Equal Sharing Principle: Does It Apply To Earning Capacity?
The Law Of…Practically Applying The Equal Sharing Principle
After being awarded a £9.7 million divorce order and an additional annual maintenance of £175,000, a woman has lost her appeal for the sums to be increased. The England and Wales Court of Appeal have also moved that this maintenance, which initially was to be for an indefinite period, will end after three years.
Jane Auty, Family Law Associate, explains the rest of the story.
Earning Capacity And Marital Assets
Kim Waggott was granted a financial remedy order in September of 2016 by the England and Wales Family Court. In total, the Waggott's martial assets amounted to £16.2 million. Mrs Waggott's own payment was augmented due to her being in the process of buying a new home; Mrs Waggott also received an additional £1.4 million of deferred remuneration after the divorce.
Unhappy with these amounts, Mrs Waggott went before the Court of Appeal to argue that she was entitled to more. Her argument was based on the point that her ex-husband's earning capacity and post-marriage earnings were considered marital property. If this was the case, then under the equal sharing principle, Mrs Waggott would be entitled to a half-share of these assets.
While Mrs Waggott claimed that the sum of this wealth has been 'built up' during the marriage and was, in fact, a product of it, Mr Waggott argued that earning capacity is not covered under the equal sharing principle.
Mr Waggott went on to state that the amount awarded to his ex-wife was sufficient enough resources 'to be able to fairly effect a clean break'. In his opinion, the extension of the fund would 'contravene the clean break principle, and introduce complexity and confusion into the determination of financial claims'.
Mr Waggott also claimed that the original judge's verdict was incorrect, and cross-appealed to reduce his ex-wife's life time maintenance to a five year term, which is now due to end February 2021.
On the decision, the court said: "Any extension of the sharing principle to post-separation earnings would fundamentally undermine the court's ability to effect a clean break".
"This judgment may be seen as indicative of the Court’s applying the law relating to spousal maintenance less generously than before."
Is The Equal Sharing Principle Affecting Your Assets?
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