Should I Divorce in England or Spain?

 

In this two part blog, Family Law in Partnership Director Elizabeth Hicks and our guest lawyer and co-author Alberto Perez Cedillo of Alberto Perez Cedillo Spanish Lawyers & Solicitors, consider the key factors to bear in mind when deciding whether to start your divorce in England & Wales or in Spain.

This blog is split into two parts. In part 1 of this blog (linked here), we looked at the eligibility criteria to start a divorce in Spain or in England & Wales, the grounds to divorce in both jurisdictions and how matrimonial assets will be divided. Part 2 of the blog below analyses how the two countries differ when determining the payment of spousal maintenance as well as child maintenance and the division of pension assets. 

Payment of spousal maintenance

Spain

When granting a divorce decree, the Spanish courts have jurisdiction to make two types of orders between spouses.

  1. Pensión compensatoria (compensatory maintenance). Spouses may be entitled to receive maintenance regardless of their matrimonial property regime. The Court will consider the following if spousal maintenance is requested:
    • The agreements between the parties regarding maintenance, if any.
    • The age and health of the parties.
    • Any professional qualifications and the probability of them obtaining employment.
    • Past and future dedication to the family.
    • Any contributions to the commercial, industrial, or professional activities of the other spouse.
    • The duration of the marriage and any cohabitation before marriage.
    • Eventual loss of a pension right because of the dissolution of the marriage.
    • The wealth, private assets and any other means and needs of the spouses.
    • Circumstances that the court may consider relevant to the case.

The wealth and financial position of both spouses are assessed to establish whether there is an imbalance after a divorce and whether the spouse who would have to pay maintenance can afford it. Depending on their circumstances, the court can issue an order for open-ended or fixed-term maintenance or a payment of a lump sum.

  1. Compensación por trabajo para la casa (compensation for household work).  

Compensation for the household work can only be granted under the separation of assets regime, as there is no allocation of assets, the court takes into account other legal rights of the spouses. The aim is to compensate the spouse who has suffered impoverishment compared with the enrichment of the other spouse for having worked for the household either by looking after the home or caring for the family or the other spouse without receiving any or sufficient payment.

In the absence of an agreement, the court has a discretion to decide on the amount and how this compensation is paid and secured. Catalan law has specific rules to calculate the amount of compensation. The amount awarded for household work will be taken into account when calculating the amount to be awarded as maintenance.

England & Wales

Whether a party requires spousal maintenance will be decided by the judge as part of determining the overall level of the financial order. The Court will take into account the factors set out in Section 25 Matrimonial Causes Act 1973. This includes the fact that both parties have an obligation to maximise their earning capacities. If the court decides that spousal maintenance is payable, it will only be awarded for such period as is sufficient to enable the receiving party to adjust without undue hardship.

In practice, the court will first of all consider the division of the parties’ assets and then come on to consider if there is a need for ongoing spousal maintenance, depending on how much capital they have following the divorce, and if so, for how long.

There has been a sea change in the court’s approach to spousal maintenance in the last few years and the times when the court awarded a stay at home spouse spousal maintenance for life have now disappeared. The courts will look at the facts of each individual case and make a maintenance award if the evidence demonstrates that the choices made by the spouses during the marriage have resulted in one of them needing the payment of spousal maintenance.

The amount of spousal maintenance which is paid is determined by the facts of each case, the income available now and in the foreseeable future, the level of both spouses’ expenses and their needs. The standard of living is relevant but not decisive. The court has to consider what is a fair amount to be paid as spousal maintenance and for how long based on all the factors set out in Section 25 Matrimonial Causes Act 1973. It is a discretionary exercise and there is no set percentage which is payable.

Spousal maintenance is always variable if there is a change in circumstances. The Court will always consider if there can be a clean break which provides for a capital lump sum to be paid instead of ongoing monthly maintenance. This will depend on the assets and facts of the case.

If a spouse remarries a third party after divorce they are no longer entitled to claim spousal maintenance from the first spouse. If a spouse cohabits with a third party this can be a reason to try and vary and reduce or stop the amount of spousal maintenance they are receiving but whether this will happen will depend on the facts of the case.

Payment of children’s maintenance

Spain

Child maintenance is calculated taking into account the assets and resources of the person who pays for it (the paying parent’s income, property and liabilities) and the needs of the child.

