Rebecca Dziobon

PRACTICE NOTES

Enforcing financial remedies orders against trusts: offshore trusts, firewall legislation, comity, exclusive jurisdiction clauses, variation of nuptial settlements, sham findings—England and Wales

This Practice Note This Practice Note outlines the key issues and pragmatic measures when pursuing enforcement involving trusts in family proceedings, covering offshore structures and how offshore trustees may respond to orders made in this jurisdiction. It addresses enforcing a variation of settlement, the effect of exclusive jurisdiction clauses, implementing findings of sham or invalidity, compliance with ‘judicious encouragement’ orders, and trustee submissions. At the outset of any case with trust elements, parties should evaluate whether any financial remedy order will be capable of enforcement, as this can shape the strategy from the drafting of the application onwards. A cost–benefit assessment is essential, especially where offshore trusts or assets are in play. Enforcement problems are less likely where the trust is governed by English law and the trustees and assets are situated in England and Wales. Under the Family Procedure Rules 2010 (FPR 2010), SI 2010/2955, 9.26B, the court may add or remove a trustee as a party on its own initiative, or on the application of an existing party or any person or body seeking to be joined, including the trustees themselves. Doing so may assist with enforcing orders affecting...

Family

PRACTICE NOTES

England and Wales: Variation of nuptial/relevant settlements and trusts—definition, court powers, procedure, international issues, and Prest v Petrodel implications

This Practice Note This Practice Note explains when a settlement will be treated as nuptial under section 24(1)(c) of the Matrimonial Causes Act 1973 (MCA 1973), or as ‘relevant’ for the purposes of Schedule 5, Part 2 to the Civil Partnership Act 2004 (CPA 2004). It examines the court’s jurisdiction to alter a nuptial or relevant settlement and the associated practice and procedure. It also outlines the court’s approach, particular issues concerning international trusts, and pertinent case law, including the Supreme Court decision in Prest v Petrodel Resources. A nuptial (marriage) or relevant (civil partnership) settlement is one established for the benefit of one or both parties, or their children, and made in contemplation of, or during, their marriage or civil partnership. The courts have adopted a broad construction of the expression; see: What is a nuptial settlement? The court may make a variation of settlement order (a form of property adjustment order) in respect of a nuptial or relevant settlement, including a trust, on or after the making of a divorce, dissolution, judicial separation, separation or nullity order. The court can also order a variation of settlement to provide...

Family

PRACTICE NOTES

Family financial remedies: applying for and implementing pension sharing and attachment orders (England and Wales)

Practice Note This Practice Note outlines the process to be followed when seeking a pension sharing order or a pension attachment order within family proceedings, covering the form the application should take, the information required about the relevant pension scheme, the steps to be taken during the proceedings, how to draft the order, and the actions needed to put the outcome into effect. It also explains the requirements for deploying Form P1 or Form P2. An application for pension provision is made using Form A under the Family Procedure Rules 2010 (FPR 2010), SI 2010/2955, typically alongside an application for other financial orders. The fast-track (shortened) financial remedy procedure is not available. See also Practice Note: Issuing financial proceedings in Form A (standard procedure). Where a pension order is pursued following an overseas divorce/dissolution, separation or nullity order, permission must first be sought on Form D50E. If permission is granted, the substantive application is then brought using Form D50F. As the application seeks a financial remedy, Pt 9 of the FPR 2010, SI 2010/2955 applies; see Practice Note: Financial relief after overseas divorce—procedure...

Family

PRACTICE NOTES

Insurance in financial remedy cases on divorce/dissolution: medical cover, life assurance transfers/surrenders, undertakings, and death-in-service benefits (England and Wales)

This Practice Note reviews the range of insurance arrangements that parties involved in financial remedy cases might hold, such as life insurance/assurance, medical insurance and endowment plans. It also explains when it might be appropriate to implement a fresh policy, sets out the circumstances in which this should be put into effect within the proceedings, and notes drafting considerations when dealing with such policies. Individuals going through divorce or dissolution should audit the insurance products they own, whether in sole or joint names, including policies without a surrender value. The Practice Note concentrates on two areas that often raise more intricate issues: medical insurance and life insurance/assurance. Medical insurance In the UK, private medical treatment is available via private insurance, typically supplementing NHS provision. Employers may include such cover within their pay and benefits as part of a remuneration package, and schemes frequently permit the employee to add a spouse/civil partner and children on preferential terms. For parties living or working abroad, private medical insurance may assume particular significance, as they may have no access to NHS services and/or to adequate healthcare in their country of residence...

