Can divorce be a “meal ticket for life”?
England, particularly London, has long been dubbed the “divorce capital of the world” as English courts have in the past had a reputation around the world for awarding generous payouts to the financially weaker party in a divorce; financial awards made in other European countries are generally more limited.
Home-makers and breadwinners treated fairly
Whilst the starting point is a 50:50 division of assets, the courts apply an element of discretion. As English courts don’t generally discriminate between home-maker and breadwinner, they are regarded as being fairer. Although now increasingly less common, it is still possible for courts to order the payment of maintenance by one spouse to the other for the rest of their lives, giving rise to the use of the term “a meal ticket for life”.
Today there is a strong groundswell of legal opinion that believes that an award of maintenance by one spouse to the other spouse shouldn’t be expected to continue for the rest of their joint lives. Many query why one spouse should be compelled to keep making payments, whilst the other spouse isn’t expected to make any effort to maintain themselves.
A recent judgment
April saw judgment in Waggott v Waggott, a case involving the wife of a multi-millionaire. Here, the wife’s annual income needs had been assessed at a hefty £175,000 a year. Her former husband, William Waggott, argued that as he was making continuing maintenance payments, she had no incentive to get a job to support herself.
The judge ruled that the annual maintenance payments should cease after three years in order to achieve a clean break. He added that as Mrs Waggott had had a career in finance before her marriage, she should be able to find employment, saying “…it is plain to me that the wife would be able to adjust without undue hardship to the termination of maintenance payments”.
Where awards for life can be applicable
As ever, financial arrangements on divorce need to reflect the couple’s particular circumstances. For instance, where a long marriage comes to an end, and where the wife gave up a career to raise a family, but is now nearing retirement age and may not be able to return to work, then a joint lives maintenance order may be appropriate, especially if there is no capital available to the wife that could generate sufficient income.
Clean breaks more common
Today, the court is much more likely to order a clean break with no ongoing financial commitment, or will award the other spouse maintenance for a limited period only, allowing sufficient time for them to regain their financial independence.
Joyti Henchie, our Head of Family, affirms this view: “It’s vitally important to divide assets fairly. In society at large, there is a growing awareness and acceptance that it isn’t equitable on every occasion for a former spouse to have to pay maintenance for the rest of their lives. Neither would it be fair to leave a former spouse, whose employment prospects may be poor due to age or lack of employable skills, to face unnecessary financial hardship. Every case must be viewed on its merits.
Increasingly, spouses are being encouraged to make sensible financial decisions and take responsibility for their actions, working towards financial independence where possible. Depending on the circumstances, this can mean adopting a staggered approach to maintenance payments, with a clear cut-off date in place”.