Individuals and Families

Individuals and Families

Below are some common questions we have received from clients concerned about the impact of COVID-19. If you have a question that has not been answered below, please submit your question here, and we will respond to your query directly.

Question: How will my UK tax status be affected by additional days spent in the UK due to COVID-19?

Answer: Your tax status is likely to be impacted, and it is critical that you take legal advice quickly to ensure your position is well protected. Further detail on this matter can be read here in our recent blog.

Question: We have a prenup and our wedding has been cancelled or postponed – will this affect our prenup?

Answer: Check your prenup: most will give a window of between 6 and 12 months following the planned wedding date, during which the prenup will still be valid. This is because, even in happier times weddings are sometimes postponed. If you are concerned, please contact us for advice.

Question: We don’t yet have a prenup. Our wedding has been postponed – should we delay getting our prenup?

Answer: It is strongly recommended that prenups should be signed in good time before the wedding. In our experience, the sooner they are prepared the better, as there are so many other things to think about in the run-up to a wedding. If your wedding has been postponed, this is an ideal time to start work on a prenup.

Question: We are self-isolating in separate households. Our prenup has been agreed but not signed – is this a problem?

Answer: Prenups do not usually require both parties to sign at the same time and there is no issue with each spouse signing different counterpart copies of the same agreement. However, they often do need the parties’ signatures to be witnessed. However, this should not pose an insurmountable problem: your witness may be able to witness your signature by Facetime, or your lawyers may agree that the prenup can be signed later, provided the content is agreed.

Question: We are in the process of negotiating a nuptial agreement and we have exchanged financial information. However, the COVID-19 pandemic means our assets have reduced in value and our income is less secure. Do we need to update our financial information?

Answer: For a nuptial agreement to be considered fair and upheld by the court, each party should have a good understanding of the other’s financial position. If COVID-19 has materially affected the value your assets or your job security, then you should certainly make the other party aware of the fact. Even if your financial circumstances have not changed significantly since you exchanged financial information, it is good practice to formally confirm that this is the case to your spouse in the event of a delay in signing your agreement or your wedding taking place, in the interests of clarity and transparency.

Question: If our assets have declined in value, should that affect the provision that is made in our nuptial agreement?

Answer: For a nuptial agreement to be upheld by the court, it should make fair provision for both parties in the event they divorce. What is considered fair will depend on the couple’s individual circumstances at the time of the divorce. Whilst it may appear that a reduction in the parties’ asset values before the marriage should result in lower provision, it’s important to remember that the court will be testing fairness at the point of divorce. Most economic commentators expect the effects of the COVID-19 crisis to be fairly short-term, and most marriages last many years (if not a lifetime). A decline in asset values is therefore not necessarily a reason to reduce the level of provision in a nuptial agreement. However, each case is different so contact your lawyer for advice.

Question: I want to get divorced and sort out my financial affairs with my spouse. Can I do so?

Answer: Yes – the courts are still receiving petitions for divorce or dissolution of civil partnerships. It may not be the easiest time to finalise your finances but there is nothing to stop you reaching an agreement with your spouse now if you want to, and the courts are still able to approve financial settlements (which is important – see below). There is also nothing to stop you from making an application for the court to determine your finances if you cannot reach agreement with your spouse. However, be aware that the court is prioritising urgent interim applications (such as to meet urgent outgoings or to freeze assets).

Question: I reached a financial settlement in relation to my divorce just before the pandemic, it’s not affordable for me now, can I renege on it?

Answer: In some circumstances, the answer is likely to be yes. In others it will be no. It may depend on the nature of your resources, when you reached the settlement, whether you reached the settlement by consent or whether it was imposed or perhaps encouraged upon you. It may also depend on whether a Judge has approved the settlement or not, and whether the order made by the Judge has been sealed by the court. It may even depend on whether the order has been partially implemented or not or relied on by your spouse in some way, and the way in which your resources were divided by the order.

If you simply renege on a settlement or order without engaging proactively with your spouse you can expect that they might apply to enforce whatever has been agreed or ordered. You will likely have to decide whether to formally apply to be released from the settlement or order that you have finalised. In normal times the court will usually hold people to bargains that they have made, including where those bargains can be deduced from correspondence or interactions between lawyers acting for both parties, even if the bargain has not been signed. But these are not normal times and it is likely that fewer people will be kept to bargains.

Question: I can’t afford my spousal maintenance payments, what can I do?

