Financial Orders - Inheritance and Distribution

Hello there. Welcome, everybody. My name, stuff to my mood. I'm a solicitor on day lecturer today. I'm going to be speaking to you in this bite size session at somebody issues surrounding financial orders. It's Fars inheritance on distribution off family assets is concerned. So with today I'll be taking you through distribution off family assets through financial orders. What is often referred to, ah, term, which we previously referred to, his sort of relief, particularly where there's inheritance involved and I look at somebody leading case lord developments. As far as this is concerned, so many of you will be familiar that when we're looking at family assets, there's going to be the application off section 25 of the much manure causes at 90 73. When it comes to married persons, there's also, of course, this is a Partnership Act of 2040 Criminal north of the married Same Sex Couples act in December. Principles will be applicable in that regard. On the big question often, therefore, is what role what part does inheritance play? So is inherited something that is taken account is a resource for the purposes of section 25 of em see a if it is, is it one that subject division? Is it something that can be ring friends? Can you keep it for yourself and so forth? So it's those kind of factors, really, which I would be looking out for the purposes of this bite size session today. So we start with the one day earlier cases. This is the A R and A are case and see Relief 100 done by Mr Justice Morland in August 2000 and on this, then looked specifically at the issue of division off inherited assets on that, just to tell you. But about this case, this is one where the marriage it was a relatively long marriage. It was 20 year marriage to parties. Other child who was now an adult who just turned 18 husband, had Children from a previous marriage. The total wealth was in the region of some £21 million. So 21 million pencil. You can see what a certainty of big money case. Most of the resources have came from the husband's side, largely financed as a result of inheritance study had acquired over the years or assets it acquired by way of a gift from his family. So the bulk of the wealth, it was said, was non marital property and that it wasn't acquired as a result of the joint efforts of a couple doing a marriage. Where do you then stand with that type of situation? What happens to the inheritance that he has acquired before? He marries his wife well on the face of its non marital property? But then what this case highlights is that inherited wealth can indeed change status from because nonmarital asset to, in fact becoming a marital asset so that if, for example, someone inheritance he's used to acquire the family home which he, his wife and Children live in, then effectively has changed its datas to them become marital wealth, a marital last Saturday for which is subject to division. Okay, so if he has a patient of property from an inheritance, which they both lived in which they did, and I do some of the income that had come out of the inherited wealth which he had invested, which they're both benefit from, or he had benefited the family food and of course it becomes marginal asset and therefore would be subject to be used to meet needs and also the for purposes of off being shared. But if the bulk of the wealth had remained nonmarital, then only exceptionally with a court really allowed a wife to then go against that. If it's not meeting needed to meet needs, then it wouldn't be used. But if it is needs to meet needs, then of course it is possible to still go on. Rely upon non marital assets for purposes off. Meeting needs us to thinking behind it on UM, the court ended up granting a wife giving the wife an award of 3.3 million, which met her needs on the majority of the rest was kept by the husband, given it wasn't needed to meet needs and on the face of it was regarded as no marital assets, so it hadn't become subsumed within. The marriage is becoming marital assets, so that was wondering earlier cases. There's then develops in case which is a very useful one. Robson Robson This 2010 case This was a 21 year marriage on to Children or family. Total assets were 22.5 millions. Again, it's a very big money case you can see on here. Inheritors was such that the husband of brought it into marriage. Inheritance represented some 16 million on the wife did have some limited resources off her own, not 1/4 of peer off water. The wife, on amount of seven million on the court, had said that they had been extravagant by both her husband and wife in there man in which they had depleted the family assets. But Lord justice walled a time handed down s a very useful guidance on distribution. Big money cases where there was inheritance and His Lordship in particular, set out some very important aspects here, which is one has to really look at concentrated on the factors under section 25 after much. One, of course, is that 1973. This imposes a duty, of course upon the court to have regard or the circumstance of the case first consideration been given to the welfare whilst the mind of any child of the family who has not attained the age of 18. Now. The court also said that statute Section 25 doesn't specify does factors in any hierarchical order on order of importance, order factors have to be weighed up together on the court did say that insofar as inherited wealth is concerned, this will form part of property and financial resources, which a party has so therefore tease a factor which would therefore need to be taken to account for the purposes of Section 25 subsection two of M C A. But sold must other relevant factors. Sort of court would be required to take into account that wealth, which is inherited I'm not earned justifies it being treated differently from wealth, which is a crude as a result of the marital request i e. From joint efforts and therefore, even though it's a resource, it will be treated very differently effectively, could be treated as a non marital assets start off with. But then, if you look at dis judgment in more detail, His Lordship did say that the duration of the marriage on the duration of the time that the world has been enjoyed by the parties is also very relevant. So, too, is the stand of living under way, which the property was enhanced, preserved or depleted are factors which therefore will be taken into account. Eso putting it simply if the properties acquired before the marriage or way inherited properties acquired during a marriage, and therefore it comes from a source which is external for marriage. On the face of it, it may appear that this is to be treated as normal classes and therefore it should be really remained in the ownership of person who inherited it. On the other hand, more likely that the more longer wealth has been enjoyed, the less favorite is that should be ring fenced, excluded from distribution. So putting it