April 18th, 2019
A financial remedy case was heard in the Royal Courts of Justice on 11th December 2018. The case concerned two parties who married in 2007 and separated in 2016. They had one child.
The parties were both relatively young; the husband was 36 and the wife 34. The husband earned £130,000 per annum net in the financial sector and the wife £40,000 per annum net in the advertising and media industry.
During the marriage, the parties did not own a family home and instead chose to rent.
In 2015, towards the end of the marriage, the wife created two discretionary trusts at the instruction of her father who was very wealthy. The wife’s father paid a total of £17.6 million into the trusts in 2016.
Husband’s Case – The husband sought a lump sum payment of £1.5 million from the trusts to meet his needs. He argued that the definition of needs is referable to the scale of wealth.
Wife’s Case – The wife sought child maintenance of £1,800 pcm, nominal spousal maintenance until the child of the family reached 18 and a dismissal of the husband’s claims. Her case was that the husband had not evidenced any need at all and could comfortably live on his own income.
Judgment – Mr Justice Holman, having carefully analysed the Section 25 Factors, concluded that the husband’s case fell at both hurdles. The trusts were discretionary. They were entirely in the wife’s father’s control. No funds had been released to the parties during the marriage, and the wife’s father stated that no funds would be released during his lifetime. Secondly, the husband failed to establish a need for a capital payment. The parties had lived in rented accommodation throughout the marriage and so remaining in rented accommodation would be entirely consistent with the standard of living enjoyed during the marriage. This was also comparable to the standard of living/housing situation of the wife and child.
Accordingly, the Court dismissed both parties' claims for financial relief, ordered a clean break and directed that the husband pay child maintenance at £1,200 pcm.
This case is a reminder that needs should be carefully considered in line with the standard of living enjoyed throughout the marriage. Additionally, discretionary trusts should be approached with caution, as clearly the funds were not in the control of the parties to these proceedings.
If you have any questions about discretionary trusts or any other queries regarding financial remedy matters, then please do give one of our solicitors a call on 01908 262680.
Having obtained her A Levels from the Royal Latin School in Buckingham, Rebecca Stewart went on to obtain a Legal Secretary Diploma through Pitmans Training and immediately following qualification secured a role at Hawkins Family Law. Following that she discovered her true ambition lay in becoming a Legal Executive specialising in Family Law.In 2012 Rebecca enrolled at Cilex Law School and by 2015 had completed all her level 3 exams, achieving distinctions in 3 of these modules, and is now an Associate Member of Cilex. Rebecca is now working towards her level 6 qualifications and is now able to act as a trainee Legal Executive under the supervision of the Directors of Hawkins Family Law.
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