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Case law: Divorcing spouse’s new relationship reduced amount awarded to her from ‘nuptial settlement’

Divorcing spouses should be made aware that new, ‘strong’ relationships, which can include relationships where they do not intend to co-habit, can reduce their entitlement if there is a nuptial settlement which is varied by the courts.

Legal Alert

This update was published in Legal Alert - December 2014

Legal Alert is a monthly checklist from Atom Content Marketing highlighting new and pending laws, regulations, codes of practice and rulings that could have an impact on your business.

The spouses lived in a farmhouse owned by the husband’s mother and father. The parents created a trust over the farmhouse and the husband was the main beneficiary. Both spouses contributed financially to the property. The trust gave the trustees specific powers to advance all of the property to the husband during his lifetime.

The High Court decided the trust amounted to a ‘nuptial settlement’ – an ‘arrangement which makes some form of continuing provision for both or either of the parties to a marriage’ – and the court had power to vary any aspect of it in the divorce proceedings.

It ordered that the trust be varied so that the wife would receive £23,000 from it outright (representing a repayment of part of her contribution to the property), but only a reduced sum of £134,000 in relation to a life tenancy in respect of the farmhouse.

One factor the court took into account when making the order for the reduced sum (one which has not been taken into account before in such cases) was that the wife had formed a ‘strong’ relationship with a new partner, even though they were not planning to live together. This justified a lesser award – even if that meant she could end up with insufficient to meet her needs if the new relationship ended.

Operative date

  • Now

Recommendation

  • Divorcing spouses should be made aware that new, ‘strong’ relationships, which can include relationships where they do not intend to co-habit, can affect their entitlement if a nuptial settlement is varied by the courts. They may therefore have to disclose the existence of any new relationship.
Case law: AB v CB [2014] EWHC 2998


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