This can be an incredibly stressful situation for clients. You can try to negotiate a reduction in the maintenance, whether temporary (a suspension) or permanent (a discharge, or a clean break). The most important factor is likely to be the extent to which your income has changed from what it was when the order was made, or the extent to which it might change in the future.

If you can't negotiate a variation or clean break then you can make an application to the court. You will then have to decide whether to stop paying maintenance in the meantime. Breaching an order is a serious matter but the court does have the power to release you from having to pay any arrears that have accrued to your former spouse in the meantime. That does not mean that it will do so. If you act unilaterally without a court order and reduce what you are paying to your former spouse you can expect an application by them to enforce the order. This could leave you liable not only to pay any arrears that accrue but also your ex-partner's costs. It is likely that in some cases, the courts, in due course, will recognise that some people have had no option but to act unilaterally to some extent due to the financial impact on them. This might be especially relevant if their former spouse is not being reasonable in accepting a reduction. The critical question will be the proportionality of their reduction.

Question: The court has just made a final order in relation to financial settlement in my divorce, is it still effective?

Answer: There has yet to be a test case on whether the current Covid-19 outbreak, and the impact on many people's livelihoods, is what we call a 'Barder event'. A Barder event is an event which has undermined the whole basis, or assumption, behind the order that was made, and enables usually the paying party to escape their obligations under the order.

In the case of Barder, the husband was ordered to transfer his share of the family home to his wife but tragically the wife died very soon after the order was made. She had made a Will leaving her assets to her mother. The husband managed to get out of having to comply with the order (opposed by the wife's mother). However, Barder events tend to be case specific rather than general. So for example in 2009 the Court of Appeal, in a case called Myerson, made clear that the "credit crunch" was not a Barder event. Nevertheless, it did not rule out something similar being such an event if the paying party had an order imposed on them (rather than consenting to it).

It may also be important that the court said that the credit crunch was simply an example of natural price fluctuations – it must be questioned whether the current Covid-19 crisis was foreseeable in the same way (or, if it was, when it was) and whether the lockdown and the impact it has had is in any way natural. We think that although some spouses may well, in the light of what has happened and what will happen, find a way to be released from their obligations, the courts will want to keep very tight control over the types of cases in which this is possible, and how. That may mean Covid-19 is not classed as a Barder event, or that it is only potentially a Barder event in specific types of situations.

Question: My financial order says that I will sell my house, I don’t think it will sell for months now, what can I do?

Answer: The reality is that the person in occupation of the property will probably have to remain in situ until the property is sold. The other spouse, who may have anticipated renting until the sale, may have to move back in (if it is safe to do so). It all depends. Some orders do seek to anticipate a relatively lengthy sale process and seek to ensure clarity about interim arrangements, including interim finances, until sale. But it is also fair to say that some orders do not (for example they are agreed when a buyer has been found and has perhaps made an offer to purchase the family home). If your order does not make clear what should happen, or you find yourself in circumstances which could not have been anticipated (for example one spouse has to pay maintenance to the order pending sale to pay the mortgage but has lost their job or been furloughed), then you could consider trying to negotiate an interim variation with your spouse. If you are unable to do so successfully then the same points made above apply. You can make an application to the court, and you will be faced with the difficult decision pending a hearing about whether you can act unilaterally in some way (assuming you can) and to what extent.

Question: My former spouse has just started financial remedy proceedings, is the court running and what does this current situation mean for the litigation?

Answer: Yes the courts are running and you will need to comply with any orders for disclosure of financial information and documentation (and any other orders) until the court determines otherwise. It is highly likely that any hearing listed in your case will be conducted either by telephone (if directions cannot be agreed) or by Skype/Zoom/Teams, etc. The emphasis from the courts is very much on the need for litigants to agree directions where possible and to use other forms of dispute resolution if they are able (such as mediation or arbitration) to resolve any issues. This includes issues which would normally be handled by the courts (so for example the timing and ambit of expert evidence).

We think it is unlikely, however, that many courts will expect litigants to settle their financial affairs on a final basis during this time (unless the outcome should be obvious or is not impacted by the fluctuating value of assets). So most financial court work will be focussed on disclosure, protecting assets, financing of legal fees, interim finances, and the extent to which expert evidence is useful at the moment (and the ambit of that evidence). However, that does not stop parties from reaching settlements if they can or if they want to. Many financial specialists are adept at conducting 'Private FDRs', that is, a court led mediation. It is where someone who gives both parties a (remote) steer as to what outcome they would decide on if they were the Judge at a final hearing. Such an option can save parties a lot of time and money.