Family

PRACTICE NOTES

Overseas pensions in divorce and dissolution: scheme types, valuation, jurisdictional limits on sharing after Goyal, enforcement and alternatives including MFPA 1984 Part III (England and Wales)

This Practice Note This Practice Note outlines the various forms of overseas pension arrangements and their characteristics, together with valuation, procedural and enforcement considerations that family practitioners may face when overseas pensions arise within financial proceedings. When pursuing a financial remedy application, practitioners may come across a spectrum of pension or pension‑type schemes, including those accumulated or transferred abroad. Close scrutiny of the rules governing any non‑UK pension scheme is essential, as they may differ markedly from those familiar in the UK. Certain overseas pensions are more readily realisable than UK schemes and can be treated as an additional pool of capital for distribution; accordingly, a conventional lump sum order might be made instead of a pension sharing or attachment order, to divide the available funds either immediately or on a deferred basis. Consider arranging life assurance to cover the period before the lump sum is paid. The tax implications of any withdrawals from such a scheme must be identified to establish the net asset position at the disclosure stage of any proceedings or negotiations, and expert financial advice (and in some cases foreign legal advice) should be sought when dealing with an overseas...

Family

PRACTICE NOTES

Pension attachment (earmarking) orders in England and Wales: scope, risks, tax, variation, implementation and FCA considerations

This Practice Note outlines the nature of a pension attachment order made in family proceedings (formerly known as an earmarking order) and identifies which pension benefit rights are capable of attachment and which are not. It also covers the core features of a pension attachment order, the risks and ways to reduce them, variation matters and tax effects. Key features of pension attachment A pension attachment order directs the person responsible for a pension arrangement (the PRPA) to pay a percentage of the following to the person without pension benefit rights (the non-member party), rather than to the person with pension benefit rights under the arrangement (the member-party): pension income, and/or pension commencement lump sum, and/or lump sum payable in respect of the member-party’s death A pension arrangement means an occupational pension scheme, a personal pension scheme, a retirement annuity contract, and annuities bought under an occupational or personal pension scheme, or to meet liability in respect of a pension credit; see also: Types of pension that can or cannot be the subject of attachment orders...

Family

PRACTICE NOTES

Pension orders in family financial remedies: drafting formalities, tax, implementation, undertakings, pensions in payment, death and dismissal issues (England and Wales)

Practice Note This Practice Note outlines the formal requirements to be followed when reviewing the terms and preparing the drafting of a financial order that makes provision for pension rights, and highlights potential traps and issues to address when agreeing and settling the order, including practical implementation considerations and the consequences of death. Standard financial orders concerning pensions have been published; see Precedent: Standard order 2.1—financial remedy order. Although the standard orders do not have the status of forms under the Family Procedure Rules 2010 (FPR 2010), SI 2010/2955, Pt 5, the default position is that they ought to be used, with parties and the court permitted to adapt and refine them to such extent as is appropriate; see Practice Note: Standard orders—general principles...

Family

PRACTICE NOTES

Pension Protection Fund (PPF) in divorce and financial remedies (England and Wales): eligibility, assessment, compensation, sharing/attachment orders, procedure, charges, and the Financial Assistance Scheme

Practice Note This Practice Note explains the tests the Pension Protection Fund applies when compensating members of an occupational pension scheme, together with the process and effects of assessment for admission to the scheme in the context of family proceedings. It also outlines the ramifications for divorce or dissolution, the applicable steps within financial remedy proceedings, and the reach of the distinct Financial Assistance Scheme. The Pension Protection Fund (PPF) was created by the Pensions Act 2004 (PeA 2004) as a statutory corporate body. It administers funds to provide compensation to members of specified occupational pension schemes where: the pension scheme qualifies as an eligible scheme a ‘qualifying insolvency event’ has occurred in relation to the employer, or the employer is unlikely to remain a going concern and satisfies the conditions in the Pension Protection Fund (Entry Rules) Regulations 2005, SI 2005/590, reg 7 the scheme’s assets are insufficient to meet the defined benefits due, and the pension fund failure took place on or after 6 April 2005 For additional information about the PPF, see Practice Note: The Pension Protection Fund—an introduction...