another way, the longer the marriage to more harder days. One would argue to be up to justify that that inheritance being ring fence because chances are it's been used in the marriage and therefore it's it's effectively fertilized into the marriage and therefore it's become marital property and therefore every subject division of the marital asset. But if it's a short of marriage or if hasn't been used in the margin that way, it's been ring fenced. Then there is a stronger argument say that although it's a resource, it will still be regardless and on March Lassen Neff and therefore it wouldn't on the face of it be subjected Vision said. That has the case of a R and A are has emphasized that I mentioned even in those situations, you'll find that the court in still require one to effectively depend too disinherited wealth even and all circumstances if it is required to meet needs. So that's famous. D the thinking behind it. So again, it's a very important case with find Now the reserve Another more recent case, which has really looked at the issue of anticipated inheritance in the future on this is this case of higher to use it. Ali Reza against Hasam, you suffer Ibrahim would one on another's and this was a case in late 3700 down by the Court of Appeal. This was a case where, in fact it was. The wife appealed in relation to the financial remedies order. But a lower court had ordered for the payment by the husband, the wife of a lump sum payment off some £2 million by worth capital of maintenance and also paints of charm maintenance. Wife also got a provisional relational housing, but this was simply by way of her getting a time limited occupational interest so as to occupied a flat for a period of time, until such time as she remarried or until the death of her father, whichever was sooner on dust, really. What led to the appeal? The court really was being asked whether on the facts the court was being asked whether on the facts at the judge was right in law to have regard otherwise future inheritance from the father as a resource, which was she was likely to have in the foreseeable future on really putting it another way. What really a court has been asked was whether or not future inheritance in this case was in fact a resource that could be taken to account for the purposes of Section 25 subsection two, subsection a of the much vaunted cause that 1973 and really, that's really what the court really had to turn on just to tell you. But about the background of this case, it's one whereby the parties themselves were do nationals off the you can. Also the Kingdom of Saudi Arabia. Both families were extremely wealthy. Husband's father had died intestate three years previously, and he had set out in his will electoral wishes where effectively. Husband was entitled on the Sharia law. Ondo, the Saudi Arabian law for him to be in touch to 58.33% off his father's estate on us for the wife. Her father, living in Saudi Arabia, was very wealthy under husband, argued that she was under Saudi Arabian law. Under Sharia law, she was going to be entitled to inherit a substantial part of that money and therefore, with that in mind, what he her husband would be required to pay his wife should be there for somewhat limited given the future in hotels prospects for the wife. But the wife was arguing that the lower court was wrong to take account a well sort of wise father and also the wise potential future inheritance from him, and therefore effectively imposing otherwise father responsible to provide financially for his daughter in a wife and also reducing what otherwise would be the financial obligation of a husband to support a wife and the Children's well. This is where one of the things that the court was really been asked to address was, Does the wife father's wealth even come within the definition off financial resource for the pips of section 25 of EMC and the court really said on the facts, applying some of the previous authorities at that inn hotels prospects can be taken to account Uh, if, as a resource, if it's Ivor Vested or contingent interest, as it is in this case, and therefore the husband try to argue that it can be seen as a resource which can should be take through. Can't a zoo a resource for the pips of Section 25 but under fax? Was it inheritance, which needs to take into account in the fact that it's not been inherited yet? But it's likely to be in the future. So this is where it's different from Lee Case that we we just looked at the a r a r case that I just mentioned because that makes it very clear, as the Robson Robson case does. That inheritance that's already been inherited is, of course, a resource, but here this was future inheritance can that be taken into account on. But the court did say that Indian ordinary course events uncertainties as to defective inheritance at times weights impossible to say whether that person will get it or not would therefore make it hard to say that this is a foreseeable event in the future and therefore to resource. But here, the court said, the facts were different here. The wife's inheritance prospects did not have the uncertainty. Where you would find Ah well made in this country in England, for example, would have an element of uncertainty. And that's because under Saudi Arabian law, you've got the concept of to force I a ship law with their under under Leaf Sharia law. If inheritance was going to be passed on to Children, as in that case the daughter, than under that law off that country, she would be entitled to a certain percentage off that on therefore not basis. There was a likelihood that if there was inherit into the future, the wife would therefore the facts be getting on demand from that and therefore with that in mind, it is a resource which would which would be takes account but then to call us themselves this question. That said, even though the court may regard the future inheritance as of financial results for the purpose of Section 25 bearing in mind, the forced airship laws in Saudi Arabia. Is it still to be disregarded? And this is really where, where the question really needs to be addressed. The wife sought to persuade the court that the remainder uncertainties with her really getting this money, that is, the father could potentially give all these money away to charity or someone else. He could lose all these money to codus some kind of political event or some catastrophe, which means that he loses all these well. So you know it's a future prospect of resources. It still works on the promised. If it's day, if it wasn't there as at the date of death, of course. How can you then take into account insofar certified in the financial assets, since Father Divorce is concerned now? So the wife tried to argue that was the husband was arguing that actually it is a resource there. It should be take account at the amounts that you're looking at with very substantial. The husband said that the wife's father's wealth was in the