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    What does the Autumn Budget mean for Family Law?

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    Labour’s first budget in 14 years was delivered on 30th October 2024, bringing in significant changes for tax particularly. But what does this mean for family law, and people going through divorce and relationship breakdown?
    Capital Gains Tax 
    One of the biggest changes for couples going through divorce is the increase to Capital Gains Tax (CGT). From the end of October 2024, the tax rates will have increased from 10%-18% for basic rates taxpayers, and 20-24% for the higher rate taxpayer.
    This significant rise is likely to impact a wide spectrum of couples who have assets where CGT will be applied upon sale. For example, couples with investment properties, second homes, stocks outside Isas and even collections of jewellery or artwork will be affected.
    The increased rate will mean any assets sold as part of the financial agreement will be subject to more tax. This reduces the overall profit from sale, shrinking the matrimonial pot and therefore how much is available to share between the separating couple.
    Where couples are amid their financial negotiations, it is best to seek expert legal and financial advice to fully understand the effect that this change might have, and where adjustments might need to be made before making a final settlement.
    If the ex-couple has finalised their financial consent order and it has been approved by the court, unfortunately the agreements made within this settlement will be legally binding. Once a financial order is made by the court, it is extremely difficult for it to be amended, so the ex-couple may be faced with less income from yet-to-be sold assets.
    If you are already divorced, with a financial settlement in place, you may be able to make an informal agreement with your ex-spouse based on the updated income you are likely to get from CGT-applied assets. However, your legal arrangement will still stand. If you have concerns, please contact an expert financial adviser.

    Inheritance Tax
    In the weeks leading up to the Budget, the media reported a number of expected changes around inheritance tax. However, the Chancellor announced that inheritance tax rates would continue to be frozen for the next two years.
    Although this does mean no change yet to lower the nil-band rate, the further freeze will mean that an increasing number of people will be subject to greater tax liability as the value of assets increases over time. This therefore means their beneficiary receives less in the way of inheritance.
    Please speak to an expert financial adviser
    Private School VAT
    From January 2025, the VAT exemption currently applied to private schools in England and Wales will be removed, meaning some schools may have to increase their fees. This could well have a direct impact on divorced couples, and those currently negotiating settlements. Where private schools feature, fees should always be included as part of a settlement. However, if these fees rise by 20% because of the removal of the VAT exemption, further negotiation may be required.
    It is important to note that if the rise in school fees means there is not enough money to share between the separating couple, a judge is likely to require that the children be moved out of private education.
    Parents who have sealed agreements will be bound to these, although it may be possible to make an informal arrangement and ask the non-paying parent for more money. Where this is refused or impossible, children may need to be moved into state education.
    Conclusion
    If you are currently going through divorce, please seek expert legal and financial advice to understand the potential impact of the autumn budget on your negotiations.
    If you struggle to make progress in discussions with your ex, mediation and other non-court resolution methods can be very helpful. Talk to an expert family lawyer about your suitable options.
    Useful Links
    How to protect your money during divorce
    Private school fees after divorce
    Do I need a financial settlement?

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      New report calls for fairer outcomes for victims of domestic abuse in financial remedy proceedings

