WILL I HAVE TO PAY MY EX MAINTENANCE IF WE DIVORCE?
When a couple divorce there are often three elements to their financial settlement. Firstly, the division of capital assets, which includes properties, business interests, savings and investments. Secondly, the division of pension assets. Once we know what each spouse will receive by way of capital and pensions, we must look at their respective income positions and income needs. If one spouse is unable to meet their income needs the other spouse may be ordered to pay them spousal maintenance, assuming that the paying spouse has more than sufficient income to fund their own income needs as well as pay spousal maintenance. This maintenance is separate from child maintenance.
When a couple divorce the law states that you have to look at earning capacity and not just what is currently being earned. One spouse may not have worked for some time, but that does not necessarily mean that they do not have an earning capacity, particularly if they are not looking after young children. Those divorcing are expected to mitigate their own financial circumstances and will be attributed with an earning capacity if they can work, but are not currently doing so, or are working part time but could work on a full- time basis. They may be given some time to find employment, or increase their hours of work, so they may be awarded a higher level of spousal maintenance for a period of time, whilst they find a suitable job. The maintenance payments will then reduce or may end altogether, depending upon the circumstances.
Income from capital will also be considered, not just earned income. If a spouse receives capital or investments as part of their divorce settlement, which are not needed to fund their housing, the income that these can generate should also be taken into account. If one spouse is retaining a business as part of their share of the capital assets, this business will usually generate their income and be what they pay spousal maintenance from. It is therefore only fair that the spouse receiving the spousal maintenance payments uses the capital they receive (unless it is the house that they live in) to generate income as well. Any income that can be received from a pension, once retirement age is reached, should also be taken into account.
With regard to how long spousal maintenance is payable for, it can be for a specific number of years or there can be a joint lives order, which means that it is paid until one of the couple dies, or until one of them applies to court to vary the order. Joint lives maintenance orders are usually made when it is unclear when the spouse receiving the maintenance will become financially independent, which is often the case when that spouse is the main carer of very young children and does not work. There has been a move away from joint lives maintenance orders in recent years, as judges have been concerned that they create little incentive for those receiving the maintenance to move forward with their lives for financial reasons. However, every case is decided on its own specific facts.
If a spousal maintenance order is made it will automatically end if the recipient remarries. It will not automatically end if they cohabit, but their cohabitee’s income will be taken into account when looking at their income needs, so the maintenance order may then end or at the very least be reduced, depending upon how much their cohabitee earns.
Spousal maintenance orders are always variable, so if the payer’s or the payee’s financial circumstances change, they can be varied, either upwards or downwards. This creates financial uncertainty for both going forward, as neither knows what the future holds financially. It also means that there is an ongoing financial bond between the couple and an ongoing financial commitment for the payer, which is not always ideal. In light of this, the law says that where it is financially possible a clean break should be achieved between a couple. If spousal maintenance must be paid, the court will look at capitalising that maintenance, if there are sufficient funds to do so.
Paying a capital sum in lieu of spousal maintenance has positives and negatives for the both the payer and the recipient. The payer gets certainty and there is no risk of the maintenance being increased in the future, but if the recipient gets remarried only a few years later, they may feel that they have over paid, given that spousal maintenance ends on remarriage. The recipient may be worried that it will take them longer to re-establish themselves in employment and not have enough money to live on if they accept a capital sum. On the plus side they do not have to worry about what will happen if the payer loses their job or if their business takes a dip in performance.
It is worth noting that if there is insufficient money to capitalise spousal maintenance now, either the payer or the payee can apply to have it capitalised in the future. For example, if a business owner sells their business and receives a large sum of money, an application can be made to court for a capital sum to be paid in lieu of the monthly maintenance payments. Sometimes the recipient will also apply to increase the maintenance payments before they are capitalised. Business owners who plan to sell their business at some point in the future would be advised to obtain a clean break settlement, if they divorce, if they can afford to do so.
Amanda McAlister, Managing Partner of McAlister Family Law
Going through a divorce is a stressful time for anyone, but for business leaders or couples in business, there is often more on the line than just emotions. Prior ...
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Each and every member of our award-winning team is a genuine specialist in family and child law.
As can be seen from our entries in the various respected legal directories, we employ some of the most highly ranked specialists in the country.
Managing partner Amanda McAlister is one of the very few family lawyers listed as an “eminent practitioner” in Chambers and Partners and other partners are listed as leading individuals in the Legal 500.
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McAlister Family Law is Beyond Group’s specialist Family and Children Law Practice. The Group established the specialist family law firm in 2017.
Amanda is one of the UK’s most experienced, and respected, family law practitioners.
As a divorcee, a mother and a step-parent, Amanda brings empathy and personal experience of the many stresses and strains that a marriage breakdown can cause.
Amanda has been awarded the prestigious status of Eminent Practitioner in the independent directory Chambers and Partners. She is also one of the handful of individuals in the North West singled out as a Leading Individual by the Legal 500 who has described her as “truly phenomenal” and a “leading light”.
She has a reputation as being warm and engaging but at the same time is known for being a fighter, someone who is fearless when pursuing her client’s interests. Amanda has expertise in all aspects of family law but specializes in divorce involving financial issues, particularly those with an international element, complex pension or trusts. She also represents parents and wide family members in disputes concerning arrangements for children.
Amanda has extensive knowledge of co-habitation disputes and advises on separation and pre and postnuptial agreements.
