When you marry or begin a civil partnership, there are steps you can take which protect your interests in the unfortunate event of a separation and eventual divorce. It is important to seek advice from an experienced family law solicitor who will be able to guide you through the process and put your mind at ease. We have prepared this handy guide to highlight some important things to consider, if you wish to ensure your position is protected should the worst happen.
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When a married couple or those in a civil partnership separate, you can try to agree on how the matrimonial or partnership property is to be divided between you and your spouse or civil partner before you apply for a divorce or dissolution of your civil partnership.
If a negotiated agreement can be reached on the division of the matrimonial property or partnership property arrangements are usually formalised by way of a Minute of Agreement which is registered with the Keeper of the Books in Council & Session. The Minute of Agreement is an important document and has legally binding implications upon signature. It is intended to regulate the arrangements which have been agreed between parties to allow parties to achieve a fair division of matrimonial or partnership assets and liabilities and can also record details of the care arrangements for any children of the marriage or civil partnership.
The financial issues arising from the separation and the care arrangements for any children of the marriage under the age of 16 years must be resolved before a divorce is granted.
Steps you can take to protect your interests before you marry or enter into a civil partnership
Before you marry or enter into a civil partnership you can agree in advance how your property would be divided if you separate. This is called a Prenuptial Agreement if you are married or a Prepartnership Agreement if you are civil partners.
Even after you are married or have become civil partners you can agree what will happen to your property if you separate by way of a Postnuptial Agreement if married or a Postpartnership Agreement if you are civil partners. It is important when entering into these types of agreements that each party fully discloses to the other the extent of their property and each party should receive separate legal advice.
You should also consider making a Will and having a Power of Attorney (which we can help you with at Scullion LAW) as these will assist you in ensuring that your wishes are followed in the event of your death or you becoming incapacitated and unable to make decisions for yourself. More information about these services can be found on our website.
If you and your partner are purchasing a property together you need to consider how the title will be held by each of you. A decision will need to be made on whether the title is taken by each of you equally and whether you wish your partner to inherit your share of the property if you die. This is known as a “survivorship destination”. A “survivorship destination” supersedes a Will and a Minute of Agreement so this needs to be carefully considered.
What happens if you don’t have a Prenuptial/Prepartnership or Post nuptial/Postpartnership Agreement?
How will the matrimonial property or partnership property be divided?
The starting point is that the matrimonial or partnership property should be divided fairly between the parties (s.9(1)(a) of the Family Law (Scotland) Act 1985). Fairly usually means equally. Matrimonial property or partnership property is all of the property that has been acquired by you and your spouse or civil partner between the date of marriage or civil partnership and the date of separation.
The date of separation is important because this is the point at which a “snapshot” of your finances is taken. All matrimonial or partnership assets and liabilities in each of your names and in joint names are valued as at that date and this forms the matrimonial or partnership pot which is to be divided between you.
All of the assets and liabilities acquired after the date of separation are excluded from the matrimonial or partnership pot.
Any assets acquired by you or your spouse or civil partner prior to the marriage, do not form part of the matrimonial or partnership property There are however some exceptions to this rule, for example, if a property is purchased by you or your spouse or civil partner prior to the date of marriage or civil partnership for the two of you to live in together as a family home. Furthermore, if you entered into a Prenuptial or Prepartnership Agreement prior to the marriage or civil partnership, then the terms of this Agreement will usually be taken into consideration when negotiating a division of the matrimonial or partnership property.
An inheritance or gift received by one of you during the course of the marriage is not considered to be matrimonial or partnership property (unless the gifts are between you) and should therefore be excluded from any financial settlement that is reached However, if the inheritance is used to purchase a new item of property during the period of marriage or civil partnership then it will become matrimonial or partnership property. Where this happens we can look at a “special circumstances” argument (see below) to reflect this in the overall division.
Once you have instructed us we will ask you to provide information regarding the value of the matrimonial or partnership assets and liabilities held in your name as at the date of separation. This will allow us to build up a picture of the matrimonial or partnership property and guide you as to what a fair and reasonable settlement might look like.
We will ask your spouse or civil partner to disclose information regarding the value of the matrimonial or partnership assets and liabilities held in their name at the date of separation. If they refuse to engage with us, then you will need to raise Court proceedings and may have to then ask the Court to order the disclosure of this information from banks, pension providers and credit card companies on your spouse or civil partner’s behalf. If you don’t want to do that, then you can enter into a settlement with your spouse or civil partner in the absence of full information regarding the extent of the matrimonial or partnership property. However, we cannot confirm that such a settlement is fair or reasonable.
Not equal sharing?
In some cases, equal sharing is not appropriate. This is because decisions made during the course of a relationship can have an ongoing economic impact after the relationship has ended. There may be a “special circumstances” argument (s.10(6) of the Family Law (Scotland) Act 1985) to justify a departure from an equal division of the matrimonial or partnership property.
