Financial Support During A Divorce

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Financial Support During A Divorce

What Is Maintenance Pending Suit?  

Maintenance Pending Suit is a type of financial relief which can be ordered by the Court  during divorce proceedings, and will last until the grant of a Decree Absolute, the final Court Order dissolving a marriage. In awarding Maintenance Pending Suit, the Court will order one of the parties to a divorce to make periodical payments on an interim basis to the other for his or her maintenance for such duration as the Court deems appropriate, usually for the duration of the divorce proceedings.

How Does The Court Approach A Maintenance Pending Suit Application?

The Court will not delve too deeply into the financial positions of both individuals. The Court will look at the needs of the applicant to maintain the same living standard as during the marriage and how much the payor can realistically pay to the payee. The individuals will only need to disclose income and expenditure information and the Court then considers the parties’ situation broadly Before determining the appropriate amount, if any, that should be paid on a monthly basis.

Maintenance Pending Suit To Fund Divorce Proceedings

In addition to living expenses, an application for Maintenance Pending Suit can also cover the applicant’s legal costs for the divorce proceedings and/or litigation with third parties as long as the following conditions are met:-

  1. The applicant does not have any assets of their own or none that can reasonably be deployed to fund the cost of litigation;
  2. The applicant cannot provide any security for borrowing a loan or none can reasonably be offered;
  3. The applicant cannot reasonably obtain legal services by offering a charge on the outcome of the litigation; and
  4. The applicant cannot secure publicly funded legal help at the level of expertise required for the proceedings.

Variation of Maintenance Pending Suit

If the payor to a Maintenance Pending Suit Order considers that they can no longer make the periodical payments or if the payee requires additional financial support, they can apply to the Court to vary the Order. The Court will consider the change in circumstances of the individuals for example, if a payor has recently been made redundant, and the Court may then make an Order that is reasonable and appropriate in the circumstances reducing or suspending any periodical payments.

Depending on how the other party to a divorce approach the proceedings, it can be a long journey. Financial Relief has become an integral part of a divorce to support the parties and you should always keep financial relief in the forefront of your mind when considering your divorce.

What Is Spousal Maintenance And How Is It Calculated?

Upon divorce, it is open to the Court to make various financial orders between the parties. This article addresses spousal maintenance, namely periodical payments upon divorce from one spouse to the other (either wife to husband, or husband to wife), and explains the general reasoning behind the determination of the amount of such award.

Periodical payments are the payment of regular maintenance from one spouse to the other, usually on a monthly basis. Periodical payments, if awarded, are usually ordered to last until the receiving spouse remarries, or for the duration of their life. Periodical payments may also be expressed to cease once the receiving party begins permanent cohabitation with another partner, although this would be in the form of an agreement reached by way of consent, it is not an order open for the Court to make.

As periodical payments can last for many years, they may be “index linked”, meaning that the maintenance will increase to reflect the effects of inflation over time.

When considering the appropriate figure for spousal maintenance, the Court will take into consideration the factors listed in section 7 of the Matrimonial Proceedings and Property Ordinance, Cap. 192:

      1. The income, earning capacity and financial resources of the couple involved.

        2. The needs, obligations and responsibilities of the couple.

          3. The standard of living enjoyed by the couple before the divorce.

            4. The age of the parties involved and the duration of the marriage.

              5. The individual contributions made by the parties to the welfare of the family.

                6. Any physical or mental disability of any of the parties involved.

                  7. Any loss of benefit for any of the parties due to the divorce.

Therefore, the Court will consider the overall financial position of each party both at the time of proceedings and in the foreseeable future. Generally speaking, the lifestyle enjoyed by the parties during the course of the marriage is also a relevant reference point.

There is no one size fits all application of the above factors, and the Court’s determination of the appropriate amount of spousal maintenance, if any, is inherently subject to judicial evaluation of the circumstances of the case.

Also important to consider is the marital pool of assets for division. How this may be divided will also affect the amount of monthly maintenance that may be awarded.

Generally speaking, if the parties’ marriage has been of a medium to long duration (7 years or more), the Court is inclined to ensure that both parties walk away with financial parity, and neither is left in a financially detrimental position because of choices made throughout the marriage, or without the means to support themselves (for instance, if one spouse gave up their job to be the primary carer of the household and any children of the marriage).

If maintenance is awarded by the Court, it is always open to either party to apply to the Court to vary the amount of maintenance being paid. This may usually be due to a change in circumstances, e.g. one party being made redundant or a change in living circumstances.

In addition to periodical payments, a divorcing spouse may also seek/receive:

  • A lump sum payment; and/or
  • The transfer of property.

These other forms of financial maintenance are covered in separate articles here on hongkongdivorce.com

Children Issues In A Divorce

How Are Children Matters Dealt With In The Family Courts?

The Hong Kong Family Courts have the jurisdiction to make Custody, Access and/or Maintenance Orders in relation to children i.e. those aged under 18. Generally speaking, children are not required to have separate legal representation, unless the Court considers it appropriate to do so.

What Is A Custody Order?

