Finances Relating to Married and Unmarried Couples
When a couple separates, it does not necessarily mean Court proceedings will need to be issued. In relation to married couples, the parties could arrange for Voluntary Disclosure to take place. This is where the parties usually exchange a document called a Form E which lists all the financial information relating to each party. The solicitors representing each party consider the Form E and will advise on what settlement there should be between the parties based on the section 25 criteria of the Matrimonial Causes Act 1973, which are listed below.
If the matter cannot be resolved through Voluntary Disclosure, Court proceedings will need to be issued. How the Court divides the assets of a relationship depends on whether the couple are married or not.
1. The Married Couple
For married couples, the Court will make a financial order, which is known as ancillary relief. This covers the sale or transfer of property, maintenance payments made to a spouse, a lump sum payment and/or pension sharing and attachment orders. It also covers school fees and child maintenance "topping-up" orders, as well as child maintenance orders made by agreement between the parents.
The principles the Court considers when deciding the division of the assets of the marriage are enshrined within section 25 of the Matrimonial Causes Act 1973 (otherwise known as the section 25 criteria):
- Income, earning capacity, property and other financial matters each party has or is likely to have either now or in the foreseeable future.
- The financial needs, obligations and responsibilities each party has or is likely to have in the foreseeable future.
- The standard of living enjoyed by the family before the breakdown of the marriage.
- The age of each party and the length of the marriage.
- Any physical or mental impairment each party to the marriage has.
- The contributions each party has made to the welfare of the family, including any contribution made by looking after the family home or caring for the family.
- The value to either of the parties to the marriage of any benefit (for example, a pension) which ... (by reason of the divorce) that party will lose the chance of acquiring.
In practical terms the concern of the Court is to ensure equality and fairness between the parties and if there are any children of the marriage, the Court will also consider keeping a “roof over the children’s head” as being a paramount importance. When deciding on the division of the assets of the marriage, the Court will start at a 50/50 split and then consider whether based on the section 25 criteria there should be a shift away from this.
2. The Unmarried Couple
One of the most common misconceptions in English law relating to family law is there is such a thing as a “common law marriage”. Quite simply it does not exist and with the rise in couples living together as opposed to seeking to marry, the Law Commission has suggested proposals placing the law in line with married couples relating to the division of assets on a divorce.
However until the law changes, the law as it relates to unmarried couples is that property such as a house which is held jointly shall be divided equally unless there is a clear contrary intention. If a property is held in the name of one party but the other party has contributed towards it in some way i.e. whether through direct financial contributions or through conduct, the Court will decide what share that party should receive.
With regards to other items of property such as clothing, if a former partner does not return them, all that can be done is to issue Court proceedings for the return of them.
If an unmarried partner dies and a will has not been drafted, not only do the intestacy laws make no provision for the surviving partner to inherit from the estate of their partner, but also the surviving partner does not benefit from the exemption from Inheritance Tax that would apply if the deceased’s estate passed to a spouse or civil partner. Indeed, in order to receive anything at all, the surviving partner may well have to go to Court to show that they co-owned assets which in some cases may have been paid for by both partners but were owned in one name only. The surviving partner may also have to show that they qualify for financial provision to be made out of the estate under the Inheritance (Provision for Family and Dependants) Act 1975, which is designed to protect the dependants of people who die without leaving adequate financial provision for them. In any event, the surviving partner may face severe financial pressure whilst a claim is ongoing, even if it is ultimately successful.
Children
When a couple separates, there are a number of issues relating to children, which can be resolved either through a formal agreement or through the issuing of Court proceedings:
- Parental Responsibility allows a person to be legally responsible for the care and well being of a child. This will include making decisions over the child’s education, religion, medical treatment etc.
The following people will automatically have Parental Responsibility:- mothers by the mere fact they have given birth to the child;
- fathers if they are or have been married to the mother at any time since the birth of the child or they are registered jointly with the child’s mother on the birth certificate (this only applies for births since the 1st December 2003) or they have acquired it by formal legal agreement with the mother or by court order;
- step parents, if they have acquired Parental Responsibility by formal agreement with both parents with Parental Responsibility;
- anyone else who has been granted Parental Responsibility under a court order;
- a local authority where there is a care order in force;
- guardians who have been formally appointed in accordance with Section 5 of the Children Act 1989.
There are a number of other orders which can only be obtained through the Court in relation to children:
- Residence Order – this confirms who the child should live with. In some cases a joint residence order can be granted by the Courts.
- Contact Order – this confirms who the child should have contact with and what sort of contact it should be.
- Prohibited Steps – this prevents an event happening to the child i.e. preventing the child being removed from the care of a party. Usually this order is only meant to last a few months.
- Specific Issue Order – this deals with an issue relating to the child such as which school the child should attend.
The following people can apply for the above Orders:
- A parent or guardian.
- A person who has a Residence Order.
- A step parent, relative such as grandparents etc.
- A person who has consent of all those with parental responsibility.
- Any person with leave of the court.
The Court will only make an order if it is in the interests of the child and will consider the following Welfare Checklist criteria when deciding what order to make:
- The ascertainable wishes and feelings of the child concerned (considered in the light of his/her age and understanding);
- His/her physical, emotional and educational needs;
- The likely effect on him/her of any change in his circumstances;
- His/her age, sex, background and any characteristics of the child which the Court considers relevant;
- Any harm which he/she has suffered or is at risk of suffering;
- How capable each of his/her parents, and any other person in relation to whom the Court considers the question to be relevant, is of meeting his/her needs;
- The range of powers available to the Court under the Children Act 1989 in the proceedings in question.
If the Court considers that the welfare of the child is at risk, it could order a CAFCASS report. A CAFCASS officer will prepare the report and give recommendations as to what is in the child’s best interests. From the time of issuing proceedings until the final hearing the matter could take between 6 to 8 months to be resolved.
If the location of a child is not known an application can be made to the Court seeking an Order compelling a person or organisations such the NHS or Inland Revenue to disclose the address.