Family

PRACTICE NOTES

Pension Sharing Order Implementation: Valuation and Transfer Days, Implementation Period, Late Increases, Notifications, Extensions, and Common Pitfalls (WRPA 1999)

Practice Note This Practice Note outlines the actions required once a pension order is made in family proceedings, mapping the principal phases and obligations: identifying the valuation date, the transfer day and the valuation day, and the rules on the implementation window under the Welfare Reform and Pensions Act 1999 (WRPA 1999). It also addresses what happens where implementation occurs after the prescribed four-month period and highlights difficulties that may arise, such as pensions already in payment and the ‘moving target syndrome’. In contrast to pension sharing orders, pension attachment orders do not involve a complicated implementation regime; see: Pensions—financial remedy procedure—Implementation of a pension attachment order. The emphasis here is on the specific, step-by-step requirements for putting a pension sharing order into effect. Matters concerning state pensions are covered in the Practice Note: Pensions—the state pension. A clear grasp of the implementation pathway for a pension sharing order is essential to safeguard clients’ positions after the order and to warn of the potential negative outcomes that delay in implementation may bring...

Family

PRACTICE NOTES

Pensions glossary for family and matrimonial finance lawyers: schemes, tax reliefs, state pension, auto-enrolment, offsetting, PPF, valuation, drawdown and post-2024 lifetime allowance changes

A-day 'A-day' is the widely used term for the broad pension tax 'simplification' reforms that began on 6 April 2006. The changes covered: how much pension contribution was allowed, the kinds of schemes an individual could invest in, the sums that could be taken (and when), and the choices available for any remaining fund. A-day also introduced the annual allowance and the (now abolished) lifetime allowance. See: Annual allowance and Lifetime allowance. AFPS AFPS: Armed forces pension scheme; see Practice Note: Public sector pensions and family proceedings. Accrual rate The speed at which pension benefits build as pensionable service is completed in a final salary scheme, eg 1/60 for each year of pensionable service. Accrued benefits The benefits earned in respect of service up to a specified date. Added years Extra pension provided by adding further years of pensionable service in a salary-related scheme. Such additional years are secured via transfer payments or through additional voluntary contributions/augmentation...

Family

PRACTICE NOTES

Pensions on Divorce, Dissolution and Separation: Court Principles, Valuation, Apportionment and Orders (Offsetting, Sharing, Attachment) and Pension Reforms in Financial Remedy Proceedings (England and Wales)

This Practice Note This Practice Note offers a concise summary of the choices available concerning pensions on divorce, annulment, (judicial) separation or the dissolution of a civil partnership, including offsetting, pension sharing and pension attachment orders, as well as the specific orders the courts may grant. It also reviews the judiciary’s approach to pensions and the implications of pensions reform. In proceedings for divorce, nullity, (judicial) separation or dissolution of a civil partnership, the court can issue a variety of orders addressing the parties’ pension rights. Sections 25(2)(h) and 25B(1)(b) of the Matrimonial Causes Act 1973 (MCA 1973) oblige the court to consider the benefits under a pension arrangement that, because of the dissolution or annulment of the marriage, a spouse will lose the opportunity of acquiring. MCA 1973, ss 25(2)(a) and 25B(1)(a) focus on the benefits that a party to a marriage has, or is expected to have. There are corresponding provisions in the Civil Partnership Act 2004 (CPA 2004). Pension rights will frequently constitute a significant asset upon the breakdown of a marriage or civil partnership. It is crucial to understand the full range of options available when dealing with pensions and the broader financial implications. It is therefore...

