General Overview of Matrimonial Cases
Upon the breakdown of a marriage, the majority of spouses will attempt to negotiate a financial settlement rather than proceed with a divorce action immediately. This financial settlement together with any issues relating to the children of the marriage (if any) will be embodied in a Minute of Agreement which is a binding legal document – please note that any Minute of Agreement entered into will be registered for preservation with the Books of Council and Session at the Registers of Scotland and will therefore become a public document.
In Scots Law, financial provisions on divorce are contained in the Family Law (Scotland) Act 1985 which was amended by the Family Law (Scotland) Act 2006 which came into force on 4th May 2006. The negotiations between solicitors for the spouses will follow the principles of these Acts, the basic principle being that matrimonial property should be shared fairly between the parties ie shared equally, unless there are specific circumstances which would justify an unequal division.
Matrimonial Property – this includes all assets owned by either or both spouses which were acquired during the marriage including heritable property, savings, investments, shares and even pensions to name but a few.
The parties will agree a date of separation and all assets will be valued at that date. Please note that only the value which has accrued during the course of the marriage will form part of the matrimonial assets ie the value accrued between the date of the marriage and the date of separation.
Please note that there can be tax implications where gains have been made on particular assets and whilst these may in the majority of cases be exempt we would recommend that you take tax advice from your accountants (or if you do not have an accountant we can recommend one to you) as tax advice is not part of this firm’s remit.
As part of your separation it may be that you have to sell/transfer insurance/investment policies. This firm cannot provide any financial services advice in relation to such sales/transfers and strongly recommends that you obtain independent financial services advice on whether surrendering/transferring the policy is in your best interests and what other alternative options may be available to you.
Matrimonial Home – this is now valued differently from all other assets as a result of the Family Law (Scotland) Act 2006. The matrimonial home must now be valued at an “appropriate date” which in the majority of cases will be a current valuation. This provision was made to avoid the unfairness in the 1985 Act whereby spouses may have been separated for several years, one party paying the mortgage and the other paying alternative accommodation costs with the spouse still occupying the matrimonial home benefiting from the capital appreciation in the property from the date of separation until the date of the eventual property transfer.
Often spouses take the title to the matrimonial home in “joint names and to the survivor” rather than just “equally between them” which means that upon the first death the property automatically transfers to the surviving spouse. The only certain way of safeguarding your position during the negotiation stage of your separation and until the eventual sale/transfer is for both yourself and your spouse to sign a disposition conveying the matrimonial home from your joint names and to the survivor to your joint names without the survivorship destination and having this registered with the Registers of Scotland. Thereafter your one half share of the matrimonial home will form part of your estate and be divided as per the terms of your Will, rather than going to your spouse.
Aliment – there is a provision in Scots Law for spousal aliment which is financial support provided by one spouse to the other upon separation/divorce regardless of the whether one party committed adultery or behaved in an unreasonable way. The extent of the support is dependent upon a number of factors, namely the needs and resources of the parties, the earning capacities of the parties and the circumstances of the case. During negotiations the income and outgoings of both parties will be considered in order to assess a reasonable amount of support. Please note however that where a spouse is being financially supported by a third party this will be taken into account in assessing aliment as this is clearly a circumstance of the case. Aliment is payable until Decree of Divorce has been pronounced however following divorce one party may receive continuing financial support by way of periodical allowance.
NB: Please note that if you are making alimentary payments under a court order to either your spouse or children under the age of 21 years then you can claim Maintenance Payments Relief in order to reduce your tax bill and information can be found at the following link: http://www.hmrc.gov.uk/incometax/maintenance-relief.htm. Any person receiving alimentary payments does not pay tax on this amount.
Children of the marriage – Both spouses have parental rights and responsibilities towards the children of the marriage, including the right to have the children reside with them, to have contact with them, to provide guidance to them and to promote their development etc.
Upon separating spouses must decide who shall have residence of the children (ie who the children will live with permanently) and who shall have regular contact with them.
