Marilyn Stowe Blog

Announcing the Summer Competition winner: what next for the Chocolate Box Family?

Earlier this month I gave you, my readers, a fictional scenario.  I described a family falling apart at the seams, and asked what advice you would give them. Could this marriage be saved and if so, how? If Tom and Gwen divorced, what would a fair financial settlement be, and how could they best prepare their three children?

The entries flew in thick and fast and I would like to thank each and every one of you for taking the time to enter. There were some wonderful entries and ideas and, before I announce the winning entry, I would like to give my own thoughts on this fictional family’s situation.

I’m going to put myself in the position of the husband’s lawyer. Sometimes as a lawyer you have to give bad news and it’s probably best to do this in a straightforward way. You owe a duty to your client to be upfront and to not pull any punches. A sensible lawyer will also advise their client with a degree of caution. No lawyer wants to be in a position in which “gung ho” advice bears scant resemblance to the ultimate outcome, and results in a client complaint.

So how would I advise Tom in this situation?

I would take a deep breath and tell Tom, with regret, that if he gets divorced his finances will be seriously affected. As for his desire to retain his inheritance, obtain half of the rest and presumably oblige his wife to go out to work, he can forget it.

In reality, the court will divide all the income and capital, in order to meet the reasonable needs of the parties, taking into account the factors set out in section 25 of the Matrimonial Causes Act 1973. I would read these to Tom. They are straightforward and easy-to-understand determining factors, on which a court makes its decision.

The court does not apply percentages, as many readers have suggested, but rather looks at quantified requirements. This is why, for readers going through the divorce process, it is always essential to make sure those requirements are polished and well set-out when completing the Form E.

A judge with a reliable “shopping list” to work from can then move on to the next task: how to meet those requirements out of the available assets. Overblown and exaggerated requirements are sometimes mistakenly included into a Form E. Sometimes the opposition states “Nil” in relation to the value of company shares, which they know full well to be worth a small fortune. Both of the above should be avoided. Instead, the judge will appreciate real assistance in resolving the issues.

Gwen will, in accordance with section 25, be given “credit” for the long marriage and her equal contributions to it. No distinction will be made between her homemaking and Tom’s breadwinning, as many readers clearly know.

Although the provenance of the £200,000 is a relevant factor, as it is Tom’s inheritance, it is still taken into account by the court and is not ignored. But can it be sidelined for Tom? I don’t believe that the court will be impressed with Tom’s desire to move to Central London, given that his travelling expenses are currently paid and house prices are more expensive, unless Sonia will be contributing to the cost. But as she will have her husband and children to house, I doubt that she will have much free capital left either.

What about Gwen?

Gwen will have to continue her obligations and responsibilities to bring up the children, and will therefore have needs for a four-bedroom home to suit the family, minus Tom. She lacks an income capacity and, although the court will consider whether she can reasonably earn her own income, I think the court will find that whatever she sets her hand to do, it is unlikely to be sufficient to affect Tom’s obligations to maintain her.

Given Gwen’s age, the length of the marriage and the fact that she gave up her own promising career a long time ago, there will be no cut-off point. It is likely that her maintenance from Tom will be lifelong. Furthermore, there will have to be continuing maintenance payments because there won’t be enough capital to buy Gwen a clean break for her maintenance using Duxbury. Given all this, Gwen cannot be expected to obtain a mortgage. It therefore seems that Tom’s inheritance will be needed in full to meet the reasonable needs of the parties. As a result, his inheritance will not be excluded as he hopes.

Savings, pensions and income

I expect the award to Gwen will be sufficient capital out of the pot to buy her a house outright. That figure will depend on the cost of smaller properties in the area but will be big enough to rehouse Gwen and the three children. The court will then add in a sum to the cost of removals, legal fees and stamp duty and perhaps for modest refurbishment and a new car. Whatever is left (including the £100,000 savings in Gwen’s name) will go to Tom, but I suspect the figure Gwen will receive will be in the region of about £500,000. This means that there won’t be an awful lot left for Tom because there are also legal fees to pay on both sides and, although each party bears their own costs, the fees will all probably come out of the top slice of capital.

As for the pension: the figures will need to be carefully considered to determine what they would likely produce for each party on retirement. In order to calculate this, the assistance of a pension expert may well be required. The court may take the view that in the future, Gwen can trade down in terms of housing and apply some of the capital towards her income in retirement.

Tom can certainly expect to see around half his earnings being used for maintenance of Gwen and the children, the basic award for child support of the two younger children being 20 per cent of his net income. There are also the school fees to pay, if they can still be afforded, and the judge may have to decide this depending on how much it will cost Tom to provide for his own housing and living requirements. Therefore, the possibility of the children leaving their private schools cannot be discounted. The oldest child, William, is about to start a gap year – but when he begins university, he too will be able to ask Tom for financial assistance.