Family

PRACTICE NOTES

Pensions on Judicial Separation: Options Where Pension Sharing Is Unavailable, Including Attachment Orders, Offsetting and Death Benefits (England and Wales)

Practice Note This Practice Note explains the routes available for dealing with pensions on judicial separation or separation proceedings, where pension sharing cannot be used. It covers, in detail, pension attachment orders and offsetting, together with other possible measures to safeguard pension interests, and the associated procedure, practical valuation, any appeals, and the consequences of remarriage or entering a subsequent civil partnership. In (judicial) separation proceedings, the court may reallocate benefits arising from pension resources between the parties by: issuing one or more pension attachment orders, and/or setting off the value of pension rights against the value of other assets held between the parties See also Practice Note: General principles—pensions in family proceedings—Options available. Pension sharing is not available in (judicial) separation proceedings, only in an application for an order of divorce, dissolution or nullity. After the separation proceedings have concluded, the parties will remain legally spouses/civil partners—see also Practice Notes: Commencing and filing an application for a divorce, dissolution or judicial separation order (post-DDSA 2020), Grounds for judicial separation (pre-DDSA 2020) and Separation provisions for civil partnership (pre-DDSA 2020)...

Family

PRACTICE NOTES

Public sector pensions in family proceedings: key features, valuation limitations, uniformed services pitfalls, pension sharing options, and the McCloud remedy

This Practice Note This Practice Note reviews the range of public sector pension arrangements and the particular matters to consider when addressing them within family proceedings, including principal features, benefits, valuation, and the effect of steps taken to eliminate unlawful discrimination arising from the 2015 reforms (the McCloud remedy). It also sets out key practical pointers when dealing with a public sector pension... Public sector pensions are occupational arrangements for staff employed by central or local government, a nationalised industry, or other statutory bodies. They include schemes for: armed forces police firefighters civil service teachers local government National Health Service (NHS) Public sector schemes, especially those for uniformed services, are often intricate, so in many instances it is vital to obtain advice from a pensions on divorce expert (PODE). See also the Pension Advisory Group: A Guide to the Treatment of Pensions on Divorce (December 2023) (Second Edition) at Appendix I for the complexities within certain public sector schemes and for guidance on instructing a PODE...

Family

PRACTICE NOTES

State Pension in Divorce, Dissolution, Nullity and Separation: Old and New Schemes, Disclosure (BR19/BR20), Contracting‑out, Substitution, and Pension Sharing/Attachment (P1/P2)

This Practice Note outlines the varieties of state pension, the eligibility rules, the ramifications in divorce, dissolution, nullity or separation cases, how to obtain information and make disclosure, and the orders a family court may impose. It takes account of state pension reforms and explains their impact within family law. This Practice Note provides guidance on: the old state pension scheme for those who reached state pension age before 6 April 2016, and the new state pension scheme for those reaching state pension age on or after 6 April 2016 State pension entitlements are often missed on divorce, dissolution, nullity or (judicial) separation, either because they are seen as of limited worth or because their structure and the options available to address the parties’ financial needs are not fully understood. Comprehensive details of state pension rights should be gathered during financial disclosure by using Form BR19 (to request a state pension forecast) and Form BR20 (to obtain a cash equivalent (CE) valuation of any shareable rights) so the position is clear. Each party should complete BR19 and BR20 to provide a complete picture of their state pensions...

Family

PRACTICE NOTES

Trusts and Property Law in Family Financial Remedies: Invalidity, Sham Trusts, Beneficial Ownership, Proprietary Estoppel, and Setting Aside under MCA 1973 s 37 (England and Wales)

This Practice Note This Practice Note explores trusts and property law that may arise in family proceedings, including invalid or sham trusts, and property law questions such as proprietary estoppel and improper transfers. It also addresses when deploying these areas may aid a party in family cases, together with the evidence needed to advance trusts or property law submissions. The court may vary a settlement within section 24(1)(c) of the Matrimonial Causes Act 1973 (MCA 1973) or Schedule 5, Part 2 to the Civil Partnership Act 2004 (CPA 2004) (see Practice Note: Trusts—variation of a nuptial settlement), or treat trust assets as a financial resource of a party (see: Introduction to trusts within financial proceedings—Trusts as a financial resource). The court may further take account of trust assets by making findings and/or granting relief grounded in trusts or property law that go to the substance of the relevant trust arrangements. For family law practitioners, the principal trust/property issues are whether: the trust is invalid (see: Invalidity) the alleged arrangements are illusory or a sham (see: Sham trusts) assets said to be settled on trust are open to claims ...

