Should I Divorce in England or New York?

In this blog, FLiP director David Allison and our guest attorney, Pamela Sloan of Aronson Mayefsky & Sloan (New York), consider the key factors to bear in mind when deciding whether to start your divorce in England or in the State of New York.

It is increasingly common for individuals and families to have homes in more than one country and/or to spend significant amounts of time in two or more. When relationships become strained and divorce is considered, this may mean that there is a choice in terms of jurisdiction for divorce.

Outcomes in different jurisdictions may differ quite significantly and in almost every case the best place for divorce for one will be the worst for the other. As first in time to start the divorce process can be a decisive or at least important factor, it is crucial to get early advice in each jurisdiction before proceedings are started and often before even discussing divorce with your spouse.

To illustrate the differences this blog looks at two very common dual jurisdictions: London (more properly England & Wales) and the State of New York. We are fortunate to have one of New York’s most prominent divorce lawyers, Pamela Sloan of Aronson Mayefsky & Sloan write the New York section of this blog.

ENGLAND:  Jurisdiction for Divorce

It is possible to divorce in England & Wales if:

1. You are both “habitually resident” in England and Wales;
2. You were both last habitually resident in England and Wales and one of you still resides here;
3. The Respondent is habitually resident in England and Wales; (so the person making the application is free to apply in the other’s state)
4. The Petitioner is habitually resident in England and Wales and has resided here for at least a year immediately prior to the presentation of this Petition;
5. The Petitioner is domiciled and habitually resident in England and Wales and has resided here for at least six months immediately prior to the presentation of the Petition;
6. The Petitioner and the Respondent are both domiciled in England and Wales;
7. No court in any EU state has jurisdiction but either of you is domiciled in England and Wales on the date that the petition is issued (but note there may be restrictions on applying for maintenance if this is the only ground relied upon) unless you are habitually resident here.

As between EU countries, the first in time to start proceedings is key, so that if proceedings are, for example, validly started in France it is not possible to start proceedings in England. As between England and other jurisdictions (including New York) timing is only a factor and where there are competing proceedings the English court will consider where the balance of convenience lies and may stay (put on hold) English proceedings in favour of say, New York.

NEW YORK:  Jurisdiction for Divorce

We must start by reminding our friends across the Atlantic that, in the USA, each State has its own laws governing just about every aspect of family law. Further, while one might say he/she resides in New York, he/she might be referring to the New York Metropolitan Area, which encompasses parts of three states – New York, New Jersey and Connecticut. Our comments in this blog are limited to the law of the State of New York.

New York will take jurisdiction over the status of the parties’ marriage if:

1. The parties were married in NY and either party is a resident thereof when the action is commenced and has been a resident for a continuous period of one year immediately preceding; or
2. The parties have resided in NY as spouses and either party is a resident of NY when the action is commenced and has been a resident of NY for a continuous period of one year immediately preceding; or
3. The cause of action on which the divorce claim is based (i.e., the events forming the basis for the claim) occurred in NY and either party has been a resident of NY for a continuous period of at least one year immediately preceding the commencement of the action; or
4. The cause of action for divorce occurred in NY and both parties are residents thereof at the time of the commencement of the action, or
5. Either party has been a resident of NY for a continuous period of at least two years immediately preceding the commencement of the action.

ENGLAND:  How the court deals with the division of assets and support on divorce

England and Wales has a discretionary system for asset division and financial claims on divorce. This means that it is impossible to say exactly what the outcome will be in any given case. The court is directed to take into account a number of factors as follows:

1. the income, earning capacity, property and other financial resources which each of the parties to the marriage has or is likely to have in the foreseeable future, including in the case of earning capacity any increase in that capacity which it would in the opinion of the court be reasonable to expect a party to the marriage to take steps to acquire;
2. the financial needs, obligations and responsibilities which each of the parties to the marriage has or is likely to have in the foreseeable future;
3. the standard of living enjoyed by the family before the breakdown of the marriage;
4. the age of each party to the marriage and the duration of the marriage;
5. any physical or mental disability of either of the parties to the marriage;
6. the contributions which each of the parties has made or is likely in the foreseeable future to make to the welfare of the family, including any contribution by looking after the home or caring for the family;
7. the conduct of each of the parties, if that conduct is such that it would in the opinion of the court be inequitable to disregard it;
8. in the case of proceedings for divorce or nullity of marriage, the value to each of the parties to the marriage of any benefit (for example, a pension) which, by reason of the dissolution or annulment of the marriage, that party will lose the chance of acquiring.