Conclusion

If the couple divorces, Tom will come out of the divorce a poorer man. His capital will have shrunk and he will have substantial maintenance payments to make for as far ahead into the future as he can see. Not only that, the entire family will be facing upheaval and uncertainty. The court does have the power to charge a percentage of the house back to Tom, but I doubt it will happen. I also doubt that the house would remain unsold, as Tom has to be rehoused somehow and needs a deposit for the property.

Based on this assessment, and given that William is distraught and Gwen is in denial, would you advise Tom to go ahead with divorce, unless he felt there is absolutely no alternative? Wouldn’t the best advice be to try and save his marriage and change trains to avoid Sonia? Or perhaps even change jobs and end his relationship with her as fast as he can?

Highly Commended

So, there you have it! Those are my views – but of course, there is no single correct answer here. Many of you thought otherwise, and some excellent entries showcased a variety of viewpoints. Here are a few of my favourites:

I would firstly give Tom a major reality check and tell him to take off his rose-coloured glasses. I would set his expectations that he is unlikely to come out of the divorce with very much either financially or emotionally. As the marriage is a long one and they have “agreed” that the wife should give up her career to look after the children and bearing in mind the youngest child is still only 7, he will potentially be paying joint lives maintenance for a very long time…

-          To vary or not to vary…

If all else failed, I think a 60/40 split of all assets in favour of Gwen would be sensible as Tom has the earning capacity to secure mortgage lending whereas Gwen doesn’t. In addition I think Gwen should receive a proportion of Tom’s income for life or until she remarries plus a pension provision. That proportion should be looked at on the basis of her needs and expenditure during the marriage, providing that it isn’t excessive or disproportionate to Tom’s income…

-         Nicki

I’d say to both Tom and Gwen “grow up”. Tom is acting like a spoiled child – he feels neglected because there are newer children who take his wife’s attention away from him and he feels like others are sharing with his toys and he wants them back and all to himself (his inheritance which was invested in the house.

On the other hand, Gwen is acting like a child herself, hiding from the truth and pretending that if she puts her hands over her ears and says “la, la, la I can’t hear you” then nothing can get through and make her recognise the problems the family is having. She needs to realise that she’s living a charmed life at the moment and she needs to work if she wants to keep it that way…

-          Sue Willshee

…Tom is in a panic. The first thing necessary is to dissipate that with confident advice. Pure divorce advice is not all that is needed. I think that the marriage could be saved and Tom’s relationship with his children brought back from the brink if the truth comes out. Carefully gleaning the facts from Tom is important in facilitating any discussion of resolving the situation. Each relationship that he has should be dwelt upon. For instance, Tom has not been seeing Sonia for very long and she is pushing him to leave his wife first before she makes any move in respect of her own marriage. This is selfish and panic-inducing; it has brought the situation to a head. Is Tom really committed to this relationship with all its uncertainties and the likely problems it would cause with his relationship with his children? Is it worth it? Only he can decide this, but a lawyer can help bring in some focus and careful thought…

-          Lindsey

This marriage is already dead,
There’s not much more to be said.
As the innocent spouse,
The wife gets the house,
The kids, a car and the bed.
Alimony he must pay,
Tell the kids he’s going away.
Then off to London he’ll go,
Though the wife is telling him “No”.
Unequal shares to man and wife?
Tough – that’s life!

-          Judy Beba-Thompson

The Winning Entry!

This entry is one that, for me, stood out. It suggested a complete change of direction for the family, allowing Tom and Gwen to avoid a messy divorce and keep their finances in check.

I suggested that the best solution would be to advise Tom to end his relationship with Sonia, and for Tom and Gwen to work very hard to save their marriage. Lindy Hine’s entry suggested something similar, but even more radical…

My advice is – they sell that big house thereby releasing £600,000 to add on to the £100,000. Tom packs in his job and ships the family off to Cornwall to a lovely cottage by the sea and gets a consultancy job working from home, finds a little time for himself and learns to relax and enjoy life. Gwen finds a new zest, perks up both herself and her outlook on life and gets a job in a local art gallery which she loves. The kids settle in nicely at the local schools and flourish and enjoy doing things as an entire family with a father who has more time for them. Tom and Gwen both realise that there’s more to life than maintaining a so called high standard of living that doesn’t make them happy and find joy in walking the dogs along the beach together. Tom forgets high flying Sonia after realising that a woman who was prepared to dump her two young kids might do the same to him if she got bored of him…..

The Perfect Non-Divorce and the perfect new start for the Chocolate Box Family!

-          Lindy Hine

Well done Lindy! I will be in touch to arrange the dispatch of your prize of champagne and chocolates.

Thanks again to everyone who entered.