Maintenance could be costly
BIRKETT Long is meeting an increasing number of people who have either paid, or have considered paying maintenance to support their spouse, following a divorce, without obtaining legal advice as to the ramifications.
The case of Mr Yates illustrates the problems that maintenance orders can bring. Mr Yates consented to a court order that he pay his wife a lump sum of £978,000 and spousal maintenance for three years. Understandably, he thought that after the three years allowed for in the order the maintenance payments would stop. He was wrong. Mrs Yates applied to the court to extend the years during which she was to receive maintenance and to receive a further lump sum immediately, capitalising her maintenance claim. The judges in the Court of Appeal understood Mr Yates' objections, but they felt that Mrs Yates' application was reasonable.
The court assessed Mrs Yates' reasonable outgoings at £3,500 per month and indicated that the period during which maintenance was due should be extended from three years to 15 years. Therefore, Mr Yates had to pay his ex-wife almost £400,000 in lieu of the extended maintenance order.
So why does the court have the power to order a lump sum and extend the period of maintenance? Spousal maintenance orders are designed to meet the recipient's (often the wife's) needs, taking into account the payer's own financial situation. However the parties' financial positions often change over time. The court has the power to deal with these changes by:
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Altering the amount of maintenance;
Decreasing or ending the period during which the maintenance is paid;
Extending the period during which the maintenance is paid unless there is a bar in the order preventing extension;
Ordering that a lump sum is paid in lieu of ongoing monthly payments.
You should consider your position before entering into a spousal maintenance order. Are you prepared for the order to be changed? If not, is there sufficient money available to give your spouse a lump sum now, in order to buy out their maintenance claims? Would it be advantageous to provide your spouse with other assets instead of maintenance? Can you include the legal bar preventing the court from extending the time during which maintenance is payable?
It is imperative that you obtain expert legal advice before committing to an order so that you can ensure your options are fully explored. Why not call our expert team of family lawyers to see how we can help?
Contact Emma Brunning at Birkett Long LLP on 01245 453846 or emma.brunning@birkettlong.co.uk.
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