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(Financial) Proper Provision - Republic of Ireland

(Financial) Proper Provision - Republic of Ireland

When a couple decide to separate or divorce one of the primary difficulties often relates to how they divide their assets and financial responsibilities going forward.

Factors Considered by the Judge

The Court is directed to have regard to certain matters in deciding whether or not to make orders for ancillary reliefs in respect of maintenance, pensions, property, financial compensation orders and succession rights. The Court must have regard to the following matters;

  • the income, earning capacity, property and other financial resources which each of the spouses concerned has or is likely to have in the foreseeable future
  • the financial needs, obligations and responsibilities which each of the spouses has or is likely to have in the foreseeable future (whether in the case of the remarriage of the spouse or otherwise)
  • the standard of living enjoyed by the family concerned before the proceedings were instituted or before the spouses commenced to live apart from one another, as the case may be,
  • the age of each of the spouses, the duration of their marriage and the length of time during which the spouses lived with one another,
  • any physical or mental disability of either of the spouses,
  • the contributions which each of the spouses has made or is likely in the foreseeable future to make to
  • the welfare of the family, including any contribution made by each of them to the income, earning capacity, property and financial resources of the other spouse and any contribution made by either of them by looking after the home or caring for the family,
  • the effect on the earning capacity of each of the spouses of the marital responsibilities assumed by each during the period when they lived with one another and, in particular, the degree to which the future earning capacity of a spouse is impaired by reason of that spouse having relinquished or foregone the opportunity of remunerative activity in order to look after the home or care for the family,
  • any income or benefits to which either of the spouses is entitled by or under statute,
    the conduct of each of the spouses, if that conduct is such that in the opinion of the court it would in all the circumstances of the case be unjust to disregard it,
  • the accommodation needs of either of the spouses,
  • the value to each of the spouses of any benefit (for example, a benefit under a pension scheme) which by reason of the decree of divorce concerned, that spouse will forfeit the opportunity or possibility of acquiring, the rights of any person other than the spouses but including a person to whom either spouse is remarried.


The Family Home

A dispute in relation to the Family Home forms a substantial part of almost every application for Divorce. A Family Home is defined as "a dwelling in which a married couple ordinarily reside".
There are a number of orders that can be made in respect of the family home, the Court is empowered to make the following property adjustment orders:

  • The Court may direct that property be transferred from one spouse to another, or to any dependent family member, or to a specified person for the benefit of such a member.
  • The Court can direct the settlement of any property for the benefit of either spouse, or for a dependent family member.
  • The Court can direct an order which varies a previously agreed settlement of the property.
  • The Court can direct an extinguishment or reduction of any interest held by either spouse under any such settlement.


Other Assets

A dispute in relation to the Family Home forms a substantial part of almost every application for Divorce. A Family Home is defined as "a dwelling in which a married couple ordinarily reside".
There are a number of orders that can be made in respect of the family home, the Court is empowered to make the following property adjustment orders:

The Court may direct that property be transferred from one spouse to another, or to any dependent family member, or to a specified person for the benefit of such a member.

The Court can direct the settlement of any property for the benefit of either spouse, or for a dependent family member.

The Court can direct an order which varies a previously agreed settlement of the property.

The Court can direct an extinguishment or reduction of any interest held by either spouse under any such settlement.

Financial Compensation Orders

The Court also has the power to make orders in respect of life assurance for spouses and dependant children. The Court has the power to make a financial compensation order requiring either or both of the spouses to do one of the following:

  • Effect a life insurance policy for the benefit of the other party or any other dependant family member.
  • Assign such a policy in whole or in part to the other spouse or dependant family member.
  • Continue to discharge the premiums due on a particular policy.



Pensions

The pension entitlements of an individual and his spouse arising from occupational or personal pension arrangements may be adjusted on separation or divorce. The Family Law (Divorce) Act, 1996 sets out the treatment of pensions in cases of divorce proceedings.

A pension is a valuable matrimonial asset and on divorce is seen in the same way as any other asset. The Family Law Acts require pension benefits to be taken into account in arriving at a financial settlement in the case of a judicial separation or divorce. The Courts can decide whether or not it is appropriate to split pension rights in order to regulate a couple''''s financial affairs or, alternatively, to make an adjustment in respect of non-pension marital property. Thus allowance can be made in one of two ways:

  • by a Pension Adjustment Order; or
  • by making Orders in relation to some other assets (e.g. the family home or savings), which the Court considers will provide a fair overall distribution of the total assets involved.

A pension adjustment order can assist in proper provision for spouses on retirement. A pension adjustment order may be obtained in respect of either a retirement benefit and/or a contingent benefit. A contingent benefit is usually referred to as a "death in service benefit" and is paid to a widow, widower or dependent child of a pension scheme member who dies while in relevant employment. A retirement benefit is payable to a member of a scheme who dies after the attainment of normal pension able age. This money may also be payable to a widow, widower or dependent child on the death of the retirement member.

Succession Orders

The Succession Act 1995 provides that by virtue of his or her status as a spouse, a widow or widower is granted an automatic share in the estate of his or her deceased spouse. If a testator dies leaving a spouse only, then that spouse is legally entitled to one half of the estate. If a testator dies leaving a spouse and children, then the spouse has a legal right to one-third of the estate. A spouse is essentially provided for out of the estate of the deceased spouse regardless of the terms of his or her will.

The Family Law Divorce Act 1996 deals with the issue of Succession Act rights in the context of Divorce. The Act provides that if one of the spouses in respect of whom a decree of divorce has been granted dies, the former spouse may make application to the court to have provision made for himself or herself out of the estate of the deceased spouse. The Act continues to provide for the granting of what is known as a “blocking order”, i.e. an order directing that the aforementioned provision is not available to the spouse post divorce

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