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      Resolution has recently released a new report offering insight into the interplay of domestic abuse and financial settlements in divorce, making recommendations for better protection for victim-survivors.
      Resolution is an organisation made up of family justice professionals who work with families and individuals to resolve disputes and issues around familial breakdown in a constructive way.
      The report calls for a cultural shift in the family justice system to better meet the needs of victim-survivors of domestic abuse, particularly when they are seeking financial resolutions upon divorce. The organisation conducted a survey of 500 family justice professionals, where 80% of respondents felt domestic abuse as not sufficiently considered by the court when deciding financial outcomes in divorce.
      Resolution have made a number of recommendations to help improve the experience of domestic-abuse victim survivors going through financial proceedings and reduce the long-term financial and emotional impact of divorce.
      There has also been discussion around the amount of ongoing abuse that occurs from the point a couple separates until the Court makes orders, particularly where perpetrators use the system to abuse their ex-partner further, economically, and emotionally.
      Judit Kerese, an Associate at Stowe Family Law, responds to the recommendations made by Resolution.
      The report has been a long-overdue insight into a system that currently is failing victim-survivors of domestic abuse. It is clear that family law professionals are aware of the desperate need for change. The recommendations, therefore, are welcome.
      It is all too common for perpetrators of domestic abuse to be in a position where they can assert financial control over their victim and continue to behave in a way that will either lead to victims not pursuing what they are entitled to upon separation, or simply having to be subjected to ongoing bad behaviour.
      One of the most significant recommendations is to amend the overriding objective of Part 1 of the Family Procedure Rules 2010 to mean that dealing with a case ‘justly’ means to ‘ensure the parties are safeguarded from domestic abuse’. Many victims of domestic abuse suffer from financial abuse in the short term, and often return to their abuser due to fear of financial stability. Ensuring parties are protected throughout proceedings will hopefully minimise cases of this.
      Further, the recommendation of amendments to the Financial Remedies Court Efficiency Statements to include specific reference to the need to ensure that financial proceedings are not used by perpetrators to facilitate domestic abuse, is a welcome change. There should be robust measures in place to prevent such behaviour, and ensure, as with changes to the overriding objective that victim-survivors are safeguarded.
      However, there is still a way to go, and some recommendations need more attention. For example, increasing legal aid rates to help legal aid providers be sufficiently funded to act for victim-survivors. Although legal aid funding is limited, this could add additional pressure to domestic abuse victims, many of whom are not able to meet the payments already required. This may result in victims feeling trapped with their abuser due to financial worries.
      The Government’s response remains to be seen. With a recent change in Government, and focuses shifting, it may be a while before we see real change in this area, despite the urgent need and renewed calls. I hope there will be implementation of Resolution’s recommendations before long, to offer proper justice to domestic abuse survivors.
      If you or someone you know is in immediate danger, please call the police on 999 or phone the Domestic Abuse Helpline 0808 2000 247
      Please note that Stowe Family Law cannot offer Legal Aid.

      Useful Links
      Economic abuse in financial remedy proceedings
      Read the full Resolution report

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      Property and divorce – Mesher Orders and Martin Orders

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      Dividing matrimonial assets after divorce is difficult at the best of times, but what options are there when there’s not enough money for both parties to rehouse independently Mesher and Martin Orders are legal tools used in divorce and civil partnership dissolution financial settlements to manage home ownership and sales, helping to adjust finances when dividing matrimonial assets.

      They each address situations where there isn’t enough money available for both spouses to rehouse themselves by deferring the ‘clean break’ element of a divorce financial settlement and allowing one party to remain in a property whilst the other retains their interest in it.
      Because the parties retain their interest in the property even after their marriage has ended, both orders are complex and typically suitable only in specific circumstances.
      Here we explain the differences between the two orders and the scenarios in which they may be used.

      What is a Mesher Order?
      A Mesher Order allows for a delay to the sale of a property for a finite period of time, or until a specified event occurs in relation to the children of the family, enabling one party and children to continue living there.
      Importantly, under a Mesher Order, the home remains jointly owned by the former spouses, even after the divorce has been finalised. Each partner has a defined share, and it is possible for both parties to continue to be responsible for mortgage payments, maintenance, and insurance.
      Mesher Orders are often used when one partner wants to stay in the family home with the children of the family, but they don’t have the financial means to take over the mortgage alone or rehouse themselves in any other way.
      The ‘triggers’ for a sale will often include specified events such as:

      The couple’s youngest child turning 18
      The youngest child completing secondary education
      The resident partner remarries
      The death of the resident partner.

      At this point, the order will trigger the sale of the property, and the proceeds will be split between partners according to the agreed shares within the divorce financial settlement.
      What is a Martin Order?
      A Martin Order similarly allows for a delay to the sale of a property but enables one partner to have the right to live in the property for their lifetime or until they remarry.
      Unlike Mesher Orders, a Martin Order is not dependent on the age of children, so these orders are typically used to settle the division of assets of divorcing couples without dependent children.
      Martin Orders are appropriate when one partner would be unable to rehouse themselves if the marital home were sold. It must also be established that the other partner has the financial means to meet their housing needs, has other properties that provide sufficient housing or does not need the capital from selling the marital home to support themselves financially.
      Rather than being linked to the ages of a couple’s children, the trigger events that can result in the sale of a property involved in a Martin Order include:

      The resident partner re-marries
      The resident partner moves in with a new partner
      The death of the resident partner.