An argument could be put forward on behalf of a husband who used money from his savings account to purchase a property at the outset of the marriage. It could be successfully argued that this money should be returned to the husband as part of the financial settlement as it was saved by him alone over many years and could not be said to be derived from the income and efforts of the parties to the marriage.
Fair account should be taken of any economic advantage derived by either person from contributions by the other, and of any economic disadvantage suffered by either person in the interests of the other person or the family (s.9(1)(b) of the Family Law (Scotland) Act 1985).
An argument could be put forward by a wife whose career prospects have been impacted by the gendered division of labour during the marriage. The wife may have had a professional qualification such as a University degree and could have been on a career path at the outset of the relationship, but fell pregnant and put her career aspirations to one side to raise a family. The husband in this example may also have entered the relationship with a professional qualification and continued to work throughout the marriage, allowing him to gain experience in his chosen field of work, increase his earning capacity and acquire pensions and other benefits. If the relationship breaks down, then there will be an imbalance between the two parties that will need to be corrected. One way of correcting this imbalance is for the matrimonial or partnership property to be divided unequally, with the disadvantaged party receiving a larger share.
There should be a fair sharing of the economic burden of child care (s.9(1)(c) of the Family Law (Scotland) Act 1985).
If one parent will be responsible for the day-to-day care and upbringing of the children of the marriage then an unequal sharing needs to be considered. If the other parent is fulfilling his or her child maintenance obligations, then this may limit the scope for any potential claim under s.9(1)(c). However, there will be cases in which it will be appropriate to look at this in further detail, for example, where there is no reasonable prospect of the other party meeting his or her child maintenance obligations or if the child maintenance payments are insufficient to meet the needs of a particular child. An argument could be put forward by a parent who is responsible for a disabled child. This parent may wish to continue to live in the matrimonial or family home with the child as this property may have been adapted to cater for the child’s disabilities. This parent may combine his or her caring responsibilities with part-time employment and could be earning an income. However, they might not be earning enough money to take over responsibility for the mortgage. They may require a property transfer order to allow them to continue to live in the matrimonial or family home with the child and an order for payment of funds and ongoing financial support to allow them to meet the cost of the household expenditure including the mortgage. The value of these orders may well exceed the value of a one-half share of the matrimonial or partnership property. However, they may be justified so as to enable a parent to provide the proper care for a disabled child of the marriage.
A person who has been financially dependent to a substantial degree on another person should be awarded such financial provision as is reasonable to allow him or her to adjust to loss of that support on divorce for a period of not more than three years. This can result in ongoing financial support after the Divorce called a periodical allowance (s.9(1)(d) of the Family Law (Scotland) Act 1985).
If a wife or civil partner who assumed the role of the carer and homemaker throughout a marriage or civil partnership spanning many decades while her husband or civil partner assumed the role of the provider and earned an income from paid employment. The wife or civil partner in this example will have acquired very little in the way of assets, pensions and benefits compared to her husband. It will be difficult for them to earn an income and support themselves now that the marriage or civil partnership has broken down. They are not going to be an attractive candidate to a prospective employer. They may be older and may not have an established employed history. It is going to take time for them to carve some financial independence for themselves. They will need to be supported during this time. If an award is made under s.9(1)(b) then her husband or civil partner will be expected to provide transitional support for a period of not more than three years. This support may take the form of a property transfer order, an order for payment of a sum of money, or an order for payment of a periodical allowance. The expectation is that the person receiving this support should make the most of their time during this transitional period and either learn a new skill to allow them to join the workforce or else acquire financial independence in some other way.
A person who seems likely to suffer serious financial hardship as a result of the divorce should be awarded such financial provision as is reasonable to relieve this hardship (s.9(1)(e) of the Family Law (Scotland) Act 1985)
A husband or civil partner with ailing health who is approaching retirement age and relies on their high-earning younger wife or civil partner to fund their lifestyle is not going to be able to carve out financial independence for themselves through paid employment. Their ability to do that will be impeded by the various health conditions that they suffers from and by their advanced age. In the absence of financial support from, it is likely that their standard of living will plummet on divorce resulting in serious financial hardship. If an award is made under s.9(1)(e) then their wife or civil partner will be expected to provide support. This support may take the form of a property transfer order, an order for payment of a sum of money, or an order for payment of periodical allowance. An order for periodical allowance under s.9(1)(d) is limited in duration to three years, whereas an order for periodical allowance under s.9(1)(e) can be of unlimited duration.
The legal principles guide the Court and us in decision-making and providing you with advice. However, each individual case is unique.
This article was prepared in collaboration with Samantha Robertson, Family Law Paralegal and Laura Cousins, Trainee Solicitor. Please contact us if you are affected by any of these issues on 0141 374 2121 or email@example.com . Our Family Law Team are here to help.
The content of this article is for information only and is not intended to be construed as legal advice and should not be treated as a substitute for specific advice. Scullion LAW accepts no responsibility for the content of any third party website to which this article refers.
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