Splitting up is harder to do: Sorting out the financial side of divorce is more difficult after recent rulings

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The Independent Online
THE FINANCIAL side of divorce is always a messy business, and some divorce lawyers reckon there is worse to come.

If your marriage is on the rocks, it may be best to start sorting out the finances now rather than later.

Splitting the family capital and income is never simple, but this week spanners have been thrown in the works from all directions.

On Monday, the Lord Chancellor suggested a complete overhaul of divorce. A couple should sit down together with a mediator to talk through the split-up, including the finances.

Then the House of Commons' Social Security Select Committee told the Child Support Agency, which deals with maintenance for children, to overhaul its procedures - or else.

But hopes of significant reform were dashed on Tuesday when a judge ruled that higher payments demanded by the CSA for a child did not allow the court to set aside a clean- break settlement made to the wife.

The case was greeted with dismay by thousands of fathers, who had hoped that the CSA would be told that it could not interfere in cases where there had been a clean-break settlement.

However, many divorce lawyers thought that the case had little chance of success. A clean break for the wife is one thing. Maintenance for the child is another.

Margaret Bennett, a matrimonial solicitor, says: 'I was not in the slightest bit surprised at the outcome. It has never been a principle that the maintenance to a child can be bargained off against a capital settlement.'

Fathers who have already agreed a clean break appear to run the risk of CSA interference over the child's maintenance.

If you are thinking about splitting up, then a clean break is still often the best solution - making one party independent of the other can do nothing but good. But with the CSA hanging over their heads like the sword of Damocles, some fathers are now reluctant to agree an outright capital settlement.

The sticking point is the pounds 44 per week support for the carer parent - in effect, maintenance for the wife - which is included in the CSA formula for child maintenance. Many husbands perceive it as a second bite of the cherry.

As a result, instead of a straightforward clean break, where the matrimonial home is transferred to the wife in return for the dismissal of maintenance rights in respect of the wife, a series of complicated alternatives is being mooted by lawyers.

Peter Duckworth, a barrister specialising in matrimonial finance, says: 'A husband could perhaps keep his half share in the house on trust, postponed until the youngest child reaches 18 or ceases full-time education, and pay suitable maintenance in the meantime.'

Mr Duckworth has plenty of other devices that could neutralise the demands of the CSA. For instance, instead of transferring the whole house to his ex-wife, a husband could keep a charge on it that would only come into effect if their arrangements were changed by the CSA.

An even more controversial idea is for the husband to have a token maintenance order in his favour, which could be raised to match any part of a CSA order that goes to the wife rather than the children.

All these devices may be financially admirable, but emotionally they still tie the parties together. With the financial side of divorce in such a state of flux, there may be a temptation to wait.

Miss Bennett says: 'When you get divorced is often more to do with the economy than the law. Men will still be extremely anxious to get things organised before we go into another boom. Some men want to get rich for themselves and not share it with their family.'

However, women who are tempted to sit it out in the hope that the family finances improve, will have to weigh up all the eventualities.

Miss Bennett said: 'I think there will be an avalanche of divorces sooner rather than later to avoid the absolutely off-the- wall proposals made by the Lord Chancellor. They are ridiculous.

'Women in particular, I think, will be worse off under the new system. You have a divorcing couple facing each other across a table trying to sort out finances.

'Inevitably one has made a plan some time in advance and the other is in a state of trauma. Men will try to manipulate the system.'

Peter Grose-Hodge, the matrimonial partner with solicitors Druces & Attlee, agrees that women may be in for a financial pounding. He says: 'The Lord Chancellor says that mediation will be cheaper. If they are really going to investigate a couple's finances, how will it be cheaper?

'What sort of people are these mediators going to be? Do-gooding social workers, ex- probation officers, the blue- rinse princess brigade with a little time on their hands?

'You are going to get a husband who has gone to a lawyer in advance, then says he has no money, is not feeling very well, all the usual excuses. Some wives are going to get shafted.'

(Photograph omitted)