Resolving the financial issues in divorce (8)

Divorce work about the financial issues arising from the marriage throws up certain problems sufficiently frequently to justify special mention:-

1.In these proceedings people often believe that the other side has hidden assets, bank accounts or whatever which have not been disclosed. Sometimes this is indeed the case – particularly with people who are self -employed or who work overseas – but much more often the belief comes from a feeling that there must be more. The sad fact, of course, is that when a couple split up and two homes have to be provided for in place of one the available assets do not stretch so far. Nevertheless, this belief that there are undisclosed assets is very common. Sometimes it is a misplaced belief and sometimes not.

What every litigant must understand, though, is that in divorce in England the courts will only act on evidence. If the assets cannot be found no court will treat them as existing and a court will ignore mere speculation. It is important to realise this because a party must assemble all the evidence to be ready at the date of the hearing. Afterwards it is usually too late. This must be explained to clients otherwise there is a risk they will come out of the divorce process feeling cheated. They must decide beforehand whether it is worth going to the expense, for example, of hiring a private investigator to try to find any undisclosed assets. If such enquiries fail to reveal the “crock of gold” then the client must accept that a court will ignore it. Evidence is everything in any litigation and courts can only act on the basis of the evidence before them.

Very often it comes down to deciding how much time, effort and expense one is prepared to spend on the issue. It is usually a trade off between cost and possible benefit.

2. More frequently in these applications there is evidence but the other side simply refuses to disclose it. This is a much easier problem to deal with. If, say, a wife knows that her husband has an account at X Building Society but her husband does not disclose this account in his Form E the first step is for her solicitor to write to the husband(‘s solicitors) asking him to confirm if he does or does not have an account at a certain Building Society. If there is such an account the overwhelming likelihood is that its existence will be revealed at this point (mainly because the holder of the account does not really know how much information is in the hands of “the other side” and is frightened of the consequences of being caught out).

The wife’s solicitor will then ask to see copies of the statements (or whatever) and the other side will probably grudgingly comply. If there is non-compliance the wife’s solicitor (in the above example) can seek an order from the court directing that the husband provide the information requested and such a direction (which can readily be obtained) will perhaps have endorsed upon it what is called a “penal notice”. This warns the recipient that if he does not comply he may be sent to prison. Naturally, most people do comply at this point but if the refusal continues the wife’s solicitor would almost certainly bring the matter back before the court and ask for imprisonment. This rarely happens in practice because the threat of imprisonment and the knowledge that it will happen if the refusal continues is almost always sufficient.

Please continue to find out more about problems which commonly arise when the financial issues are resolved in divorce.

Spouses involved in divorce in England always want to know on what basis the UK divorce law decides financial issues between husband and wife if the Courts have to decide the issue. Indeed, this is what is at the heart of most divorce cases. If there is a dispute it is more likely than not to be about money whether that is about periodical payments for a spouse, dividing the equity in the former matrimonial home or divorce and pensions. In fact, the relevant principles are set out in Section 25 of the Matrimonial Causes Act 1973 which, essentially, reads:-

”It shall be the duty of the court in deciding whether to exercise its powers ….. to have regard to all the circumstances of the cases, first consideration being given to the welfare while a minor of any child of the family who has not attained the age of eighteen.

25 (1) It shall be the duty of the court in deciding whether to exercise its powers …. to have regard to all the circumstances of the case including the following matters, that is to say –

(a) the income, earning capacity, property and other financial resources which each of the parties to the marriage has or is likely to have in the foreseeable future;

(b) the financial needs, obligations and responsibilities which each of the parties to the marriage has or is likely to have in the foreseeable future;

(c) the standard of living enjoyed by the family before the breakdown of the marriage;

(d) the age of each party to the marriage and the duration of the marriage;

(e) any physical or mental disability of either of the parties to the marriage;

(f) the contributions made by each of the parties to the welfare of the family, including any contribution made by looking after the home or caring for the family;

(g) …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;…”

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