      Are they a good idea?
      It depends on the circumstances. Mesher and Martin Orders are often a last resort. Instead, where possible, it can be better to sever financial ties between divorcing couples to help avoid future problems when the property is sold.
      It’s crucial to get legal advice before making any decisions, as there may be other options available that would achieve a better financial outcome for you.
      Unsure how to manage property division in your divorce settlement?
      Divorce and Civil Partnership financial settlements can have a long-lasting, material impact on your life. Choosing the right path is complex and varies from couple to couple.
      Our specialist family lawyers can help you avoid pitfalls by offering an expert assessment of your divorce finances and the full range of options available, so you can move forward with increased certainty.
      More divorce finances resources
      Stowe Support – Finances
      Divorce and property: what you need to know
      What happens to the family home when I get divorced? More

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      A Beginner’s Guide to Divorce

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      The thought of divorce, and all it entails, can be overwhelming, whether you made the decision to end your marriage, or it was made for you.
      There are so many things to consider, aside from the straightforward legal process of getting divorce, including separating finances, and making child arrangements. On top of the practical elements, there is the deeply emotional side of divorce.
      For ease, we refer to marriage, divorce, and ex-spouse, but the same applies to ending a civil partnership with dissolution.
      We explore all this in depth in our How To Handbook: A Beginner’s Guide to Divorce.
      How to get divorced?
      The legal process of ending your marriage is the same for everyone, and unfortunately there is no quick way of doing it. You need to apply for divorce online (or send the form via post). You can do this as a sole applicant, or jointly. Once you have both acknowledged the application, you have a 20-week cooling-off period.
      After this, you apply for your Conditional Order (previously the Decree Nisi), which means the court approves your divorce. Once this has been granted, you have another 6 week wait until you can apply for your Final Order (previously Decree Absolute). When the family court grants this, your divorce is finalised, and your marriage is legally dissolved.
      Whilst this seems like a long time, it is a good opportunity to get all your arrangements sorted for life post-divorce. Most couples use this time to negotiate their finances and get a financial consent order drafted, to be approved by the court.
      Arranging your finances in divorce
      Money is often one of the most problematic aspects of divorce. However, whilst it can be an area of dispute, there are methods of negotiating a financial settlement amicably. For example, some couples use mediation, or another form of alternative dispute resolution.
      Our Divorce Calculator can give you an initial idea of what you might receive in a financial settlement based on the information you input. However, it is important to discuss your arrangements with a family lawyer, and a financial adviser if necessary.
      It is highly recommended that you get what is known as a financial consent order in place before you are granted a final order and your divorce is finalised. There are several risks to not doing this, including leaving yourself vulnerable to future financial claims from your ex.
      A financial consent order explains how your money, property, pensions, and other joint and personal assets will be separated after divorce. A court needs to approve the consent order, and it is important that the document is drafted by an expert family lawyer.

      Child arrangements
      Making child arrangements can be emotionally and practically taxing. It is always preferable that separating parents negotiate a parenting plan between themselves, although you can always seek legal support for this.
      If you are unable to make arrangements between yourselves, you may need a form of dispute resolution, or court intervention.
      A child arrangements order is a court order which explains the agreements made by the parents on who is responsible for the child, where they will live, and time spent with each parent. It is a legally binding order.
      Emotional wellbeing during divorce
      Divorce is rarely a walk in the park. It is important that throughout the process, and beyond, that you seek emotional support if and when you need it.
      This can be in a form to suit your needs, for example therapy or counselling, or asking for help from your GP.
      Divorce coaching is a great, and tailored, support system for those in pre-divorce stages, throughout the divorce process and afterwards. A divorce coach works alongside your legal team to provide emotional and practical help.
      You can find out more about divorce coaching, and our Stowe Family Law partner divorce coaches here.
      Most people are ‘new’ to divorce. Our Beginner’s Guide to Divorce Handbook is an in depth resource to help you get started, give insight into the various obstacles you might come across and guidance on where to find help. We cover how to choose a lawyer, the legal process of divorce, negotiating finances, child arrangements, emotional support as well as debunking divorce myths.
      Download the guide here.
      Useful Links

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      Navigate the Complexities of Separation and Divorce with Family Mediation

      What to do if you think your marriage is over More

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      AI relationships: Can I marry my AI girlfriend?

