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JeremyT1020
JeremyT1020,
Category: Family Law
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I divorced my husband 22-years ago. The resulting court

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I divorced my husband 22-years ago. The resulting court order of 22 years ago read - he must 'take out a policy in his own life £30,000 with profits over 22 years'. The policy proceeds were then payable to me (pension provision). The order also states that he has the option to pay me out between the 5th and 15th anniversary of the policy the sum of £30,000 + 5% p/a or RPI which ever is the lower. After the 15th anniversary the option closes and the proceeds then go to me when the policy matures at 22 years. I believe the court means a full cost endowment he took out a minimum cost mortgage endowment. He offered me the proceeds - £21,442. I was advised, informally, by a retired financial advisor this should be in the region of £49,000 - £58,000. I was unhappy with this so we have corresponded using solicitors and he has upped his offer to £42,000. Negotiations have now stalled and the next step is court.
How will the court decide which policy he should have taken out? should I go to court for the difference that now exists?
JA: Where are you? It matters because laws vary by location.
Customer: Norwich, Norfolk
JA: What steps have you taken so far?
Customer: both parties have communicated via solicitors but negotiations have now stalled at his offer of 42,000 and mine at 55,000
JA: Is there anything else the Lawyer should know before I connect you? Rest assured that they'll be able to help you.
Customer: no

Good afternoon and thank you for your question. I'm Jeremy, a solicitor specialising in divorce, separation and financial matters. I'd be happy to offer you some guidance on this matter although, now it is going to court, I strongly recommend that you do seek professional representation as this has the potential to be a tricky matter. First and foremost, have you had any financial disclosure during the current negotiations? Why do you believe the court meant a full-cost endowment at the time - was this recorded in the consent order or any accompanying correspondence? Thanks, J

Customer: replied 11 days ago.
No specifics in the order to say policy type, however I have a friend who is a retired IFA and without hesitation identified the type of policy it ought to have been. The give away apparently is the term £30,000 with profits, the low cost mortgage endowment simply has a life assurance level of £30,000 and a with profits sum of £16000.
Customer: replied 11 days ago.
also a low cost endowment would never ever be a viable policy to buy out within the terms set out by the order. hope this helps

I'll be entirely straight with you. If it goes to court, you and your ex husband will easily spend £10k - £12k between you in legal fees. It's quite rare that courts make costs orders in one party's favour nowadays so that money is gone. It will also take at least 8-9 months to settle. You and him need to come to some sort of settled agreement. Technically speaking, you're £13,000 apart which, in the context of threatened court proceedings, is not a lot. Is there any way that you can reach some sort of agreement from this point? Would you accept a compromise of about £50k? In any event, you will almost certainly have to offer/attend mediation to get a MIAM certificate before you can make a court application. If you both attended mediation, you would need to have financial disclosure and consider compromise. Kind regards, J

Customer: replied 11 days ago.
Attempted that and said I would accept £48,000, he refused. I chose £48,000 because that's £30000rpi Fromm 2004, the first date of the buy out option.

In that case, you'll have to take the matter to court. Both of you will be expected to make open offers to settle before the final court hearing so you would probably offer somewhere in the region of £50k.

After the first hearing, I suspect the judge may direct both to prepare statements detailing your understanding of the original consent order although the court might order a jointly instructed independent financial advisor to report on the likely value of the portfolio. If it was found that he had deliberately invested in the wrong policy, the court may make an order that he pay the difference.

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Customer: replied 11 days ago.
Thank you for message.s. Please can you cancel the call as I wont be able to do it later or tomorrow. But please can you confirm - is financial disclosure required now - we have been divorced 22 years. Also you said in your last message that the court might order him to pay the difference - do you mean pay the the £50,000 (if thats my open offer)? Also is MIAM a standard way forward after 22 years. It comes down to the interpretation fo the words in the order now surely?

Good evening. The disclosure you would have would be related to the policy. You may find that it's also helpful to have some idea of income and pension. The MIAM is an acronym for mediation intake and assessment meeting - it is the 'gateway' to court nowadays. The court wants to see that the parties have either tried to resolve their dispute through discussion with a third party or, alternatively, there is a good reason for not trying mediation (distance or domestic violence are the 2 major factors). And yes, it will come down to the interpretation of the words. If the words in the consent order are not clear, the judge may want to see any paperwork you may still have from the time and details of the policy he took out. The court would require him to pay the difference between the policy's value now (£21k or whatever it's worth) and the value it could have been if he'd taken out the proper policy (but this would have to be assessed by an independent expert).