The matrimonial home is usually the biggest and most important capital asset that a divorcing couple will own and there are many ways in which matrimonial property is dealt with by the Courts.
Selling the matrimonial home
If at all possible, the courts will try to achieve a clean break of the marriage meaning that the parties` assets are split between them after the divorce so that they can move on with their lives without being burdened or affected by any continuing arrangements involving the other party.
Of course sometimes a clean break simply isn`t practical and this is usually the case where there are young children of the marriage. If there is sufficient equity to purchase adequate accommodation which meets both parties` needs then the courts are likely to order the marital home to be sold and the sale proceeds divided equitably. If there is not enough money available to enable one of the parties to continue paying the mortgage and the outgoings then a sale is probably going to be unavoidable.
One factor for the parties to take into account when considering an order for sale is the economic climate at the time the financial settlement is made. At present house prices are fairly stagnant, if not falling, and it may therefore be financially beneficial in the long term for both parties to delay the immediate sale of the matrimonial home until such time as the housing market improves. This is sometimes not the most practical solution but it is still a financial consideration which is sensible to take into account in the current economic downturn.
Outright transfer of the matrimonial home
A transfer of the property simply means that an order will be made by the Court to transfer one parties` share of the property (both the legal and equitable title) to the other party. This would facilitate a clean break.
Such a scenario could arise when an ex- wife is granted a residence order in respect of the child/children to the marriage and the ex-husband has limited financial resources other than his share in the matrimonial property. In such circumstances it would be unlikely that he would be able to support his ex- wife and children and the best way of stabilising the children and the ex wife`s future both financially and emotionally would be for an outright transfer of the property to be ordered in her favour.
Other instances when an outright transfer of the matrimonial property could occur are when a spouse still residing in the family home buys out the other spouse. Alternatively, a spouse residing in the family home may wish to forego any entitlement to maintenance payments or pension entitlements in order for the property to be transferred outright to them because the main priority is to secure the family home. Clearly this would facilitate a clean break.
Trust of Land (Mesher Order & Martin Order )
When a home needs providing for one of the parties and the facts of the case do not allow for an immediate outright transfer of the marital home then it is possible to postpone the sale of the house until a future event is triggered. The most common orders of this type are called Mesher & Martin Orders, following the names of the legal cases that first established these legal principles.
A Mesher Order is a court order that postpones the sale of the matrimonial property until a specified triggering event occurs; a common example of such a triggering event is when the youngest child of the parties reaches the age of majority (18 years).
A key advantage of this type of deferred trust is that it enables one of the parties and most importantly the children to remain in the matrimonial home following the divorce and also enables the non-occupying spouse to retain a financial interest in the matrimonial home which can be realised at a later date.
A Martin Order is a similar to a Mesher Order but the trigger for sale is not dependent upon children of the marriage. The future sale of the house is triggered if the occupying spouse remarries, cohabits for a specific period of time, chooses to leave or dies.
Mesher Orders in particular have been criticised by some on the basis that they only delay the inevitable and often problems occur at the time the property is eventually sold. It may be the case that there is simply not enough equity in the property at a later date to allow the occupying spouse to be re-housed and sometimes obtaining a mortgage perhaps quite late in life simply may not be a realistic option.
Mesher orders can certainly be an attractive option in the short term but a spouse about to agree to one should consider the alternatives very carefully. What may appear a sensible financial decision now may not transpire to be such a sensible decision when the evil day eventually arrives and it is time to pay out your former spouse for their interest in the matrimonial property. It is certainly always prudent to consider other options during negotiations and if it is possible to facilitate a clean break by reaching a negotiation for a transfer of the property then that is certainly a more secure option.
Here at Laker Legal Solicitors our Family Law team led by Richard Hirst have vast experience in dealing with complex financial settlement cases upon divorce. Richard has over 30 years experience as a specialist Family Law Solicitor and is recognised as one of the most experienced Family Law Mediators in the North West of England. Richard also pioneered the establishment of a separate successful mediation company, undertaking all issues family mediation work throughout the North West of England. Richard is an accredited practitioner member of both the Family Mediators Association and the Law Society`s Specialist Mediation Panel
Laker Legal Solicitors serve clients throughout England. Contact us today and see how we can help you through this traumatic period in your life.