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      Relationships are rarely always easy. They take work and they can be a bit of a rollercoaster.
      This might be one of the main drivers behind the rising trend of AI relationships, which are becoming hugely popular in a society that relies so heavily on technology. Statistics from whatsthebigdata.com revealed that 47% of users of one of the most popular AI dating sites would have an AI girlfriend for a long-term partnership, and there are 12 AI girlfriend apps, with over 1 million monthly users.
      Another trend is working in parallel; dating apps like Tinder are using AI to help users tailor their profile and create the perfect messages to send to potential matches. There is also a new service offering a chatbot version of the user themselves who messages the potential match on their behalf to see if they would make a good fit, before they connect as real humans.
      But what are the laws around AI girlfriends, and how is the trend impacting modern day relationships?
      Why would you have an AI girlfriend?
      Lots of people are choosing to have an AI girlfriend to combat what is being termed the ‘loneliness epidemic’. AI partners are there for a conversation whenever you need them, whether at home, on the commute to work, or at the gym. This can help users feel less lonely and almost as though there is a real listening ear.
      The chatbots are clever – the more you talk, the better it gets to know you and learns how to tailor responses to things you would like to hear, and your unique interests. For some people, this removes the stress and anxiety around the unknown of a human partner who has their own mind.
      It can also be helpful for those who struggle with social interaction as it builds confidence in communicating.

      What are the cons of an AI girlfriend?
      Psychologists and other experts have argued that AI partners are gradually removing genuine interaction – something we need as humans to function. There are plenty of worrying tales, and social isolation has a huge impact on mental and physical wellbeing. Some consider AI relationships to be toxic, in the way that they can completely take over the user’s life, and the AI bot almost ‘love-bombs‘ the user.
      There is a danger that in using AI to create the perfect partner, expectations of real relationships become skewed, and disappointment in real people leads to a cycle of continuing with the AI relationship, and lack of human interaction.
      Is it legal?
      AI girlfriends, and other AI partners, are legal if you meet the minimum age requirement for the app or website. Most of these sites require you to be 18 because they collect personal data.
      But what happens if the ‘relationship’ is successful. Can you marry an AI partner?
      Put simply, no. In UK law, you cannot marry an inanimate object, or a robot. However, there are several grey areas in English law, including consent. Both parties have to consent to the marriage and also must have the capacity to consent.
      Does AI have the capacity to consent? As they are only ever exposed to the user, there is potentially not enough remit for them to consent to marriage as they have not experienced enough of the world to make a genuine choice about their marriage partner.
      Nevertheless, you can have a symbolic marriage, which is not recognised as a valid marriage, but may be meaningful.
      Modern relationships
      Although marriage with robots, and inanimate objects, has long been in discussion, there has never been a clear answer. Many anticipated that eventually, technology would become smart enough to hold real relationships, and we see it in the movies all the time.
      Trends are changing, and whether this is good or bad is still to be discovered. Relationships are kept on a pedestal, with many people wanting to find a perfect partner and perfect relationship that does not exist… except when it is tailored exactly to our wishes.
      Will we see AI marriage in the future? And what will this mean for divorce? Are there any assets to divide? Will the laws have to change to keep up with the shifting relationship landscape? More

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      Transparency Pilot expanded to include private family law cases

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      The Transparency pilot in a select number of family courts has been extended to now allow accredited journalists and legal bloggers to report on what they see and hear in private law cases, including children matters. This is another significant step in enhancing transparency within the family justice system and building trust and confidence.