A Custody Order is a court order which relates to the child. In such type of Order, the court will make an order on three aspects, namely:

  1. Custody;
  2. Care and control; and
  3. Access of the child.

Custody may come in two forms – sole custody and joint custody. The former means that only one of the parents has custody over the child and the latter means that both parents have custody over the child. Having custody over a child means that the custodian parent can make all the important decisions affecting the child such as his/her education and religion. It is important to note that if a parent has sole custody over a child, the other parent can still have a say in key issues related to the child such as choice of school and/or religion. Generally, the Family Court tends to grant a Joint Custody Order as the Court recognises the importance of having both parents involved in the upbringing of the child. This is so unless it is clear to the Court that a Joint Custody Order will not work in the circumstances, perhaps because the parties are unable to communicate, or the situation remains too acrimonious.

Care and control of a child is typically granted to the custodial parent. Having care and control means that the custodial parent has the right to make decisions over the child’s daily matters, such as what they wear on a daily basis or the foods that they eat,.

What Is An Access Order?

An Access Order is usually granted to the non-custodial parent and allows the parent  without care and control to visit the child. For example, the Court can grant one of the following three types of Access Orders:-

  1. Reasonable Access Order;
  2. Defined Access Order; or
  3. Supervised Access Order.

A common access order is Reasonable Access, which means that the parents are left to make arrangements as to how and when access will take place between themselves. If an agreement cannot be reached or if any problem with access arises subsequently, the Court may vary the Order to a Defined Access Order which specifies when, where and how access will occur. If there are difficulties over access, the Court may also grant Supervised Access, which means that access can only take place with the supervision of an independent third party who is responsible to supervise the access time.

Children’s’ Financial Matters

In a divorce suit, the Court may make a Financial Order for periodical payment or lump sum payment for the benefit of the child.

A lump sum payment is ordered to achieve a clean break and may be ordered to be paid as one lump sum or by instalments. The Court in considering whether to grant an Order will consider the circumstances of the case and the following non-exhaustive list of factors:

  1. the financial needs of the child;
  2. the earning capacity and assets of the child;
  3. the physical and mental condition of the child,
  4. the standard of living of the family prior to divorce; and
  5. the education the child was receiving and expected to receive.

The Financial Order shall only take effect upon the grant of the Divorce Decree Absolute, the final Court Order which officially dissolves a marriage.

In addition to the above, another type of Financial Order called Maintenance Pending Suit can also be applied for in the best interests of the child. The Court, in awarding Maintenance Pending Suit, will order one of the parties to the divorce to make periodical payments to the other for his or her maintenance for the duration of the divorce proceedings.  The Court will consider the reasonable needs of the child and the ability of the husband or wife to pay without conducting a detailed investigation. This type of Order can take effect from the date of the presentation of the Divorce Petition until the Divorce Decree Absolute.

Divorce, when it involves children, will add layers of complexity to the divorce procedure. Thus, in order to safeguard custody your rights and your children’s rights, be sure to consult your solicitor and ask questions!

How Is Child Maintenance Calculated?

Unlike spousal maintenance, the Court has wide discretion to allow maintenance for children at anytime prior to the decree or even if the proceedings are dismissed.

Generally speaking, in all matters relating to children in family proceedings, the welfare of the child/children is the first and paramount consideration of the Court. While each case will depend on its own facts, the Court, in making any determination with regard to financial orders for a child will take into account all relevant factors, which include:

  • the financial needs of the child;
  • the income, earning capacity (if any), property and other financial resources of the child;
  • any physical or mental disability of the child;
  • the standard of living enjoyed by the family before the breakdown of the marriage;
  • the manner in which the child was being (and in which the parties to the marriage expected the child to be) educated;

The Court will generally endeavour to exercise its powers so as to place the child, so far as it is practicable (having regard to the above factors) in the financial position in which the child would have been if the marriage had not broken down and each of the parents had properly discharged his or her financial obligations and responsibilities towards the child. This will be different for every case depending on the parties’ standard of living during marriage, and the financial means of each parent.

Children’s maintenance will usually involve consideration of all expenses that may be incurred by them on a daily/monthly/annual basis, such as food, their share of housing expenses, education, extra-curricular activities, clothing, gifts, and holidays. A child’s financial needs will be interpreted on a generous basis by the Court.

Once the Court arrives at an appropriate figure to reflect the monthly expenses of the child, this will be made into an Order, such that the paying spouse must pay that amount every month going forward, usually until the child reaches 18, or finishes tertiary education, depending on what is prescribed in the Court order.

It is always open to either parent to apply to the Court to vary maintenance of a child (either to increase, decrease or suspend the amount) if there has been a change in circumstance, e.g. the decrease of income of the paying party, or the increase of a child’s expenses. The Court will then consider the matter afresh and revise the sum of maintenance if it sees fit to do so.

Aside from maintenance, the Court may, on an application by either of the parents (or guardian) who has custody of the child – may make any one or more of the following orders (having regard to the means of the paying parent):

  • a payment of a lump-sum to the applicant in one amount or by instalments for the immediate and non-recurring needs of the child.
  • transfer of such property to which either of the parents is entitled or
  • settlement of such property, to the child.

These other forms of financial maintenance for children are covered in separate articles on hongkongdivorce.com

 

 

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