As more people of retirement age divorce than any other age group, this blog discusses the issues they face and the concerns they have when the assets are not enough to rehouse them both. It also serves as a forewarning about how much reliance one should place on the ‘indication’ of the Judge given at the financial dispute resolution hearing (FDR).
The Family Court recently ruled in a case we were dealing with that following a long marriage of over 40 years the wife could remain living in the family home that she jointly owns with her ex-husband for life despite the property being the only asset of the marriage and both parties nearing retirement age. At the FDR the indication from the Judge was that the property should be sold and the wife re-house in rented accommodation. The Husband was already living with his new partner in her property.
The background to the case was that he husband and wife married in the 1970’s. They bought a home together and during their marriage had four children who were now adult. The husband had an affair and subsequently left the marriage to live with his new partner in her property. Approximately 7 years later he issued a petition for divorce and the court granted a decree absolute in 2013. This was therefore a long marriage of over 40 years. The Husband then issued an application for financial relief for the former matrimonial home to be sold and for him to receive 50% of the sale proceeds.
The division of the finances remained to be determined.. There was no mortgage outstanding on the former matrimonial home and its value was not enough to purchase a property without mortgage for both parties as the value was £100k. Both parties had state pensions only..
Maybe this sounds familiar to you. The Wife was worried that her home would be sold and that she would have nowhere to live save for rented accommodation which was not secure . This was certainly our client’s fear.
Before the final hearing the parties attended for an FDR (Financial Dispute Resolution) hearing. The purpose of this hearing is for the Judge to give indication as to what they would award to each party at a final hearing if they were deciding the case, in order to assist the parties in their negotiations. and hopefully avoid the need for a final hearing. At that hearing the judge’s indication was that there would be an order for sale and that the wife would have to go into rented accommodation. Following that hearing our client was left not only worrying about where she was going to live, but also whether it would be worth her while fighting the case to a final hearing and the additional legal fees she would incur.
As a divorce solicitor and barrister Debra and I are familiar with the fact that the judge at the FDR simply gives an indication and that so often this indication varies considerably to what is finally ordered. We reminded our client that at the FDR the judge’s are often not in possession of all the facts and in any event they haven’t heard evidence from the witnesses or parties. The client decided to maintain her position and pursue the matter to a final hearing.
Debra and I reviewed the judge’s indication. It quickly became apparent to us that our client’s poor health and the effect that moving house would have upon her would be a central issue in the case. We advised our client to obtain medical evidence to this effect which she did.
As a rule of thumb the starting position when considering a division of assets post marriage is 50/50 and thereafter one looks for reasons to depart from this. What the husband was seeking was in line with the starting position. What our client was seeking was a life interest in the property and a 60/40 split of the sale proceeds (in essence a total right of occupation free from the husband for life and an interest free loan from him of c£40k for life).
During the final hearing it was demonstrated that the husband’s housing needs were met, despite the fact that he did not have a legal interest in his new partner’s property and that that relationship could end at any time. In addition considerable weight was given to the wife’s poor health and the negative effects upon her of moving house. Following the judgement the judge made an order for sale but postponed it allowing the wife to remain in the former matrimonial home for life. In the event that the property was sold the proceeds were to be divided 60/40 in the wife’s favour.
The case usefully demonstrates the perils of putting too much weight on the indication at FDR especially in a situation where additional evidence should be obtained and where one party has a history of poor health. At the final hearing we were able to demonstrate that where there were no other available assets, where the husband was not in need of capital to provide accommodation for himself (although he wanted capital to subsidise his pension) and where any share in the equity of the former family home awarded to the wife would be insufficient to enable her to purchase alternative accommodation, the court should ensure, if possible, that each party should have somewhere to live as a prime consideration.
For the Husband in this case he was actually worse off following the final order as if he had not issued financial proceedings at all as he was awarded only 40% of the equity in the property and is not able to access this until the death of the Wife.
As a word of caution, for couples in retirement poor health is often an issue for one of the parties and can have a significant impact upon the final settlement and it is therefore prudent to speak to a specialist Divorce lawyer who deals with this type of case such as ourselves.