Our Family and Matrimonial team are seeing an increasing number of cases where the well-meaning ‘Bank of Mum and Dad’ is trying to retrieve its money from their child’s former partner or spouse following a split.

With one in three first time property purchases made by couples attempting to overcome the UK’s unaffordable housing market we are expecting the tidal wave of enquiries to continue in the coming months and years as relationships break down.

In most cases the disputes are over whether the cash was initially intended as a gift or a loan. But without a prior formal agreement it can be difficult to prove intent at the time, leaving the other party room to argue it was a gift that doesn’t need to be repaid.

“The difficulty occurs when what was an informal arrangement is later looked at in a different light. What was a non-issue in happier times can become a significant area of dispute.”

It is important for a court to make the distinction, as gifts will be included in the matrimonial pot of assets to be distributed upon divorce whereas loans are classed as a liability to be repaid. In such cases, loans will be deducted from the total assets which results in less overall to divide.

The loan can often represent a significant portion of the assets so it really does make a difference as to whether or not it is an asset that can be split, or something that will not be entered into the calculations.

Issues can be further complicated by whether the courts are dealing with hard liabilities – mortgages, credit cards or commercial loan repayments – or “soft” liabilities such as loans from family and friends without formal repayment terms. In such cases of soft liabilities a court may decide there is less priority for repayment.

When acting for a person whose family has advanced the money and is insisting it needs to be repaid, we will look for evidence that supports it was a loan. Is there a written agreement? Were there emails? Have repayments been made? Quite often we find there may have been really large payments made shortly before the issue of proceedings. In such cases we will go through bank statements, ask questions on such payments and request further evidence.

Where property is concerned, parents should consider registering a charge over the title to the property, which in effect sets out clearly that the loan is there to be repaid.

Pre and post nuptial agreements also offer very clear protection while declarations of trust between parents and their children and / or their children’s spouses also give a clear record of intent.

For further advice on this… or any other Family and Matrimonial matters, please contact our expert team who will be happy to assist.

Article written by Head of Family and Matrimonial, Solicitor Kate Booth.

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More people planning their second, third or fourth marriage are entering into pre-nuptial agreements with their future spouse.

Older people who have previously had a bad experience and are looking to re-marry are among those most commonly seeking a pre-nup.

These factors are leading to a rise in pre-nuptial agreement enquiries for our Family and Matrimonial team.

Kate Booth, Head of our Family and Matrimonial department says:

“Over recent years the importance of pre-nups has grown. Historically they were not binding, but now they will hold sway in court when it can be shown that the agreement is fair to both parties. Both need to have had ample opportunity to seek independent legal advice, the agreement needs to be signed by both parties well in advance of the marriage and both parties must have given full disclosure about their personal finances before the marriage took place.

With all these things together the court will recognise that the pre-nuptial agreement was entered into together and in that case, it can be binding.

Where it can get complicated is when circumstances change – for example if children come along. In cases such as these it is all about reviewing and updating any initial agreement, so it remains relevant to the present-day family situation.

More than just factoring in financial situations a pre-nup offers the opportunity to look at the whole picture, taking all assets into account, ranging from family businesses to pets.

There may be someone with his or her own business or they may have a part of their family business. In this instance pre-nups are a useful tool to avoid a former spouse from staking a claim.”

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For further advice on pre-nuptial arrangements, or any other Family or Matrimonial related matters, please contact our friendly team who will be happy to assist.

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When advising clients in this respect we are guided by factors set out in Section 25 of the Matrimonial Causes Act 1973 – as is the Court.  The parties’ needs and ensuring fairness are important when looking at a division of the matrimonial assets and liabilities – taking into account all of the circumstances of the case. Children under the age of 18 are a priority also and their housing needs are important when making decisions about financial settlement. 

Whilst coming to an agreement about the division of matrimonial finances is important, it is also equally important to ensure that the agreement is reflected in a  document known as a Consent Order. This should be signed by both parties and approved by the Court to make it legally binding. 

Additionally, when providing the Consent Order to the Court for consideration, a further document known as a Statement of Information is required to give background detail about the parties’ assets and the circumstances behind  the decision making.  The statement of information will require disclosure of the parties’ assets in very broad terms to give the Court the background information that it requires to consider whether the agreement is fair taking into account all of the circumstances of each individual case.  

Even if there are no assets or liabilities to consider, it is advisable to have a clean break Consent Order to show there will be no further claims one against the other either now or in the future as to any capital or indeed as to any income. 