      Background to the pilot
      The pilot was originally launched by the Family Division’s Transparency Implementation Group in January 2023, initially in three courts, Leeds, Cardiff and Carlisle. The media were able to report on certain public law cases, within specific regulations and under anonymity rules. In January 2024, after a ‘pioneering year of reporting’, the scheme was extended to sixteen further courts, including Liverpool, Milton Keynes and Dorset. In addition, private law cases were opened to the media in the original three courts.
      The Transparency Pilot aims to improve trust in the court system, and by encouraging journalists to witness cases, the hope was that journalists would use their rights to raise public awareness of the workings of the family courts.
      Although there have been concerns about the potential discomfort the presence of journalists could cause to families going through a court case, the pilot is being carefully monitored by the Transparency Implementation Group, with strict anonymity rules.
      The pilot has already seen significant successes and coverage, including a mini-series on BBC Radio 4’s Today Programme, the Press Association, BBC news, the Sunday Times, and the Guardian, to name just a few. In after the first year, President of the Family Division Sir Andrew McFarlane hailed the pilot as a ‘pioneering year of reporting’.
      Extension July 2024
      As of 15th July 2024, the pilot has been extended to now allow reporters access to private law cases, including children matters, in the latter sixteen courts. The control measures remain in place, and reporting is at the judge’s discretion, and if permitted, will be under a Transparency Order, protecting families and specifically children.
      The judiciary is committed to fostering a better understanding of the family justice system and improving confidence in it. The pilot aims to provide insight into the handling of public and private law cases, considering that one of the biggest barriers to people seeking legal help is the misinformation around court and legal processes. More

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      Changes to Family Procedure Rules

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      From 29th April 2024 there will be changes to the Family Procedure Rules (FPR). The current rules have been in place since 2010 and are being updated to place greater expectation on courts, family practitioners and families going through breakdown to use non-court-based methods to resolve financial and children matters.
      What are the FPR?
      The Family Procedure rules govern the process and procedures used in the family court system in England and Wales. They are governed by a committee, the Family Procedure Rule Committee.
      The Rules provide practice directions – essentially how the family courts should run, the powers the Judge has, forms, documentation, etc. They standardise court procedures and practice across England and Wales.
      What are the changes?
      The FPR are being updated to include a new, wider definition of non-court dispute resolution (NCDR). Previously, this has focused on mediation, but will be extended to encompass methods such as collaborative divorce, arbitration, and private financial dispute resolutions.
      The main thing divorcing couples will need to be aware of is that they will now need to set out their views on NCDR in open correspondence, alongside a signed statement of truth. They will be asked to genuinely consider out-of-court methods.
      A failure to engage with NCDR without good reason (for example, the case involves domestic abuse), will likely have cost sanctions, and may affect who pays the litigation fees in financial dispute cases.
      Circumstances that qualified for mediation exemption will also be narrowed.
      Courts will also have the power to adjourn proceedings if the Judge feels that NCDR would be appropriate, allowing time for the couple to engage in a form of NCDR. This can now happen whether the couple agrees to it or not.
      These changes will mean a considerable cultural shift, helping couples explore ways of resolving their disputes without going to court.
      The aims are:

      Support amicable dispute resolution
      Support the wellbeing of children by keeping matters out of court
      To relieve pressure on the courts

      What options are there for non-court dispute resolution (NCDR)?
      Divorce is rarely straightforward, and no two cases are the same. Your solicitor will be able to explore your options of NCDR with you at your first consultation to see which, if any, will be appropriate in your unique case.
      Some examples of NCDR include:

      What does this mean for me going through a divorce?
      The key thing to be aware of is that you will no longer be able to simply tick a box to say that mediation is not appropriate for your case. Where NCDR is not possible, you will need to explain to the court why this is.
      Failure to engage in NCDR without a valid reason will likely come with cost sanctions.
      This is part of a wider drive by the Ministry of Justice to support families going through relationship breakdown by ensuring they are fully informed of the options available to them and supported throughout the process.
      Useful Links
      Court Fees Rising May 2024
      A Guide to Financial Dispute Resolution More

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      Family Court Fees to Rise

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      The Family Court fees are expected to rise soon, as a result of the Government’s proposal that court fees should increase by up to 10% in 2024. It is anticipated that these changes will happen in April 2024.
      The Ministry of Justice has stated that ‘implementing increases to court and tribunal fees is vital to our ongoing work to protect access to the courts for all those who seek justice.’
      The aim is to ensure that the courts can be properly resourced, as the increases will generate between £34 million and £42 million a year.
      Court fees have not increased since 2021, and the incoming change is to ensure that the courts can keep pace with increased costs, as well as improving service and reduce the taxpayer’s costs. The increased income will also support in subsidising the cost of the free services offered by the family courts.
      Prospective changes will include changes to the cost of getting a divorce or civil partnership dissolution, as well as price increases for child arrangements orders, financial orders that are not by consent, and applications for parental orders.
      Below we break down the changes.
      When the changes come in, the cost of a divorce/civil partnership dissolution application is set to rise from £593 to £652.
      Child arrangements orders will also see an increase in cost, rising from £232 to £255. Child arrangements orders are put in place by the court to set out responsibilities regarding children, including their living arrangements and their contact with both parents.
      Other children issues will also see the same cost increase, including orders such as Specific Issue Orders, Prohibited Steps Orders and Special Guardianship Orders, as well as applications for parental orders.
      The cost of an application for adoption, or permission to apply for adoption will rise from £183 to £201.
      A financial order application, not by consent, will see a cost rise from £275 to £303.
      In addition, financial consent orders are set to rise from £53 to £58.
      The Government website has a full breakdown of all the fee changes. More

