A gentleman in his seventh decade returns from his holiday cruising the Mediterranean and enjoying the hospitality of the Captain’s table. He discovers his assets and bank accounts have been frozen by order of the Family Court. The application has been made by his former wife, from whom he was divorced twenty-five years previously. Does this sound far fetched? Absolutely not, as this client instructed me.
Some twenty-five years previously, this gentleman lived in London with his wife. They were tenants in a council owned property in South West London. They had meagre assets. They each consulted a local high street solicitor who dealt with divorce proceedings. The Decree Absolute was pronounced, which dissolved their marriage. Their personal chattels were divided by agreement. They were advised that as they had no further assets of note, and by this time wife had moved out of the council property and obtained a property of her own, there was no need to progress with an application for financial relief.
The government then introduced the right to buy scheme. As this gentleman had been in occupation of the property for many years, and now had the tenancy in his sole name, he was able to apply for a significant discount which enabled him to purchase the property from the local authority. The only requirement was that he would have to occupy the property for a minimum of five years before selling the property he would have to repay the discount. The gentleman occupied the property for many years. In his seventh decade, he decided to sell the property and to travel. During this time, property inflation had resulted in a significant rise in the value of the property which, of course, this gentleman had purchased at a low market value and subject to the maximum discount available. This gentleman travelled extensively and enjoyed a level of luxury he had never experienced before. That is until he returned home to find his assets had been frozen.
It is important to remember that Decree Absolute dissolves the marriage, it does not prevent either party from making financial claims against the other. Such claims are not time limited. There is no limitation period. In the absence of an order of the court providing each party with a clean break, financial claims against each other remain open.
I was able to argue that wife’s financial claims should be significantly discounted given the period of time which had elapsed following the dissolution of the marriage, but nevertheless, this gentleman did need to pay his wife a modest lump sum, and an application was required in order to un-freeze the assets. Therefore at a time of his life when this gentleman had surely earned the right to enjoy travel and freedom without financial worry, assets were subject to investigation by the court until an order was made by the Family Court in which this gentleman had to pay his former wife a small lump sum.
Incidentally, the friendly local solicitors who had provided advice were no longer trading and therefore this gentleman had no right of recourse against them for poor advice.
When advising clients in relation to financial matters, it is always important not only to understand the history of assets, how they have accrued and their provenance, and the present state of affairs, but also keep an eye on the future. A cautionary tale for all advisers and clients.
For more information please contact our Family Team.