving at least one party who is not able to access legal advice, the information is provided with a view to helping separating couples come to realistic and reasonable agreements surrounding their finances, or at least know where the starting point of their negotiations should be.
The guide is limited to advising generally on the law and how certain situations might be approached by a Judge in the case of a family with “normal levels” of wealth. The rich are excluded.
Emphasis is also placed on how certain situations <em>might </em>be dealt with. English family finance law is based on a Judge’s broad discretion and so, whilst an appreciation of the principles and powers underpinning the Court’s decisions is extremely useful as a starting point, reaching a fully-constructed conclusion may be somewhat more difficult. For example, the guidance informs each party that they are unlikely to maintain the same standard of living after they have separated; however, coming to an agreement as to how this reduction might be borne between them in pounds and pence is likely to be far more difficult.
Even in a situation where the basic framework of financial separation can be agreed, the guidance acknowledges the parties may still require legal assistance to make sure that the binding consent order reflecting their agreement and sent to the Court for approval deals with all the necessary arrangements and clauses to make the order reliable and enforceable.
There is no doubt that the guidance provides an extremely useful tool for parties who are working together to try and arrange their finances post-separation but there is also little doubt that for the large number of couples for whom trust and communication have evaporated, reaching a conclusion will be far more difficult without the assistance of a solicitor or mediator who can help narrow and assist in compromising the issues.
The guide, for very good reasons, also does not deal with the more complex areas of law: for example where there are complex business interests or there are concerns around one party hiding or disposing of their assets. In any of these situations the parties are advised to seek legal advice as soon as possible.
The widely reported Mossack Fonseca leak in Panama has provided new information on how assets can be hidden successfully and, at least on the face of it, left with very little link to the real owner of those assets. In circumstances such as this, a party may wish to consider asset tracing options. In addition, if one party can see that assets might be transferred overseas or otherwise put beyond the reach of the Court it will be necessary to seek appropriate freezing orders from the Court.
The Mossack Fonseca leak may bring to light a wealth of information to recently separated spouses and civil partners who settled financial matters without having a full picture of their ex’s finances. Following recent cases, these people will be able to ask the court to consider their financial arrangements afresh and make fair provision for them based on the real financial position.
If you feel that you need assistance in dealing with financial matters after a divorce; or If you have recently settled your finances and consider you are affected by this please contact the family team at Mackrell Turner Garrett on 020 7240 0521.