A Consent Order can deal with the transfer of property, payment of lump sums, a Pension Sharing Order (where one party shares their pension with the other party), spousal maintenance and also critically whether there is a clean break between the parties or whether there is an ongoing duty to pay spousal maintenance which can be set at a level of joint lives or a term of time such as years. 

Parties may sometimes not be aware that where there are children, there is an ongoing obligation to pay child maintenance regardless of whether there is a clean break in the divorce.  Where there is dispute about child maintenance, then the parties’ recourse is to make an application to the Child Maintenance Service to assess how much maintenance should be paid.

Samantha Chater in our Family Law team has found that those clients who can try and negotiate settlement between the two of them via mediation or with the assistance of one of our solicitors in the Family Department can expect to keep their costs to a minimum as it is always advisable to negotiate and try and settle where possible. 

For further advice and support please contact our friendly Family Law Team, we have four local offices covering the Coventry, Warwickshire and beyond.

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Kate Booth, Head of our Family & Matrimonial department warns clients to be aware that an agreed financial settlement may not be as final as they might hope. 

A recent Family Court case has once again highlighted the dangers of failing to take legal advice when dividing assets on divorce.  Here, the couple had agreed their financial split when they divorced 30 years ago, even signing a Deed of Separation. However, they failed to obtain a Consent Order – the court’s approval to their agreement.  This left them without a clean break.  Although they initially remained on good terms, disagreement arose years later.  Without a clean break order, the parties still have the right to make financial applications against each other into the future.

Kate say’s

“It is always essential for clients to deal with their financial arrangements formally on divorce – even if there are not many assets.  Often, when agreement is reached, spouses might be happy to proceed on a less formal footing, but this can store up problems for the future.  Circumstances may change, asset values may alter. If the court has not made a clean break, financial claims can remain open indefinitely.

Every couple’s situation is different, we provide personalised advice to ensure that clients can protect what is important to them and their family.”

If you require advice on the above, or any other family or matrimonial related matter, please do not hesitate to contact our friendly, understanding team.

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We are still approached by former couples despite the concepts of custody and access being replaced by Residence and Contact orders in 1989.  The law was further updated with the introduction of Child Arrangement Orders in 2014.

Kate Booth, Head of our Family and Matrimonial team, says:

“I still see a lot of clients wanting custody of their children, or access. But this system no longer exists. Widely regarded as very inflammatory and focusing too much on the parents, this has now been replaced by Child Arrangement Orders which focus more on the best interests of the child and less about the labels of who they live with. Courts are now more inclined to make shared care orders for a child to live with both parents where it is safe to do so even if there is not a 50:50 split of time.

Some parents are seeking legal advice while still reeling from their break-ups. The law is not there to help people win battles against their exes. The main aim of a shared care order is to act in the best interests of the child and to emphasise that one parent is no more important than the other.”

Contrary to common belief it is not necessarily the case that courts always acted in favour of the mother. The law emphasises the important role both parents play in a child’s life.

Despite the new system there can still be a lot of heat between separating parents and we still see power struggles and attempted shifts in dynamics but we would say it is not a given that you would need to meet your ex in court. Most issues are able to be resolved through mediation or other steps. Or if the parents are amicable and have worked most things out themselves and have a few last issues they can’t agree on we can help iron out those remaining issues.

Where children are involved, we always advise people not to involve a court unless absolutely necessary –  court orders can be rigid and if made when the children are five or six then may not be right for them when they are 12 or 13.”

For further advice on this, or any other Family or Matrimonial issue, please contact our friendly team. We have local offices in Coventry, Warwick, Balsall Common & Southam.

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In addition, it is no longer generally possible for one person to claim their costs from the other except in rare cases.  Neither can the other spouse defend a divorce other than in very limited circumstances.

As a result of the new procedure HM Courts & Tribunals Service received 3,000 divorce applications in the week following the introduction of reforms, a 50% rise on the weekly average.

Natasha Aspinall & our Family Law team have found that those clients who are on amicable terms with their now ex-partner have welcomed the option of applying for the divorce jointly. 

As divorce applications are now dealt with online through the court it has become much easier to check the status of a divorce as it progresses.  This has also eliminated much of the delay which could previously occur when court staff were processing paper-based applications. 

Overall, it appears that no fault divorce has been welcomed by many and has in most cases reduced time spent at the outset of the divorce deciding which fact to rely on and agreeing details of behaviour which undoubtedly led to bad feeling from the start of the process. 

For further advice and support, please contact our friendly Family Law Team.

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