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As a society we are keen to protect
ourselves from the detrimental effect
of unexpected adversity through the
mechanism of insurance – some of
which is mandatory, such as car
insurance, but otherwise is a personal
choice based on risk aversion.
When two people contractually join their lives,
whether by marriage or entering into a civil
partnership, they can be exposing themselves to the
greatest financial risk of their lives if, sadly, it all
goes wrong.
The Family Court has an absolute discretion to solve
financial matters between a separating couple, based
on a very vague set of guidelines derived in part from
Section 25 of the Matrimonial Causes Act 1973, and
also from subsequent case law.
The starting point for division of capital is equality –
but there will be a departure from equality if ‘need’
suggests that to be appropriate. ‘Contribution’ may be
seen as a secondary issue and is often irrelevant.
Provision of income after separation is also dictated by
‘need’. How generously ‘need’ should be interpreted can
become a real issue.
As house prices continue to rise more steeply than
average salaries, properties are often purchased with
financial assistance from couples’ respective families,
invariably in unequal proportions and perhaps only from
one side. As couples formpermanent relationships later in
life, it is not unusual for one to have accumulated
significant wealth beforehand. Alternatively, one may have
a significantly greater earning capacity than the other.
By entering into a prenuptial agreement the couple
can seek to regulate any financial outcome upon
separation, ensuring that they are not vulnerable to any
uncertain and unsatisfactory outcome which current
legal guidelines might impose.
Since the decision in the case of
Grantino v
Radmacher
, the court has sought to uphold both pre
and post nuptial agreements – even if the terms of the
agreement may be entirely different to the outcome
which the Family Court might deem appropriate.
To achieve desired protection from such an agreement,
a number of guidelines must be followed, including:
• The agreement should be signed at least 21 clear
days before the ceremony.
• Both members of the couple must have had
independent legal advice about their rights on
relationship breakdown.
• Full disclosure of the financial circumstances of each
of the couple must be provided, with supporting
documentation as requested.
To ensure that an agreement will be upheld, ‘need’ must
be taken into account, ensuring that neither person
leaves the relationship without their reasonable ‘need’
being provided for, in the context of the overall financial
provision of the couple.
In circumstances where the couple simply decides to
co-habit, a Cohabitation Agreement might be entered
into to similarly provide certainty of division of assets on
separation.
As government cutbacks place increasing strain on
the court system, most agreements entered into by
couples will provide for them in the event of a dispute.
The process of mediation, or (if agreement is impossible
and a decision needs to be taken by a third party)
arbitration, must be used as a means of resolution.
Settlement out of court by these dispute resolution
methods keeps costs to a minimum and maintains
communication after separation which, particularly
where children are involved, can be absolutely vital.
For further information regarding agreements,
mediation or arbitration contact KarinWalker at KGW
Family Law on 01483 375788 or visit
www.kgwfamilylaw.com
pink weddings magazine 37
Family law
If the unthinkable happens and your relationship
breaks down, at least you should be prepared.
Lawyer
Karin Walker
gives her advice
To have and
to hold