HM Insights

Once bitten, twice shy? Common issues when older married couples separate or divorce

Many of the clients who consult us about separation and divorce are older. One or other may already have been through a messy break-up. They may have children from previous relationships. They will likely have built up pensions and other assets. They may have pooled resources to buy a new house together. What are the issues to consider on separation and divorce in those circumstances?

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Issues with children

If the couple are married and one or both has children from a previous relationship who live in family with them, there can be unforeseen consequences on separation.

Step parents do not have automatic parental responsibilities and rights in relation to a child who is not biologically related to them. However, if a step parent adopts the child, then s/he will have financial obligations towards the child - the obligation to pay child support and then if the young person goes on to tertiary education to support that child financially up to and including the age of 24 years.

The child will also have succession rights in respect of the parent who has adopted them. At Harper Macleod we are seeing an increase in adoptions, for example, where the new couple have a child together and want to create parity for the step-child.

The other option for a step-parent is to apply to court for an order for parental responsibilities and rights (PRRs) and once granted that too will create financial obligations. Hopefully, in these situations, the step parent will have been advised on the obligations flowing from their decision to adopt or obtain PRRs.

However, and this is not widely known, a step parent who has not adopted the child nor sought an order for PRRs can still be called upon to support a step child financially upon separation. This is where the child can be said to have been accepted as a child of the family. So, if the step-parent has been involved in caring for the child and essentially taking on the role of parent, then this is the sort of situation which could give rise to a claim.

Issues with pensions

With older married couples there is more chance that by the date of marriage one or other's pension will already be in payment. Or, a pension started many years before marriage is no longer being contributed to by the date of marriage, perhaps because the spouse has changed job and started a new pension elsewhere.

What happens on separation after a lengthy marriage in those circumstances? Is the pension part of the pot of "matrimonial property" available for division between the spouses?

Previously, we would have argued that such pensions should be left out of account, and for many this seems a fair and reasonable way forward since none of the contributions were made during marriage. However, following the Supreme Court decision in the case of McDonald v McDonald, it is no longer possible to argue that only active membership (to the exclusion of deferred or pensioner membership) brings a pension into the pot of available matrimonial property.

We are still able to apportion the pension valuation just to cover the period from date of marriage to date of separation but that is likely to be cold comfort for a pension holder coming out of a lengthy marriage.

There are still arguments that can be marshalled on behalf of the pension holder, to the effect that special circumstances exist. However, whether or not these are upheld is at the Sheriff or Judge's discretion, inevitably will give rise to counter arguments and as matters presently stand have not been properly explored in reported case law, making it difficult to predict outcomes.

Issues with the family home

A house owned by one spouse prior to marriage is not matrimonial property unless there is scope to argue that it was acquired "before the marriage for use by them as a family home" (section 10 (4) (a) of the Family Law (Scotland) Act 1985). But what of the situation where that house is sold during marriage and the proceeds used towards funding purchase of a new property in joint names? What happens to that contribution from a non-matrimonial source if parties separate?

It is possible to argue special circumstances (under section 10 (6) (b) of the 1985 Act) exist to justify a departure from equal sharing (being the default method of sharing in many cases) of the net value of the matrimonial property.

There is case law to suggest this argument is less reliable where the funds were put into a jointly owned home (Cunningham v Cunningham 2001 Fam LR 12). Then again, in another case, Harris v Harris [2013 Fam LR 122] the Sheriff made clear that the decision in Cunningham does not mean source of funds can never be applied to the matrimonial home. There is a raft of case law which can be marshalled depending on what you want to argue. Whilst each case turns on its own facts and circumstances, this does inevitably lead to uncertainty of outcome which is less than ideal for clients.

An example scenario

Consider the scenario where the couple move into a house which the wife has owned for many years and spend their married life there. The house is not matrimonial property, having been acquired prior to the marriage. The husband will have occupancy rights by virtue of the marriage.

Parties separate following an allegation of abuse on the part of the wife, leading to criminal charges being brought against her. She moves out. The husband continues to live in the house. The mortgage is in the wife's sole name so she has to keep paying it to avoid arrears accruing. She is the higher earner so there is no scope on her part to seek financial support ("aliment") from her spouse. She does not have grounds for divorce and although her husband may have grounds based on alleged unreasonable behaviour on her part (strengthened by the police report etc) he tactically chooses not to raise proceedings. The net effect of this is that he gets to keep living in the house until two years have elapsed (or until he forms a new relationship and can be said to be committing adultery, so giving wife the option to raise divorce proceedings based on his adultery) and his wife can divorce based on two years' non-cohabitation.

The wife cannot try to sell the property because no doubt the husband will not consent to the sale. She could stop paying the mortgage and eventually the lender would repossess but this will prejudice her credit rating.

One option is for the couple to enter into a pre-nuptial agreement before marrying. Alternatively, and if they are already married, consider a post-nuptial agreement. Both can be used to ring-fence assets in order to prevent them coming under the definition of matrimonial property.

So, the pension all accrued prior to marriage could have been excluded from the matrimonial pot.

In the example of the house owned by the wife, the agreement could also have provided for the husband to move out of the family home within a set period of time, leaving the wife free to deal with the property as she wanted.

Such agreements can be extended to deal with what happens if a non-matrimonial asset is sold or realised during marriage and used to purchase a new asset, in order to avoid the need to rely on a discretionary source of funds argument. So, well drafted pre and post nuptial agreements can provide certainty and security.

Whilst older couples who have already experienced the messy and expensive fall-out of a previous separation may be more aware of the need to protect themselves on a future marriage, a pre or post-nuptial agreement can still be viewed with suspicion, as if it will in some way jinx the relationship.

As family lawyers we view it as more of an insurance policy, something to be tackled in just the same way as the need to have a Will and Power of Attorney and really just part of pragmatic planning for the future.

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Even if parties ultimately decide not to enter into a pre or post nuptial agreement, at least if they each get advice from a family lawyer they will be better informed about obligations and possible consequences.