Question: I was attending mediation with my former spouse and we had just agreed the values of all our assets, what happens now?

Answer: You will have to decide which of the assets will need to be revalued, and whether it is worth doing so at the moment (and if it is not, then when the exercise should be undertaken). If you do not have separate legal representation your mediator can help with this.

Question: I am due to make an instalment payment of a lump sum under my financial remedy order but I can’t afford it, what can I do?

Answer: It is possible, albeit traditionally difficult, to vary the quantum of a lump sum by instalments (as distinct from a single lump sum, or separate single lump sums, which can only be varied as to timing). However, in the current climate it remains to be seen whether this rule will be relaxed. Traditionally, it has always been more straightforward to persuade a court that the timing of a lump sum should be adjusted, even significantly, rather than the quantum. As ever, it all depends and if you are able to, seek legal advice.

Question: I think it is too risky to divorce and the moment but I want to progress the financial settlement with my spouse, are there any other options?

Answer: Yes, you can agree a separation agreement and implement it now without it being approved by a Judge. However if not approved by a Judge it will not become an order. Therefore you run the risk of your spouse trying to go behind it in the years to come on the basis of a change of circumstances (although equally you may benefit from having that option available to you).

Question: Can I begin mediation at the moment?

Answer: Yes, many mediators (including ours) have facilities to enable remote mediation sessions with clients during the Covid-19 lockdown. This may involve both you and your spouse being on a video call with the mediator, to begin the route towards reaching a financial settlement. The process of financial disclosure and raising questions of disclosure can all be done remotely and so you should feel confident that mediation remains available.

Question: Does what I am experiencing fall under the definition of abuse? Is abuse necessarily limited to physical violence?

Answer: Taking the questions in turn: (i) quite possibly and (ii) not at all. The definition of domestic abuse is very broad and non-physical forms can include emotional, verbal, sexual or economic abuse. Being manipulated emotionally, or being subject to coercive, controlling or threatening behaviour (for example, being monitored excessively, isolated from friends and family or repeatedly worn down over time) will likely to constitute domestic abuse. No two cases are the same and it very much depends on the circumstances on the ground. The Courts treat domestic abuse very seriously, whatever form it takes.

Question: I am concerned about my safety and that of my children. What can I do?

Answer: If you feel that you are in immediate danger, call the police on 999. Otherwise, there are a number of charities that offer emotional, practical and other forms of support. For example, the National Domestic Abuse Helpline (tel: 0808 2000 247) operates 24/7 and offers free, confidential advice, while other charities offer targeted support for specific communities. The Government has listed the details of a number of charities here.

Domestic abuse is often addressed through criminal prosecutions, though civil remedies also have an important role to play. There are two types of injunctions that may be appropriate:

  1. Non-molestation orders, which offer protection from certain actions. For example, they can prohibit the use or threat of violence; any form of direct or indirect communication; and any form of harassment, as well as other specific actions, depending on the circumstances. Breaching a non-molestation is a criminal offence which ultimately means the perpetrator can be imprisoned as a consequence.
  2. Occupation orders, which regulate the use of a property. For example, they can require a perpetrator to leave a property and prevent them from returning, or grant a right of occupation to a victim who would otherwise have no rights. Depending on the circumstances, breaching an occupation order can lead to arrest.

Question: Does the current “lockdown” mean I have to stay at home?

Answer: No. Government guidance is clear: the household isolation instruction does not apply if you need to leave your home to escape domestic abuse.

The current lockdown has led to a surge in the number of cases of domestic violence being reported. The restrictions have led to further challenges for people suffering domestic abuse, with heightened tensions; more opportunities for the perpetrator to exert control; and fewer opportunities for the victim to escape.

The overarching message from the government, police, legal profession and third sector organisations is clear : even in this unprecedented time, victims are not alone and support continues to be available.

Question: I’m concerned about someone I know who may be experiencing domestic abuse. What should I do?

Answer: As above, depending on the circumstances, call 999 or the National Domestic Abuse Helpline (details above) for guidance and support on how to help the individual in question. Do not approach the perpetrator directly – this could make matters worse for the victim and put you at risk of harm.

Nuptial Agreements

Commercial Concerns

The effects of the COVID-19 pandemic are being felt across sectors and industries, with many businesses unaware of how to continue trading under evolving guidelines and regulations, and how changing legal requirements affect them. These are some of the frequently asked questions from our clients concerning their business and commercial matters and should you have additional queries, we welcome you to submit them to us.

Business & Corporate

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Nick Capstick-Dale, UK Real Estate Ltd