Family

PRACTICE NOTES

Trusts in Family Financial Remedy Proceedings: Resources, Disclosure, Judicious Encouragement and Nuptial Settlement Variation (England and Wales)

This Practice Note offers clear practical guidance on the nature of trusts and how trust assets are dealt with in family financial remedy cases. It also reviews pertinent case law, the situations in which trust property might be treated as available to a party as a financial resource, and the making of ‘judicious encouragement’ orders directed at trustees. When faced with an application for a financial remedy, the court commonly adopts three principal approaches to trusts: regarding trust income or capital as a resource accessible to either party (or refusing to do so)—see: Trusts as a financial resource using its power to vary a nuptial settlement under section 24(1)(c) of the Matrimonial Causes Act 1973 (MCA 1973) or the parallel provisions in the Civil Partnership Act 2004 (CPA 2004)—see Practice Note: Trusts—variation of a nuptial settlement resolving questions of trust or property law where the validity of the trust and/or transfers to it are put in issue, or where it is said the trust is a sham—see Practice Note: Trusts—using trusts or property law in financial proceedings What is a trust? There is no single, settled definition; however, the courts have adopted the following: ‘A trust is...

Family

PRACTICE NOTES

Trusts in financial remedy proceedings: procedural and evidential issues on service, joinder (trustees and beneficiaries), variation of nuptial settlements, and compelling disclosure (including letters of request) (England and Wales)

This Practice Note reviews the principal procedural aspects of family proceedings that engage trust assets, including the issue and service of proceedings. It also explains the steps required to add a trustee or a third-party beneficiary to the case, highlights evidential considerations, and summarises the court’s powers to compel a non-party to provide disclosure. Initial considerations Where either party holds or benefits from a trust interest, the applications made and the ensuing procedure will depend on the circumstances, which determine which of the three principal approaches to trust assets should be adopted, namely: considering trust assets as a resource available to one party—see Practice Note: Introduction to trusts within financial proceedings—Trusts as a financial resource the court exercising its power to make a variation of settlement order under section 24(1)(c) of the Matrimonial Causes Act 1973 (MCA 1973) or the Civil Partnership Act 2004 (CPA 2004) equivalent—see Practice Note: Trusts—variation of a nuptial settlement applying property or trusts law to challenge the trust’s validity, alleging that the transfer of assets into a trust was ...

Family

PRACTICE NOTES

Valuing pensions in family financial remedies: CE method, limitations, alternative valuations, SSAS, transfer options and expert evidence (England and Wales)

This Practice Note outlines how pension rights can be valued and the factors to be taken into account in the context of family proceedings. It further addresses the practical requirements when appointing an expert to report on pension values, together with the consequences of internal and external transfers of pension credits... Prescribed valuation method Whether a pension is to be offset, attached or shared, the prescribed statutory valuation basis is the cash equivalent (CE). Where the pension is already in payment, this may instead be described as the cash equivalent of benefits (CEB). The rules for calculating and verifying CEs are contained in the Pension Sharing (Valuation) Regulations 2000, SI 2000/1052: reg 4 sets out how CEs for rights within occupational pension schemes are to be calculated and verified regs 5 and 7 set out how CEs for rights in pension arrangements other than occupational pension schemes are to be calculated and verified The CE will be dated as at the day the pension provider receives the request...

Family

PRACTICE NOTES

Variation, set aside and appeals of pension sharing/attachment orders, and capitalisation, in divorce and civil partnership cases (England and Wales)

Variation—pension sharing orders This Practice Note sets out guidance on changing pension sharing orders and pension attachment orders arising in family cases, alongside appeals. It also outlines the procedural elements for both variation and appeals, and addresses applications for capitalisation. Variation before final order/decree absolute Where no final order/decree absolute of divorce, dissolution or nullity has been made—and the pension sharing order has therefore not taken effect—the court may vary or discharge that order. An application to vary may only be issued before the final order/decree absolute is granted. Once a marriage or civil partnership has been dissolved, or a final nullity order pronounced, no application can be brought to vary a pension sharing order, even if it is yet to take effect. Filing an application to vary stops the pension sharing order from taking effect while the application is determined. Such applications are uncommon...

Family

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