The amount of maintenance covers ordinary expenses (schooling, clothes, food, shelter…). Extraordinary expenses are paid equally by both parties unless otherwise established.

Child maintenance can be reduced or increased if there is a substantial change in the child’s needs and/or the wealth of the paying parent. There are tables published by the General Council of the Judiciary (Consejo General del Poder Judicial) providing guidance as to the calculations of child maintenance, but these are not binding. Child maintenance is administered by the court, and there is no specialised agency such as the Child Maintenance Service in England & Wales.

Child maintenance stops when the child becomes financially independent, and the support allowance is no longer necessary. Therefore, the Court Order does not cease automatically when the child reaches 18 years of age.

England & Wales

Claims for maintenance must usually be made through the Child Maintenance Service (CMS) which applies a standard calculation based on the paying parent’s income being £156,000 gross per annum or less. If the paying parent’s income exceeds £156,000 per annum, the court has the ability to make a “top up” order.

The CMS calculation takes into account the number of children in the marriage, any step children, the number of nights the children spend with each parent and then calculates the level of maintenance to be paid.

Often on a divorce, the parents will try and agree the amount of child maintenance payable by reference to the child’s actual expenses rather than applying to the CMS (although the CMS provides a good benchmark).

There is an obligation on both parents to support their child financially. Child maintenance is payable until a child reaches the age of 17 or finishes full time education. The Court can decide whether full time education includes university education if the spouses can not agree this.

Pensions

Spain

Pension plans are considered private property, as the Spanish Supreme Court has stated in different rulings. This means that, even within the marriage, a pension should belong to one of the spouses, since the rights generated for the pension beneficiary cannot be shared.

However, if the contributions to the pension plan are made from matrimonial property or are included as part of a spouse’s salary, these contributions could be considered matrimonial assets. This means that the spouse who is not the owner of the pension plan can demand that when the matrimonial property regime of the community of assets is liquidated, the amounts that have been contributed to the pension are part of the inventory of assets to be distributed. The amounts contributed to the plan or insurance policy, made under the property regime of the community of assets, must be reimbursed to the spouse, insofar as they are presumed to have been made with money of a matrimonial nature unless proven otherwise.

Special consideration is given to pension plans set up by an employer which are non-contributory in nature i.e. the spouses have not paid into them and therefore they are not communal/joint property.

England & Wales

Pensions can often be a valuable asset within a divorce. They firstly need to be valued and the starting point is to consider the Cash Equivalent Transfer Value (“CETV” which is provided annually by every pension scheme). If one spouse had a pension before the marriage it is often necessary to instruct an actuary to consider the pension value accrued during the marriage. If the pension is a public sector pension scheme (eg one of the spouses has worked for the NHS, armed forces, police etc) or a final salary scheme (which provides the beneficiary with a guaranteed income for life based on their average or final salary) then it is essential to consider the instruction of an actuary to obtain a proper valuation of the pension, which is often in reality considerably more than the CETV.

Pensions are treated in two ways as part of the financial considerations of a divorce. It is possible to have a pension sharing order which shares the benefit of the pension between the spouses by providing that a certain percentage is transferred to a pension in the name of the non pension spouse. Alternatively, it is possible to receive more of the other capital assets and leave the pension intact.

Like all other assets in a divorce, how a pension will be dealt with is a matter of negotiation and if agreement can’t be reached then a court or arbitrator will decide.

Conclusion

Following England & Wales leaving the European Union on 31 January 2020, it is essential to obtain specialist advice if there is a possibility of starting divorce proceedings in both Spain and England & Wales in order to ascertain where the most favourable outcome would be.

At FLiP our exceptional team of family lawyers will act quickly and decisively, guiding and protecting your interests whilst navigating the complexities of your case.


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Elizabeth Hicks specialises in all areas of family law with a particular focus in advising HNW and UHNW clients on complex cross jurisdictional issues of family, matrimonial and trusts law. Her work includes divorce, contested financial remedy cases, children cases and preparing Pre and Post Marital Agreements. Elizabeth’s cases frequently have an international dimension and many of her clients have substantial assets.

Alberto Perez Cedillo is a dual qualified Spanish Abogado and English solicitor with over 20 years of experience in English, Spanish and international family law. He has expertise in multi- jurisdiction litigation, including forum disputes, international treaties, international enforcement and analysis of Spanish law, financial remedy applications and international children cases including Hague Convention cases.