How these factors are applied will vary from case to case. Needs is the driving factor in most cases – the court will want to be satisfied that the financial arrangement will enable the separating parts of the family to meet their respective needs. Children’s needs are prioritised. What the court will want to see is an arrangement where:

1. there is appropriate housing for each of the parts of the family, providing secure homes for the children; and
2. there is sufficient money for the outgoings of each of those two households to be met.

In many cases that is the end of the issues but where the assets are greater i.e. there is a surplus over needs the court will look at a number of other factors.

In these bigger money cases, how and when property or assets were acquired can be important. A judge will want to establish whether an asset is a matrimonial asset (in respect of which the starting point is an equal division of that asset) or non-matrimonial (which can be left out of the reckoning i.e. remain with the party who holds the asset provided it is not mingled with matrimonial assets). This division is not however clear cut and the longer the marriage the less important this allocation becomes.  Sometimes it is only a factor that may lead to an unequal division of assets on divorce.

Broadly speaking matrimonial assets are those that are acquired during the marriage (including pre-marriage cohabitation) through the couples’ own endeavours. It does not matter which has created the asset. If it is created through work put in during the marriage by either spouse it is matrimonial property.

Non-matrimonial assets are those that a person has before the marriage or that comes to them during the marriage from an external source such as a gift to them individually or inheritance.

In terms of support (maintenance) the court can require one spouse to make periodical payments to the other for such amount and for such period as may enable to recipient to adjust without undue hardship. Although this has been the law since implementation of the Matrimonial Causes Act 1973 England has had a deserved reputation of being ‘wife friendly’ and in many cases orders for maintenance on a joint lives basis i.e. without an end date have been made.  In recent years the court has become increasingly focused on achieving a clean break and so orders for a specific term are now much more common. In some cases however a joint lives order may still be appropriate.

NEW YORK:  How the New York court deals with the division of assets, spousal support and child support on divorce

In New York, there are three distinct financial issues to be addressed, and there are separate statutory provisions addressing each issue: (1) Property Division; (2) Spousal Maintenance; and (3) Child Support.

• NEW YORK: Division of Assets: Equitable Distribution

New York has what we call an Equitable Distribution Statute.

For the purposes of divorce in New York, there are three kinds of property: (a) Marital; (b) Separate; and (c) co-mingled.

Marital Property – at its most basic — is property acquired by either party between the date of the marriage and the date on which a party commences a lawsuit for divorce and is not Separate Property (see below); title – i.e., in Husband’s name, in Wife’s name, in a corporate name, etc., is irrelevant; what matters is by whom the asset was acquired, when and how.  Marital Property gets divided in divorce.

Separate Property – at its most basic — is property a party had before the date of the marriage;  property a party received as a gift from someone other than her/his spouse during the marriage;  property a party received as a settlement for a personal injury; and property acquired by a party after the commencement of a lawsuit for divorce.  Separate Property does not get divided in divorce.

Co-mingled Property is just what one would think – the property that results when parties to a marriage mingle their separate Property with their Marital Property.

In New York, there is no statutory presumption that Marital Property will be divided equally in divorce.  The statute lists factors for a Court to consider in determining each party’s fair share – factors similar to many of those you have in the UK.  That said, here in Manhattan, most practitioners will acknowledge that when the parties have been married for ten years or so, or maybe less if they have several children, the judges, in their heads, start with a presumption that the assets will be divided equally.

Recently, the statute was amended to add a new factor – namely, “whether either party has committed an act or acts of domestic violence…against the other party and the nature, extent, duration and impact of such act or acts.”  So, the property division part of divorce in NY can be quite daunting, and there is room for mischief every step of the way:  identifying Marital Property; valuing it and deciding each party’s fair share.

• NEW YORK: Spousal Maintenance

In New York, the financial support a spouse pays or receives for her/his own support during a divorce proceeding is called Temporary Spousal Maintenance, and after a divorce, Post-Divorce Maintenance.  Spousal Maintenance is paid by the “monied” spouse to the “less-monied” spouse.

The NY statute contains a formula for determining the presumptively correct amount of Temporary Maintenance to be paid, but the formula is applied only to the first $192,000 of the monied spouse’s income; a court will only look to a party’s income above that amount if the court in its discretion believes it is appropriate to do so, after considering the following factors, which include, among others, marital standard of living, the age and health of each party and the needs of the non-monied spouse.  That said, the court in New York City routinely ignores the cap for high net worth individuals.

