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Wilson Browne discusses… Separation

Reasons to choose Wilson Browne

I’m separating from my spouse, what do I need to consider?

Our team of Solicitors discuss the essential considerations when separating.

Jess Leech (Family Solicitor) says

If you are separating from your partner and are not married, the first thing to note is that unmarried couples do not have the same financial claims as married couples.  There is no principle of ‘common law marriage’ irrespective of the length of your relationship which is often erroneously relied upon.

You may consider preparing a Separation Agreement which is a document setting out the practical arrangements you and your former partner have agreed regarding money, property and childcare as a result of your separation.  It can include things such as how much each of you will contribute towards rent, mortgage or household bills until you can vacate, sell or transfer your home, how to discharge any mutual debt, how to deal with any proceeds from the sale of a property, how to deal with any joint accounts (i.e., should they be closed or transferred into one party’s name), what will happen to family pets and arrangements for the children.

If there is a dispute regarding a jointly owned property, you may need to consider taking legal advice if it cannot be agreed how the equity should be divided between you both. These matters are dealt with under the Trust of Land and Appointment of Trustees Act 1996 (TOLATA 1996) which, despite being a civil claim, is dealt with by the Family Team at Wilson Browne Solicitors.

In the alternative, if you are married and are separating, you will need to consider how the matrimonial finances are to be separated between you both.  It should be noted that the divorce process and the separation of your finances are entirely separate, albeit often run simultaneously.  To reach the end of the divorce process, which is now taking place largely via an online court portal, does not sever the financial ties between you both.

The only way to sever the financial ties between you both absolutely (and to prevent any further financial claims in the future) is by obtaining a Financial Remedy Order from the court.  This does not necessarily mean attending a court hearing, as, if an agreement can be reached amicably, a Consent Order will be prepared reflecting the terms agreed between you both and submitted to the court for approval, considered behind closed doors.

The starting point of a division of matrimonial assets is to divide those equally between you both however the court considers a range of factors as set out under s.25 of the Matrimonial Causes Act 1973 as to whether to deviate from that starting point of equality. Those factors include, but are not limited to, the age of the parties, contributions of the parties, needs of the parties and the resources of the parties.  This is not an exhaustive list but provides an indication.

The court has the power to make a number of Orders including, but not limited to, Lump Sum Orders whereby one party transfers a lump sum payment to the other, usually simultaneous to an event such as the transfer of a property, the sale of the matrimonial home, spousal maintenance and Pension Sharing Orders.  Our recommendation is that this process is started as soon as possible to prevent any unnecessary complications such as a party acquiring significant assets post-separation.

It is our absolute recommendation that a Financial Order is obtained from the court to sever your financial ties and provide a clean break.  Failure to do so could see a party make a claim against the other’s inheritance, lottery wins or significant accrual of assets after an indefinite time following the conclusion of divorce proceedings, irrespective of whether an agreement was reached amicably between the parties, yet not recorded in a Court Order.

Kayleigh Brown (Wills and Probate Solicitor) says

If you are separating from your spouse but not going down the formal route of divorce, it is imperative that you arrange to have a Will prepared as soon as practicable. If you were to pass away and you were still married, then the statutory Rules of Intestacy would apply. Depending on the value of your Estate, your spouse could inherit everything and potentially exclude the people you would perhaps wish to benefit following your separation. If you already have a Will in place, it may be that it currently benefits your spouse absolutely and so it would be wise to arrange to have your Will changed to benefit others.

It may also be worth considering how you hold any property that you own with your spouse. There are two ways of holding the beneficial title to your property, namely holding as “Joint Tenants” and as “Tenants in Common”. If you hold as Joint Tenants and you were to pass away, your share in the property would automatically pass to your spouse in accordance with the Rules of Survivorship. If you hold as Tenants in Common, then your share in the property would pass in accordance with your Will or the Rules of Intestacy. You can change the way you hold the property, by way of “severance” which essentially changes the ownership from Joint Tenants to Tenants in Common, so that your share passes as per your new wishes following your separation.

When considering a change in your Will, it is worth considering whether there are any potential claims that your spouse may have against your Estate. Do you maintain your spouse financially (which can include living together, as a Court would not be keen on allowing an individual to become homeless on your death)? If you do, it may be worth granting your spouse a right to continue to live in the property by way of Trust, and then once the property is no longer being occupied, the capital value of the same could be routed to your preferred beneficiaries. It is also worth arranging an independent capacity assessment to prove that you have the relevant capacity to make or change your Will, in an effort to minimise any risk concerning any potential claims against your Estate.

Vicki Pearce (Court of Protection Solicitor) says

Divorce or separation will not automatically end the appointment of attorney’s under any power of attorney you have made.  You should consider revoking any appointment.

If you don’t have a power of attorney in place, any health authorities may have your spouse on record as your next of kin and seek to consult with them in the event of an accident or illness.  You should make sure you update all your medical records to ensure the person of your choice is contacted and consider making a power of attorney to give authority to the person or people you most trust to make decisions for you if you are not able to make themselves.  On a separation this might be obvious to the outside world given your change of circumstances but a power of attorney makes this clear.

If you have any joint bank accounts you should consider closing these at the earliest time.

Consider your business interests could you have a business power of attorney in place to meet the needs of your business if something were to happen to you?

 

Jenny Woodruff (Residential Conveyancing Solicitor) says

Depending upon the terms of the separation, it may be agreed that the property will be sold or transferred to one party.

If the property is to be sold, in normal circumstances, both parties will need to instruct the conveyancer dealing with the sale. The sale proceeds will be split according to the agreement made between the parties.

If the property is being transferred to the other, the first point of call is usually the existing mortgage lender (if applicable) to obtain confirmation that they are agreeable to the transfer. They will need to consent. The remaining party may consider a simultaneous re-mortgage.

Stamp duty is not usually payable for a transfer of property following a formal separation, but this may apply, depending upon the circumstances of the individual case.

 

You can watch the video of their discussion by clicking here