Divorce Planning

Thomas Duggins, solicitor in the family office at Charles Russell, explains how the correct advice can minimise the financial and emotional stress of a divorce.

Along with moving house and bereavement, divorce is one of the most stressful experiences faced by adults in the 21st Century. In particular, wrestling over shared financial assets and possessions amassed over many years can be emotionally draining for the couple involved.

There is no set formula for redistribution of assets or income on divorce and the courts are at leave to use their own discretion, with reference to case law and statutory criteria.

When considering whether a maintenance order is appropriate, the courts will consider the parties' respective financial needs, the contribution they have made to the other parties' income and whether one party (generally the wife) has sacrificed their career to raise children.

Other variables will be the longevity of the marriage and whether there are children involved. If the parties are older and have limited earning capacities, maintenance may last for the remainder of the recipient's life.

Maintaining maintenance

In most cases, spousal maintenance is a recipient's only source of income and they will be reliant on it to meet regular outgoings. Payments must therefore continue in the event that the paying party dies.

This can be achieved in a number of different ways. For example, the paying party can formally undertake to change their will, so that a portion of their estate on death is left to the recipient and/or the children. However, if at some point they subsequently change their will, in breach of the order, it may not become apparent before they die, which will inevitably lead to litigation upon their death.

If the deceased has not made sufficient financial provision for their former spouse in their will, the recipient may be able to make a claim against the deceased's estate under The Inheritance (Provision for Family and Dependents) Act 1975.

Under this Act, certain classes of people (which include former husbands or wives, provided they have not remarried) are able to make a claim against the estate of the deceased if they were financially dependent on them at the time of death.

The deceased must have been domiciled in England or Wales at the date of death.

A successful application will also require the deceased's estate to have sufficient capital to release ongoing financial commitments. However, if the remaining...