There is no legal requirement to instruct a Solicitor to act on your behalf in respect of Divorce proceedings.
However, for reasons set out below, particularly in respect of the finances of a marriage, it is important that legal advice is sought as early as possible which is tailored to your own personal circumstances to ensure you are clear in respect of your rights and legal duties.
Can I get a divorce online?
In recent years the Court has launched an online portal that enables parties to deal with their own Divorce proceedings online. This has made it far easier, and indeed quicker, for the Divorce proceedings to progress. It is therefore now far more straightforward to issue your own Divorce proceedings through the Court service website, without the assistance of a Solicitor.
The New No Fault Divorce Law (April 2022)
The Court’s streamlined online process works for many and particularly with the imminent ‘no fault’ Divorce coming into force in April 2022, it is expected that the process will likely be even more accessible to those not wishing to instruct a Solicitor in respect of the divorce element of formalising their separation.
Pros of a solicitor with a No Fault Divorce
It is however important to keep in mind that a Solicitor who is experienced in the Divorce process will be able to deal with matters far more efficiently and quickly than one who is completing the process for the first time and during a time where they are dealing with the emotional impact of a separation.
At Mayo Wynne Baxter, we always encourage clients to look into the Court portal and Divorce process themselves in the first instance when deciding whether they feel they require assistance from a Solicitor to deal with matters on their behalf.
What the new law means for separating spouses
The new ‘no fault’ Divorce law which is due to be implemented in April 2022 will provide a complete overhaul of the current system for obtaining a Divorce; however, it will not affect the finances of a marriage/civil partnership. It will therefore remain just as important to obtain advice in respect of your rights and legal obligations concerning the finances of the marriage.
Protecting your Finances
Whilst the Divorce process is straightforward and can be undertaken by parties acting ‘in person’, simply obtaining your Decree Absolute (soon to be known as a ‘Final Order’) to formally dissolve your marriage or civil partnership will not deal with the dismissal of your legal obligations to one another. It is therefore imperative that alongside any Divorce proceedings, whether it be now, or following the new law being implemented in April 2022, that the finances of the marriage are dealt with formally by way of a Consent Order, or Financial Remedy Order, to ensure that your respective financial claims against one another are formally reviewed and dismissed, if appropriate.
What is a Consent Order/Financial Remedy Order?
A Consent Order/Financial Remedy Order is a document that requires careful consideration and needs to be carefully drafted in order to be tailored to your specific circumstances and ensure it meets with your understanding of any agreements reached. The Court’s online portal cannot assist with the drafting of such a document, and it is important that the Consent order is tailored to your specific circumstances. Where one has a limited budget, it is important to consider focussing that budget on obtaining advice in respect of your potential legal rights, and the drafting of a Consent Order.
Pros of a solicitor when obtaining Consent Order/Financial Remedy Order
It is always important to obtain legal advice in respect of the division of the finances of the marriage as there is no substitute for legal advice that is tailored to your own personal situation; an agreement appropriate in one set of circumstances will not be so for another.
Further, in England and Wales, we have a discretionary system, there is no prescriptive formula that can be used to determine the division of the financials of the marriage. A solicitor will provide advice which is tailored to your own personal circumstances and based upon their experience, taking into account precedents which have been set by recent cases and legislation. It is, therefore, useful to obtain legal advice at an early stage when considering the division of the finances, to ensure that you have a realistic understanding in respect of how your finances may be resolved.
Achieving an agreement with Mediation
Following the obtaining of initial advice many clients then choose to attend mediation with their spouse, in order to assist with negotiations. It can therefore be useful to have a Solicitor in the background to provide advice when required.
Once an agreement is reached it is important that a Solicitor drafts this on behalf of one party to ensure that it is drafted correctly and dismisses your respective claims where appropriate. Where the Consent Order has been drafted by your spouse or civil partner’s Solicitor it is important to obtain legal advice in respect of the content of that Order, to ensure that the Order reflects the agreements as you understand them to be.
At Mayo Wynne Baxter we have specialist Family Solicitors who will provide tailored advice based upon your requirements, whether it be an initial consultation with ad hoc advice whilst you are attempting mediation, or to assist you with undertaking negotiations directly with your spouse or civil partner.