The non resident parent (ie the parent who simply has regular contact with the children) is obliged to also aliment the children. This takes the form of a monthly payment to the resident parent and will be agreed in terms of the guidelines laid down by the Child Support Agency (now known as the Child Maintenance and Enforcement Commission), namely 15% of net income for one child, 20% for two children and 25% for three or more children. This level of aliment will however be reduced depending upon the number of days residential contact the non resident parent enjoys with the children and whether the non resident parent has any other dependents (ie children from another relationship which he/she may be supporting). Should child support be incorporated into a Minute of Agreement then parties will normally be given the right to apply to the CSA to regulate and perhaps reduce payments or to the courts for a variation of the amount if there has been a change in circumstances. The CSA will not entertain an application until the Minute of Agreement has been in force for a period in excess of one year and therefore should circumstances dictate you may have to apply to the courts for a variation. Again, arrears will accrue until the CSA have reassessed your payments or the courts have ordered a variation and therefore you must take action quickly. If you are the non resident parent and the Minute of Agreement has been in force for a period in excess of a year and you apply to the CSA for a reassessment, they will contact the resident parent for their consent to their involvement. If the resident parent does not consent then CSA cannot assess your case and your only recourse would be to apply to the courts. We have amended our style Separation Agreement to incorporate both parties express consent to the future involvement of the CSA should either party submit an application however there is no guarantee that the CSA will implement this as there have been no test cases.
Upon separation, and in the event that it is agreed/ordered by the court that it is the mother that shall have residence of the child(ren) of the marraige, then she may attempt to change the child(ren)’s surname to that of her maiden name. The surname requires to be officially changed with the General Registrar’s Office to enable a new birth certificate to be issued and to subsequently apply for a new passport however this can only be done with the father’s consent (the father must have parental rights and responsibilities). In the event that the father does not provide his consent then the child(ren)’s surname cannot be officially changed however the mother can change the child(ren)’s names by statutory declaration and have them known as another name at his/her/their school, GP etc.
Succession – In terms of the Succession (Scotland) Act 1964, in the event of the death of one spouse the surviving spouse has a right of succession to the estate of the deceased spouse. Please note this right of succession applies regardless of whether the spouses were separated prior to their death! In the event of a spouse dying intestate (without a will) the surviving spouse has Prior Rights (right to the dwelling house, furniture and financial provision, all of which have limited values) and Legal Rights (right to the moveables ie anything which is not heritage) to the estate however if a spouse dies testate (with a will) the surviving spouse only has Legal Rights. Accordingly, if you wish to limit your spouse’s claim on your estate it is imperative that you have a Will prepared which will of course reflect your wishes and ensure that your children (if any) are provided for. If you have a will prepared and wish to further limit your spouse’s Legal Rights claim then you may wish to convert part of or all of your moveable estate to heritage by buying property. In the event that you are uncertain as to whether you may have prepared a Will during your marriage then we would strongly recommend that you prepare a new Will in order to safeguard your position as you may find that your existing Will leaves your entire estate to your spouse!
Please be aware that in the event of a separation and either party dying intestate then the Prior Right to the dwelling house will only apply if the surviving spouse was ordinarily resident (ie living) in the dwelling house at the date of death of his/her spouse. It is therefore recommended that you remain living in the matrimonial home (whether it is in your joint names or the sole name of either party) until matters are finalised.
Further, we would recommend that upon separating you check with your pension provider(s) and any insurance provider(s) as to whether there is any specific nomination in favour of a third party and if there is one in favour of your spouse that you formally revoke this as a matter of urgency. Please also obtain financial advice in relation to any pension schemes held by you as you may find your spouse, regardless of your separation, will be entitled to a widow/widower’s benefit from the same upon your death!
Divorce -As a result of the Family Law (Scotland) Act 2006 the grounds for divorce are now a) One year separation with consent, b) Two years separation without consent, c) Adultery and d) Unreasonable behaviour. Please note that in the event that either party enters into a new relationship with a third party after the actual separation this is still classed as adultery and will give the other party grounds for divorce.
In the event that the parties enter into a Minute of Agreement as previously mentioned a clause will in the majority of cases be inserted into the Agreement providing that either party may raise the action for divorce as soon as the parties have been separated for a period of one year and that the other party is bound to consent to the same. This action for divorce will simply ask for Decree of Divorce since the finances and children of the marriage have been dealt with in the Minute of Agreement.
Please note that parties may apply for a simplified divorce themselves (ie DIY divorce) if they have been separated for the appropriate period of time, one of them is permanently resident in Scotland, there are no financial craves (ie neither party is claiming a capital sum or property transfer order from the other) and there are no children of the marriage under the age of 16 years. Either party can simply request the appropriate application form (SPA – one year separation with consent or SPB – two years separation without consent) from the Sheriff Clerk of their local sheriff court or print the appropriate application form from the Scottish courts website www.scotcourts.gov.uk, complete the application by following the step by step instructions and submit the same to the sheriff clerk with their marriage certificate and the appropriate fee (currently £90).