region of some £500 million and he suggests that under Saudi law, wife would get approximately 20% of the estate and therefore she could end up with an inheritance of some £100 million Andi, he said that underside your A B law under the forced a airship law. The entitlement would be such that your wife would been touched the 1/5 of the estate upon her father's death, subject to a 1/8 reduction if the husband died with a surviving widow. So if the father died with surviving widow but on a desolate room, why would still be entitled to a 1 50 year off her estate? So the husband's case was not withstanding the contribution to wife her family. While fared, Wife simply required a roof over the head until such time as her father died or she remained, whichever one occurred first. But in fact, the court decided to go with the wife under fax here. They talked of you that it would be inappropriate for a wise father to have a non publication on the English law to financially support his daughter, falling to marry, to break down. And that was, of course, the responsibility of the spouse and the person she was married to, and therefore her husband was. The husband argued that the father device father did have a moral obligation to support his daughter, Post divorced. But the court did say that under facts, they wouldn't take down to count. It wouldn't consider that the wife's contribution towards the marriage was just a significant test. Her husband's her being the homemaker, keeping the family together, non financial contributions being just a salad. This wasn't needs case. And therefore, with that in mind, the court on the facts was prepared to say that the lower court's decision had in fact denied the wife any recognition of form of a capital settlement to reflect her contribution to the marriage. On the wife's perspective, inheritance was undoubtedly a resource which the court was prepared to taking account. But it wasn't a resource that would therefore deplete the obligation upon the husband to be able to financially support ER on the court. Therefore, the facts did say that it was hard to see how in a situation such as this, where the husband had assets in the region of some 14 to 17 million, together with a significant holding capacity of about £350,000 a year, he would provide to conclude that his wife, after some 14 years of marriage would know any capacity in her own right and with three Children should be response before one who was had special needs should be denied a catheter settlement sufficient enough to enable it to buy a house for herself in her own right. They're from that basic or was not satisfied that the future inheritance prospects that wife may end up with would be sufficient to prevent the court from really loudly appear on the part of the wife and therefore re meeting for consideration off a lump sum being made available to the wife to enable it to purchase the property for herself. So you can see it's a very important case for treaty addresses, uh, the shoot about future inheritance prospects There is, in the other case, also of hate C and F W. This was a case which very sad case. It's one where the wife herself was represented through a litigation friend, which happened to be a solicitor with experience and expertise in the quarter protection related matters. It's a case where the husband played north longer, any significant role in the proceedings. In fact, he had not instructed lawyers for some time in the litigation on a case itself, turned on one where the court has been asked to really make a decision insofar as making a financial order on behalf. The wife in circumstances where the husband had not in fact attended to finally giving although he had in the earlier part of the proceedings, had in fact participate by completing and filing for Mate for Me is on also replaced. The question is, and also did substances Section 25 statements at least a court did have information as to the husband's position or be was dated. It was some 12 months or so old, but also the issue in this case was in relation to the inheritance in that the court, I was aware in the four meter the husband had put together he had set arteries for me. You know it was a year old. That the majority is financial resources were divide from inheritance, which had been gifted to him by his mother on, but the money's had actually become available from inheritance on. The wife didn't dispute the fact that the assets were, in fact predominantly acquired before the marriage, and therefore, in the face of it. We're not married. Torso. The wife did accept that. But the court did say that although this is a factor of course, which will be considered because on the fact this was a needs case bearing in mind what we've said about white, white and also D A on a our line of authorities or protocol would take into account that factor. If if really, this nonmarital asset was in the form of a hiatus was quite meet needs, which on the facts here it was, then that would justify one being able to dip into this in order to be able to meet the needs of the wife sort of court eso talk down to account, deciding what order would be made now. This was a marriage off off less than medium length, to which are certainly one would need to look at the specific situations when the needs of the wife under facts. The court did make an order which they felt was a proportionate wanted in these circumstances. Again, you can see with many of these cases there are very much emphasizing the similar principles that were being said in develops and evolves in case, which is insofar premarital acquired inheritance is concerned. Yes, it's possible for that to be ring fence. But the longer the marriage, the more likely the aesthetic becomes subject to being transferred and converted into marital assets and therefore used to meet needs and also to be used for the purpose of sharing. But even if it is and has been ring fenced, then if it is needed to meet needs, then does circumstances it will be relied upon in used in that regard. And as for the hired case dimension, it's farce future inheritances concerned. Even when one is looking at forced airship laws, as in Saudi Arabia, for example, that in itself wouldn't necessarily means that it would still be a resource which would therefore prevent the court from being able to divide assets based upon needs now and therefore requiring the other spouse to be able to justify meeting the needs of the other spouse when they are divorcing. Okay, so you can see inheritances of a significant issue and therefore really, these are some of the leading cases which which really brings this into play. But I thank you very much for listening. I hope has been used for four years as a bites I section on. There are some questions and answers to look at here and so far is really testing your knowledge insofar as that's concerned. Thank you very much for listening and I'll speak to you next time. Thank you. Bye Format.