To find out more about the services we can offer, please do contact our experienced Family team at Mayo Wynne Baxter by telephone on 0800 84 94 101.
How to help out your family with tax-free gifts
Ostentatious wealth is no longer appealing in times of pandemic and many people are looking into their families’ tax arrangements and how to pass on their assets within the family.
The easiest way to help children and other family members is via regular gifts out of income. This is efficient as inheritance tax (IHT) is not charged on gifts made from a person’s ‘excess income’, which is the extra income not required to maintain the person’s usual standard of living. There may be difficulties in proving that the gifts came out of the ‘excess income’ and the advice is to keep detailed records of your regular incomings and outgoings.
Parents can also pay school fees for the grandchildren on behalf of their adult children and these payments can be IHT exempt if they are regular and paid from the excess income. The gifts are also protected if the child divorces or becomes bankrupt.
If the school fees are paid from savings – i.e. not from excess income – the donor will have to survive the gift by seven years to reduce their IHT liability.
How much money is eligible for a tax-free gift?
Based on current rules, it is possible for the individuals to gift assets or cash up to £3,000 in a tax year which will not be included in their estate for IHT purposes at the date of their death. Gifts worth more than £3,000 are called potentially exempt transfers and may be subject to IHT if the donor dies within seven years from the date of the gift.
Parents can gift up to £5,000 to their children as a wedding gift and grandparents £2,500. Unlimited gifts of up to £250 are also allowed to as many people as you like.
Using a family trust to gift wealth
Using family trusts is an alternative to pass wealth down to younger generations, and there is a limit of £325,000 per individual – or £650,000 per couple – which can be ringfenced into a trust without triggering an immediate IHT charge. However, the taxation of trusts is complex and specialist tax advice must be sought before creating new trusts.
How much money should you give as a gift?
Finally, donors must be careful not to give away too much. Their income may have been reduced by the drop in dividend yields or pension funds reduced by the recent market downturn. Parents need to reassess what they need for themselves and not deprive themselves of assets. A word of warning is to only gift what you can afford to lose forever as if you make a gift and take some benefit back – i.e. gift of a property to children but the parent is expecting some income back – then for IHT purposes, this will be treated as if the parent had never made the gift and can lead to tax penalties.
I am an optimist. One of the good things that has come out of this pandemic is probably that people have spent more time together and have focussed their minds on their families’ circumstances, valuable personal relationships, wishing to look after each other. We have seen endless mortality stats and excess deaths, which has probably created the perfect opportunity to revisit issues like transfer of wealth and discuss some fundamental questions.
Our Probate Trusts and Wills team at Mayo Wynne Baxter is here to discuss probate and inheritance tax advice and if you have any questions, please do not hesitate to contact us here.
Civil Partnerships vs Marriage
A Civil Partnership is an alternative way of registering a relationship between two people who are not related to one another. The legal provisions of Civil Partnerships are set out in the Civil Partnership Act 2004. Civil Partnership offers a secular alternative to marriage, although it is possible to have a separate religious ceremony performed after the Civil Partnership is registered. The Marriage (Same-Sex Couples) Act 2013 enables Civil Partners to convert their Civil Partnership into a marriage if they wish.
Following the Supreme Court case brought by Rebecca Steinfeld and Charles Keidan in June 2018, a legal ruling was made allowing Civil Partnerships to apply to both same-sex couples and to opposite-sex couples.
The eligibility to marry or form a Civil Partnership is identical for both same and opposite-sex couples. Both people must be over 16 (with parental consent if under 18), they must not already be married or in a Civil Partnership, and must not be closely related.
Civil Partners cannot, however, refer to themselves as being married. In the same way as a couple wishing to marry, partners must give notice within the local authority where they live 29 days before the formation of the Civil Partnership. Certain religious groups will agree to their premises being used for the registration of Civil Partnerships, but not all, so it is worth checking this before deciding your venue.
A valid opposite-sex marriage formed in the UK will be recognised abroad. However, it is always best to check if your same-sex or opposite-sex Civil Partnership will affect any rights you may have if you move to live overseas.
There are some differences between Civil Partnerships and marriages when it comes to divorce or dissolution. Currently, a divorce or dissolution is obtained by relying on certain facts to prove that Civil Partnership or marriage has broken down irretrievably.