The court utilizes the same formula in calculating Post-Divorce Maintenance. Just as with Temporary Maintenance, however, the court has complete discretion to order less or more Post-Divorce Maintenance depending on the facts and circumstances of the case, including how much property the non-monied spouse received in the divorce and the amount of income, if any, such property can produce.  The statutory factors for Post-Divorce Maintenance are similar, but not identical, to the statutory factors applicable to Temporary Maintenance. The duration of post-divorce is based upon a non-mandatory advisory schedule.

• NEW YORK: Child Support

In New York, Child Support consists of two categories of payments:  cash paid directly to the “custodial” parent, and additional expenses the parents are expected to pay for the child, commonly referred to as  “add-ons.”  Add-ons include health insurance, non-reimbursed health expenses (medical, dental and emotional health), education expenses, extracurricular activities, etc.

As with Spousal Maintenance, New York has a statute that imposes a “basic child support obligation” upon a parent based upon numerical guidelines.  There is a rebuttable presumption that the amount calculated under the statutory guidelines is correct.  The guidelines are based on the parents’ total combined income up to a statutory cap multiplied by a specified percentage, based on the number of children.

For the purposes of receiving cash child support in New York, the “custodial parent” is the parent with whom the child lives more than 50% of the time.  If the child lives with each parent exactly 50% of the time, then the “custodial parent” is deemed to be the parent who has higher income (pursuant to caselaw, not statute).

In New York, for child support purposes, a child is “emancipated” at 21 years of age.  Under New York law, both parents must contribute to the support of their child and statutory law specifically authorizes the court in any matrimonial action or in an independent action for child support to order either or both parents to pay temporary or permanent child support.

ENGLAND:  Pre and Postnuptial Agreements

Technically pre or postnuptial agreements are not enforceable in England.   Such an agreement will be of influence as one of the circumstances of the case (see the factors above).  The extent of that influence will depend upon the circumstances. However, since a well-publicised case in October 2010, it is now more likely that a court will uphold such an agreement unless it would be unfair to do so.

The Law Commission has reviewed this area of family law and published a report in February 2014 recommending the introduction of what it called “Qualifying Nuptial Agreements”.  The recommendation is that such agreements would be upheld provided certain criteria are met. It remains to be seen as to whether government will bring forward legislation to give effect to the recommendation. It is however worth noting that the Law Commission is clear that the court’s discretion should only be removed to the extent that the agreement meets the needs of the parties and any children.  It is unlikely that the agreement would be upheld and enforced if needs are not met

NEW YORK:  Pre and Postnuptial Agreements

In New York, individuals may enter into prenuptial agreements and married couples may enter into postnuptial agreements.  Such agreements must strictly comply with certain procedural formalities, including that they be in writing, subscribed by the parties and acknowledged or proven in the manner required to entitle a deed to be recorded.

In the case of prenuptial agreements, the contemplated marriage must be valid and not for any illegal purpose.  A prenuptial agreement may govern both estate rights and divorce rights, including property division and Spousal Maintenance.  Any provisions in these agreements regarding children are not enforceable, as those issues must be resolved based on the circumstances that exist at the time of separation or divorce, in the best interest of the children.  Prenuptial agreements are routinely enforced in New York, provided that its terms “…were fair and reasonable at the time of the making of the agreement and are not unconscionable at the time of entry of final judgment.”   Under New York caselaw, “unconscionable at the time of entry of judgment” has been held to mean “in danger of becoming a public charge.

In the case of postnuptial agreements, spouses may enter into them both with or without the anticipation of separation or divorce and without commencing a matrimonial action.  Where an agreement is entered into with the anticipation of separation or divorce, the parties must actually be separated at the time of executing the separation agreement or immediately thereafter.  Current law permits postnuptial agreements to govern a wide array of rights between the parties, including, among others, rights upon the death of a spouse, spousal support, division of property, and, in the case of an actual separation agreement, child support, custody and visitation.

Family Law in Partnership director David Allison specialises in financial claims on divorce, especially cases with an international element. He has extensive experience in the legal issues relating to cohabitants, same sex couples, and civil partners. Contact David at E: dna@flip.co.uk or T: 020 7420 5000.

Pamela Sloan is a partner at Aronson Mayefsky & Sloan, New York. Pamela is known as being a straight-talking, formidable negotiator who works diligently to achieve favourable settlements for her clients. She is equally well-known, however, for recognizing when a case cannot be settled, be it a complex financial case or a highly charged custody matter, and then skillfully preparing and trying it to conclusion. Contact Pamela at E: sloan@amsllp.com or T: (212) 521 3512

For further information on international issues on divorce visit our dedicated website page or contact any of our experienced divorce and family lawyers.