Published: 12 July 2016
The Family Justice Council have published a new report entitled 'Guidance on 'Financial Needs' on Divorce', which follows on from their guidance for Litigants in Person (as reported in a previous blog) entitled 'Sorting Out Finances on Divorce'. This new guidance comes as a response to a recommendation by the Law Commission in their 'Matrimonial Property, Needs and Agreements'consultation published in February 2014.
The aim of this guidance is to establish and clarify the meaning of ‘financial needs’ on divorce, particularly in regards to common cases where available assets do not exceed the needs of the party. The guidance will also include a statement of the objectives that any financial orders made should achieve, thus providing some consistency for the courts in England and Wales.
The guidance goes on to outline exactly what these needs are and how they are measured, for example, in most cases the main needs are for housing but also current and future earnings. A need for retirement finances typically comes from future earnings. The report also highlights the following:
The report also highlights that the court will aim to make the most of any limited resources and in such cases, the needs of children will be the first priority. The children's standard of living will be assessed to determine their needs and, where possible, the court will try to maximise the available resources to allow them to be provided with a home with each parent.
Other factors in the report include:
The guidance states that the court will asses both parties’ financial needs and that the court will ensure that the payer’s financial resources are fairly distributed to the payee. It also includes information on dealing with difficult issues such as the 'duration of provision' for needs and how to plan for the transition to financial independence. It states that:
Throughout the guidance, it refers to leading case law and includes passages of essential reading of the relevant judgements. The guidance itself was not intended to try to change the law, its purpose is to provide information on the ways in which the court’s judgement is applied and to promote a consistent use of that application, whilst addressing the Law Commission's concerns about consistency in this particular area of the law, eradicating any regional differences and ensuring transparency for the courts across England and Wales.
The full Guidance on 'Financial Needs' on Divorce report is available to view online here.
If you are thinking about divorce or separation then K J Smith Solicitors are here to help. Our team of family law specialists work with you to deliver practical solutions and the most positive outcome possible. For more information or to arrange a free 45 minute consultation, please contact K J Smith Solicitors today on 01491 630000 (Henley on Thames), 020 7070 0330 (London), 0118 418 1000 (Reading), 01753 325000 (Windsor), 01256 584000 (Basingstoke) or 01483 370100 (Guildford).