In the case of marriage, there are five facts, which are adultery where the applicant finds it intolerable to live with the respondent, unreasonable behaviour by the respondent, desertion for 2 years, separation for 2 years with the consent of the respondent and separation for 5 years.
To obtain a dissolution of a Civil Partnership, the facts that can be relied upon are the same as for marriage, except for adultery, which is not available.
Civil Partnerships and Tax
Civil Partners are entitled to the same exemptions as married couples in relation to Inheritance Tax, Capital Gains Tax, Social Security Benefits and pension benefits. Civil Partners are also recognised equally with married couples in relation to life insurance. Civil Partners can also be entitled to automatically inherit their partner’s assets, including their pension.
Couples who decide to cohabit, without a legally binding, recognised relationship status, will forego these financial benefits.
What are my rights in the UK?
Civil Partners are entitled to the same property rights as married couples in the UK. On dissolution of the Civil Partnership, they are entitled to the same financial remedy Orders in relation to sale or transfer of properties, pension sharing, and maintenance.
Civil Partners also automatically acquire Parental Responsibility for their children by virtue of their Civil Partnership. Civil Partners can apply for orders under the Children Act 1989 in relation to the arrangements for the children where there is disagreement on the breakdown of the relationship. Civil Partners can also apply for financial provision for the children under Schedule 1 of the Children Act 1989. These rights are identical to those of married couples.
As can be seen, entering into a Civil Partnership will provide you with benefits, both financial and otherwise, akin to being married.
If you have any questions or would like to obtain advice about your position, the Family Team would be happy to hear from you.
When a person dies without a Will, the law states who will inherit. This law is known as the rules of intestacy. The law is the same for everyone, and there is a strict order of priority for inheritance, which broadly follows the family line. It does not take into account individual family circumstances and cannot be changed without the agreement of the beneficiaries who inherit. It is essential to prepare a family tree when dealing with the estate of a person who has died without a Will, to make sure that the estate is distributed correctly. Although this is a brief introduction to the order of priority and inheritance, the rules of intestacy can be complicated and should consider taking legal advice before dealing with the administration of the estate.
Married couples
Where one half of a married couple dies, the surviving spouse will inherit from their estate. What they inherit depends on the size and nature of the estate, and whether the deceased also had any children.
Where the deceased had no children, the survivor will broadly inherit all the deceased’s assets, subject to some exceptions, such as joint property owned with another person.
Where the deceased had a spouse and children, if the value of the estate is under £270,000, the surviving spouse will inherit the entire estate. If over £270,000, the assets will be split between the surviving spouse and the children. The surviving spouse will receive the first £270,000 in the estate, as well as all the deceased’s personal possessions. Anything left over will be divided into two. The spouse will take half, and the deceased’s children will inherit half.
Children
Where the deceased had no surviving spouse but did have children, the children will inherit their parent’s estate equally. If any of them have died before the deceased, leaving children of their own, those children will inherit in their parent’s place.
Remoter relatives
If someone dies without a spouse or children, their wider family will inherit. In priority order, their parents, siblings, nieces and nephews, grandparents, aunts and uncles or cousins will inherit. If there is more than one person in the class (i.e. if the deceased had two surviving parents), they inherit equally. If they leave no surviving family, the estate passes to the Crown. Friends and loved ones who are not blood relatives do not inherit. Once someone from the class has been identified, it is not necessary to look any further, so if the deceased’s parents survive them, they inherit the entire estate, and the inheritance does not filter down the list.
Cohabiting couples
Unfortunately, the intestacy rules do not provide for couples who are not married, no matter how long they have been together. If your partner has died and you were not married, you will not inherit their estate under the intestacy rules. The exception to this rule is joint property, for example, a house or bank account in both names, which may pass to the survivor. It is important, if you are in this situation, that you take legal advice as we will be able to advise you of your rights and entitlements.
We know that every family is different, and the rules of intestacy can seem unfair. If you do not have a Will, it is important to make one, to ensure that your estate is distributed in accordance with your wishes. If you know someone who has died without a Will and the intestacy rules does not result in an adequate provision for their loved ones or dependents, we may also be able to help you.