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Capitalisation of Maintenance

  • harriet voom
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26 Mar 12 #320194 by harriet voom
Topic started by harriet voom
My husband and I have been through a very long term and difficult situation with this ex wife. They separated in July 2007. After three FDR hearings, went to court in July 2009, the judgement was delivered in September 2009. Agreeing the Order was very challenging and a failure to agree required a return to court in 2010. Implementation of the order required a further hearing to be requested on my husband''s part. Even then he had to make further financial concessions because his ex-wife would still not comply with the order and it was becoming unaffordable to continue to go back to court (for example she refused to include the value of her car in asset splitting even though it was spelled out clearing in the order, etc).

The current situation is that the only part of the order outstanding is the settlement of the property assets. The former matrimonial home has not sold, with two or three sales falling through. Consequently the holiday home has not been valued and settled as doing so is contingent upon the former matrimonial home selling (and my husband intends to keep the holiday home).

Additionally as we both work for banks and due to the changing compensation structure at banks (from less variable to more fixed pay), there has been a reduction of the bonus as a percentage of total compensation. The way the spousal maintenance payments are structured, a monthly amount plus 15% of his annual bonus, has resulted in my ex-wife getting significantly less than she would have done had compensation not been restructured and it.

This effect, combined with the ongoing higher costs of remaining at the former matrimonial home (which he is paying until it is sold), is expected to lead to an appeal to vary the original spousal maintenance order which seems crazy as the order prescribes the additional amount on top of the monthly periodical payments he is to pay to make up for the higher running costs of that house. There has otherwise been no change in her needs. Ideally we would like to take this opportunity to structure a Clean Break settlement.

On what basis would a Clean Break or capitalisation be made? As there is a pension sharing order in place and the maintenance goes until he turns 60, we figured it would be to capitalise the monthly payments however that leaves the 15% of annual bonus unaccounted for but this is not a guaranteed sum. Also surely there is some value in receiving a lump sum today vs. payments over time.

Thank you very much for anyone who has time to lend some advice as how to approach this as we want to be sure our methodology would hold up if this has to go to court.

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