Fiona has specialised in family law for over 20 years.
She is an expert in dealing with divorces which involve businesses and is know for her commercial awareness. Clients praise her attention to detail and her calm approach. She is ranked as a “noted practitioner” by Chambers and Partners.
Whilst Fiona undertakes all areas of family law, she is particularly accomplished at dealing with divorce cases where there are substantial and complex assets.
She regularly advises business owners on how they can protect their assets by way of pre-nuptial or post nuptial agreements. She also gives expert guidance to those who are divorcing and are keen to avoid the divorce impacting their business.
Fiona regularly acts for parents where a financial claim is being made on behalf of their child, as well as advising on disputes regarding arrangements for children.
She is known for her calm, empathetic and thorough approach, which ensures that all issues are considered and then dealt with proactively.
Liz has specialised in divorce and family cases for over 30 years.
Liz sits as a Deputy District Judge, and has specialist knowledge of the Child Support System having also sat on the original Child Support Tribunal; she has an understanding of the avenues available to resolve issues for the unmarried who have to rely on civil law as well as the Child Maintenance Service to resolve their cases.
As a member of the International Academy of Family Lawyers, Liz is well placed to assist her clients who are residents abroad.
Liz is an accredited member of Resolution and a member of the Chartered Institute of Arbitrators through which she practices as a Family Law Arbitrator, a member of the Law Society Family Panel, an assessor for the Law Society Panel, a member of the International Academy of Family Lawyers, a speaker for MBL and sits as a Deputy District Judge. She also lectures to family practitioners on a number of topics.
Ruth is a highly experienced family lawyer of more than 25 years and a specialist in Children Law, both public and private.
She has been a member of the Law Society Children Panel for more than 20 years, is a Member of Resolution, Reunite and works closely with the Association of Lawyers for Children as a Member of their organisation, attending the executive committee meetings. She is also a representative on the Cheshire and Merseyside Family Justice Board, often arranging training courses for her fellow professionals.
Her work also encompasses divorce and financial matters, including complex company assets, pension and trusts. Ruth also works with teenagers in relation to deprivation of liberty/secure accommodation orders: having fostered children for many years, she has seen the other side of care proceedings and this experience allows her a deeper and more personal understanding of the issues inherent in such situations.
Paul is experienced in dealing with all aspects of relationship breakdowns, including divorce and finances, cohabitation, children matters and domestic abuse matters.
His friendly and positive manner provides comfort and reassurance to his clients. Paul has assisted many people who have served in the Armed Forces and as such is known as the go-to expert for all Family Law by many military and ex-military personnel.
Paul is a firm believer in putting children first in any case where a child or children are involved. Once Paul has discussed and agreed his clients’ objectives, Paul will work tirelessly for them to ensure the best possible outcome.
Melissa has a vast amount of experience in dealing with all aspects of family law, and in particular children matters.
Many of her cases are complex involving such matters as allegations of domestic abuse, allegations of harm, parental alienation. Melissa is highly experienced in conducting divorce, financial and children matter cases with international elements.
She is a member of Resolution and is committed to resolving family law issues in a constructive and positive manner.
Melissa is focused and has a calm approach to her cases. She puts her clients at ease and has their objectives at the forefront of her mind.
Anna graduated from Lancaster University with LLB Hons in Law in 2011.
During Anna’s time with McAlister Family Law, she has strengthened her extensive knowledge surrounding managing assets during unmarried couples, dissolving civil partnerships and urgent children applications. Anna has a great relationship with the Police Federation and attends monthly legal advice centres to assist officers and provide sound advice relating to divorce, protecting assets including police pensions together with other matters such as contact with children.
Anna believes that client care is of the utmost importance; she appreciates that every time a client or potential new client makes contact it is because they need help and guidance through very difficult and highly emotional times.
Calm and kind, her sympathetic but entirely pragmatic approach to situations where emotions are running high is much appreciated by her clients.
Experienced in all aspects of separation, Aaron has a comprehensive knowledge on divorce, matrimonial finances, children act matters and domestic abuse injunctions.
He has extensive knowledge of separating parties that are key workers, assisting members of the Police Force, the Armed Forces and the NHS, and his knowledge and familiarity with defined benefit pension schemes leaves him well placed to cut through technical jargon, explaining the facts and putting his clients at ease.
With a comprehensive knowledge of private children act proceedings, Aaron is well versed in all facets of private children applications ensuring that the needs of the children are what are considered first and foremost.
He has assisted many clients in securing much-needed protection from abusive ex-partners and family members, and is well-versed in applications for Non-Molestation orders to protect clients from intimidation and harassment, as well as applications for Occupation Orders addressing the right to occupy the dwelling home.
Heather graduated with First Class Honours in Law from the University of Leeds and gained her LPC from BPP Manchester.
She has worked on a wide variety of family law cases, including parental alienation, international divorce and child contact as well as regularly working on cases involving assets in excess of £1 million.
Heather has already forged a reputation for academic rigour, excellent communication skills and an empathetic approach.
Early in his career George chose to focus on Family Law, and has worked in various areas of that specialism, including private law children, and divorce and finances.
“I find family law incredibly rewarding: there is something special about picking someone up from a bad situation and helping them towards a good one,” he says.
Outside of work George has fundraised for many years for the Help for Heroes charity and has a genuine interest in working with military and police personnel, the latter because of close family ties to the Met. He is a keen rugby player, and is also a qualified referee.