Working out the financial settlement in a divorce is often one of the most complicated and difficult areas of the whole process. If you cannot agree on how your finances should be separated, you can turn to the court to settle the matter for you.
Jane Hodge, Partner and Head of Family Law at our Chichester office, explains how it works and the options available.
Where possible, the court will look to achieve a financial ‘clean break’ after the divorce, leaving no ongoing financial obligations between you and your spouse.
However, where a financial gap between you cannot be balanced by transferring capital or assets, known as off-setting, the court may consider making an order for ‘spousal maintenance’.
What is Spousal Maintenance?
Spousal Maintenance is maintenance that is paid by a husband or a wife to their former spouse following a divorce. It is different to child maintenance.
Spousal maintenance arises where one party’s income or assets are insufficient to meet their day to day needs. One party to the marriage may have a much lower income than the other, have a lower earning capacity or have not worked through some or all of the marriage and are unable immediately to become self-sufficient.
“Needs” are based on a number of factors and each case is looked at individually. However, the Court’s first consideration is to ensure the welfare of any minor children.
How is it calculated?
The court will look at the information given in your financial statements to consider each person’s day to day commitments, including child maintenance and how you will meet your reasonable living expenses.
There is no set formula for the calculation of spousal maintenance unlike child maintenance.
When determining whether spousal maintenance should be paid, how much should be paid and the length of time for which it will be paid, the court has regard to the overall circumstances.
Deciding the amount of spousal maintenance can be difficult though the lack of clear guidance given by the court rules. Having good legal advice is essential in this difficult and emotional area.
If spousal maintenance order is made, either by the court or by consent, will obligate one of you to pay a regular sum of money to the other for the duration of the order and can only be changed by agreement or by further court order.
There are a number of options available on how to proceed with a spousal maintenance order. The type of order and how it is implemented is based on your very individual circumstances. Here at Anderson Rowntree, our expert Family Law team has many years of experience working through what is most appropriate to meet you and your family's needs.
Can payments change?
If either of your circumstances changes during the course of a maintenance order, you can apply to the Court for a variation of the order.
The order can also be changed if, in the future, you agree to accept or pay a capital lump sum instead of ongoing maintenance.
What happens if payments stop?
If the payments are not kept up, you will be in breach of the maintenance order, which may have serious consequences. If you are having difficulty in keeping up your payments, you should seek professional advice about reducing or terminating the payments by making an application to the court.
If you are meant to be in receipt of maintenance and the payments have fallen into arrears, you will need expert advice on how to enforce the maintenance payments and what action should or could be taken. Even if the payer is now abroad, there are reciprocal arrangements between most countries to enforce maintenance orders.
Spousal maintenance does not automatically end on cohabitation of the recipient, although some Court orders provide for this. Cohabitation is much more uncertain than marriage and cohabitants do not have the same financial claims against one another in the event of relationship breakdown.
Whilst maintenance will not automatically end, when a party receiving maintenance begins to cohabit it may be appropriate for the level of maintenance to be looked at in the light of the new circumstances and you should take specialist legal advice if this is the case.
Get Specialist Advice
With the introduction of various alternative dispute resolution tools such as Mediation, Arbitration and Collaboration, the role of the Family Lawyer is constantly evolving. Add to the skills list, counsellor, psychologist and tea maker, it is as important now as ever to find the right approach for the client and to use the correct tool available for the case.
Jane has expertise in all types of case, from limited asset to high net worth divorce cases, including those involving business and immigration issues and is a Resolution accredited specialist in complex financial remedies and domestic abuse. As the former Chair of Forces Law, an organisation dedicated to providing specialist legal advice to the armed forces, she can advise on divorce matters for military personnel.
For a confidential discussion about your situation, contact Jane on 01243 787899 or email firstname.lastname@example.org