The Dangers of Nominal Maintenance Orders in Divorce Settlements
It has been the custom for a number of years to make a nominal maintenance order in favour of a Wife when a settlement is reached in a divorce case especially if there are minor children who still live with the Wife.
The amount of the nominal order is normally expressed as 0.05p per annum and it is not actually paid but it does enable the Wife to apply to the Court in the future for a more substantial and realistic order for a much higher sum in certain circumstances.
If the Wife attempts to increase the nominal maintenance order the Court takes various matters into account and can impose on the Husband and Wife a clean break order basically removing the Husband’s obligation to pay maintenance; or an order dismissing the maintenance order which can also be combined with a lump sum payment to “buy out” the Wife’s right to future maintenance. In addition the Court can, if there has not already been a clean break in relation to capital/property issues, order that assets held by either party including pension entitlement can be varied i.e. provide for part of he Husband’s pension benefit to pass to the Wife. Finally the Court can order that any ongoing maintenance should be for a set period.
A new case has recently been decided which enabled the Court to take an up to date view on nominal maintenance orders. In the recent case the parties divorced after 13 years of marriage with the children remaining with the Husband. As part of the divorce settlement the Wife was to receive a nominal maintenance order for life
For 21 years the Husband paid maintenance on a voluntary basis to his Wife until she moved to Australia. During that 21 period the Husband’s financial circumstances had improved greatly but his Wife never worked again and had made bad financial investments.
The Wife applied to the Court for a variation upwards in the nominal maintenance order made some 25 years earlier. Despite her failure to help herself the Court allowed the Wife’s application for an upward variation.
Given this and previous cases Husbands are well advised not to agree to a nominal maintenance order in favour of their Wife or if they do to ensure that such an order is for a fixed short period or at the latest to finish when the youngest child finishes education and that the Order should provide that the Wife should be barred from applying for an extension to that period.
Husbands should consider paying a little more at the time of their divorce to “buy out” any claim by the wife for nominal maintenance to avoid a claim at some future date.
Many Husbands will not appreciate that an application for upward variation by their ex-Wife can come back to haunt them very many years after they were divorced from her and where their own situation has greatly improved financially. They may in this period have remarried or as time goes on be planning for their retirement and could then suddenly find themselves having to provide for a wife that they had divorced say a quarter of a century before.
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