Inherited wealth by H during marriage - W with life shortening illness - clean break or not - needs.
This case attracted my attention because:-
- of the succinct way that the judge recites the law on financial remedy briefly citing circa 20 decided cases. Paragraphs 76 to 112 are worth reading if you want a quick revision course in financial remedy. I will not repeat much of them here, but on reflection it is the principal reason for alerting the reader to this case and
- it is not a mega money case.
The judge described the facts and balancing factors as:-
- H and W were married for 23 years. W is aged 54 and H 59. They have two children at university who stay with W during holidays, described as important to them.
- The bulk of assets (£3.2m) were inherited by H 5 years prior to separation, and the family home was valued at £450k. There were inheritance debts, and a legal services debt. Net assets were £2.6m. H’s earned income was minimal, W relied on the state and an income fund ceasing when she was 60.
- Shortly after separation in late 2018 (probably a month or two), W was diagnosed with a form of Alzheimers, shortening her life expectancy to between 5-10 years, thereby presenting medical and care needs; she was represented by a litigation friend. On separation W moved to rented accommodation and then into a cottage purchased in 2017 by H using inherited funds (thereby bringing that property into the ‘marital funds’ category).
Of immediate concern to the judge was that the difference between the parties offers was £450,000 and costs were £483,000, representing 18% of assets.
W sought £1.2m, ie £700,000 for housing and £500k for income needs, the judge accepting W’s evidence that she is not a big spender, is frugal and anxious about money.
Praise was given to counsel (as it always should be lol) ’They provided me with a single composite asset schedule, and a single chronology’.
Peel J referred to para 4.6 of PD27A, which should be of interest to local practitioners:-
Below High Court level:
a) The asset schedule should be in a single, composite document, - Peel J ‘which I take to mean that it must be so absent good reason’.
b) The preliminary documents at final hearing shall (which is synonymous with must) be in single, composite documents, and at other hearings shall be in such form so far as practicable.
The judge said ‘I would expect advocates to adhere rigorously to these requirements. It is unacceptable for the parties and their lawyers to ignore them. Compliance may be burdensome, but that is no excuse and is necessary in the interests of proper use of judicial and court time’.
The judge decided W needed £650k for housing and an income fund of £300,000, leaving it up to her how much she decided to spend on housing.
In considering a clean break Peel J uttered:-
‘I have carefully considered whether instead of a capitalised income fund of £300,000, I should order ongoing periodical payments. The superficial advantages would be (i) to enable the court to calibrate the level of payment depending upon care requirements and (ii) to avoid the risk of overpayment in the event that W, to put it bluntly, dies well before her expected life expectancy leaving a large part of the fund intact’.
‘I am quite satisfied that such an approach would be wrong in this case. A clean break is highly desirable. There is some tension between the parties, and I do not consider that W is strong enough to cope with the ongoing stress of financial and legal links. A periodical payments order could be subject to multiple applications to court because there are so many variables in care requirements; the expense and emotional toll would be heavy. There has been far too much litigation already and it would be inimical to W's health’.
Dealing with costs, although H had been ‘below par’ dealing with the litigation and tardy in making an offer, the judge decided no order on the basis that W’s costs had been largely paid by H by way of a legal services order and he had built that into calculations.
As I said in opening, the references to case law are worth glancing through and I found them refreshingly and concisely stated. I have a saying ‘If you can’t express yourself simply, you don’t know what you’re talking about’, with which you may or may not agree !