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      Pathfinder Pilot Scheme Expanded

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      Background and Purpose
      In March 2022, a pioneering pilot scheme, known as the Pathfinder pilot, was launched in some family courts in Dorset and North Wales to help improve information sharing between services such as the police and local authorities and the courts. It followed on from a review into the family justice system which concluded that the adversarial processes often worsened conflict between parents, retraumatising abuse victims and children.
      A crucial element of the Pathfinder pilot scheme is to enable local domestic abuse authorities to share important information with the courts, sparing abuse victims the painful process of retelling their experiences multiple times.
      In addition, the pilot aimed to ensure that children are listened to at every stage of the family justice process when going through their parents’ separation. Children were to be given more opportunity to explain their feelings, what they want and, should a court order be made, to feedback on whether it was working for them.
      How the Pathfinder Pilot works
      The Pathfinder pilot was launched in Bournemouth and Weymouth in Dorset, as well as Caernarfon, Mold, Prestatyn and Wrexham in North Wales initially.
      The piloted model involves more detailed initial investigations being carried out by the Children and Family Court Advisory Support Service (Cafcass), an independent body advising family courts on what is safe for children in family law processes. In most cases, this has involved speaking to the children involved in cases before the first hearing even takes place.
      Furthermore, the pilot has introduced a better integration system between agencies, such as domestic abuse organisations, and organisations specialising in mediation, and the courts, in order to best serve the families.
      The process involves:

      An early ‘gatekeeping’ hearing to look at the information
      Cafcass investigate any welfare issues and identify whether the family might benefit from another form of dispute resolution and can avoid court
      Cafcass will speak directly with the family and identify any families which have a domestic abuse risk
      Where appropriate, Cafcass will also speak with children early on in this process to understand their feelings and wishes

      The aim is for Cafcass to help families avoid court entirely, or, where this is not possible, to find a solution at the first hearing. The judge then reviews all the information and can request further documentation before the case reaches court.
      The idea has been to encourage a less adversarial process, keeping conflict out of the courtroom, and emphasising the investigation of issues, including allegations of domestic abuse.
      The Future of the Pilot
      The initial phase of the pilot reached its conclusion in February 2024. It has been announced that it will be expanded to two further locations, Birmingham and South-East Wales, before a national roll out.
      Phase 2 is due to launch in May 2024.
      Stowe Family Law Partner Rachel Fisher said this of the news that the pilot has been extended:
      “It is a really exciting development to see the expansion of the Pathfinder Pilot following the end of Phase 1 with the scheme now been expanded to South East Wales and Birmingham before hopefully a national rollout and the feedback reported has been extremely positive.
      This new Cafcass process is welcomed by professionals and families as a streamlined process with less delays for children who are at the centre of these disputes. The aim of the Pathfinder Pilot is to ensure that the voice of the children involved in each case is heard and to ensure that trauma to children and victims of domestic abuse is reduced as far as possible, which can only be in the children’s best interests.
      It is positive that the Pilot is being extended so that more families can benefit from the process which sees the court actively working with other local organisations and agencies to ensure matters are progressed promptly and with all the information being available to the court at an early stage through the in depth information gathering exercise at the outset by Cafcass to support a problem-solving approach to resolving arrangements for children.”
      In addition, the Government recently announced a pilot, due to launch in summer 2024, trialling a scheme publicly funded early legal advice for parents/carers. This advice will allow parents to make better informed decisions regarding their children when it comes to separation.
      The pilot aims to help separating parents resolve disputes without court intervention. The Pathfinder pilot will be important for those cases which do get to court. More