The needs of the parties is one of the factors to be considered by the court under the checklist set out in section 25 of the Matrimonial Causes Act 1973. It is a legal term and might not mean what you think it does. What is says is the court shall have regard to:
‘The financial needs, obligations and responsibilities which each of the parties to the marriage has or is likely to have in the foreseeable future.’
The needs of any children of the family will be the court’s first consideration.
The court will not just look at parties needs and neither will a solicitor if they are giving you advice about what is a ‘fair’ settlement or what the court is likely to order. The court (and therefore your solicitor) will consider all of the circumstances of the case and the remainder of the section 25 checklist. In interpreting the application of the provisions of matrimonial law, the relevant case law also has to be considered. That is why I read the case reports as they come out.
In the majority of cases, meeting the essential needs of the parties will be all that is achievable. That is because the family assets are as they are. The court, and solicitors, can only work with what they have.
In some limited means cases it may only be possible to meet the basic needs of one party because the assets are so slim and that is usually being the parent with the day-to-day care of the children of the relationship.
Needs usually fall into two categories: housing needs and day-to-day income needs. The parties’ needs should be considered against what assets there are. Of course then, needs in a case with limited assets will be different to those is a case with more money and property. You can’t spend what you haven’t got.
In most cases, needs will centre around housing needs and income needs. A party’s reasonable housing needs will be looked at by reference to the number of bedrooms required in relation to the number of children of the family and the price of property in the local area. Local estate agents’ property particulars assist as a guide in assessing reasonable housing needs. If relevant mortgage raising capacity also is considered.
Sometimes, assets and income are complicated and your solicitor may advise that a financial planner be called in to give advice.
Income needs are calculated by compiling lists of expenditure setting out income requirements on a monthly or annual basis; a budget for you. It is important that these are realistic and in proportion to the assets that there are. It is important not to overstate your income needs. The expenditure claimed should be realistic and proportionate, taking into account the standard of living enjoyed during the marriage and the available income of both of the parties. Excessive or unrealistic income requirement schedules will often lead to criticism by the court and can have an impact on that party’s credibility as well as costs.
See, I told you that needs might not meant what you think it does. If you need help sorting out the financial arrangements for the future, contact me.