Setting the Discount Rate and Achieving Fairness for Victims of Accidents
Going through a divorce can be both emotionally distressing and technically challenging at the best of times. However, in the event of one spouse dying during or shortly after divorce proceedings it can bring an added element of complication. Although this is thankfully a very rare occurrence, there are options to consider depending on the stage divorce proceedings have reached.
Recently, there has been considerable press attention on the large financial settlement awarded to Christina Estrada in her acrimonious divorce from Dr Walid Juffali following a 12 year marriage. Mrs Justice Roberts awarded Ms Estrada £53million, making it one of the largest divorce settlements in the English family court’s history. After long protracted proceedings, Ms Estrada was finally granted the award at the end of June 2016. Sadly her ex-husband died nine days before the date he had been ordered to transfer the settlement, leaving Ms Estrada in what could be a precarious position. To date, Ms Estrada has yet to receive a penny. So what options are available to her? What happens if one spouse dies during divorce proceedings?
It will all depend on whether the court has made a financial Order or not.
Where a financial Order has already been made
If an Order has been made, as in Ms Estrada’s case, this establishes a formal debt which can be sued upon. Dr Juffali had an unfulfilled financial obligation which, on his death became the responsibility of his executors. The role of an executor is to identify the assets and liabilities of the deceased’s estate, collect in his assets, pay any debts and liabilities and distribute the deceased’s estate according to his Will (or the intestacy rules).
Ms Estrada has yet to receive her settlement, although Dr Juffali’s executors are reportedly engaging favourably with the issue. For the moment, the Court has declined to issue an enforcement order against the estate, in the hope that the matter will be resolved without the need for further litigation. As with any estate administration, Dr Juffali’s executors will need to ascertain his assets and liabilities, with a view to determining how payment of such a large sum will practically be made.
The Court will initially seek to provide the executors with a reprieve whilst they start to administer the estate, in the expectation that the debt will be discharged as soon as practically possible.
Had divorce proceedings concluded, it is important to know that any Will made prior to the divorce will take effect as if the former spouse had died. We would recommend making a new Will immediately after divorce proceedings are finalised – or indeed before, if everything is left to the spouse you are divorcing.
Where there is no financial Order
If a party dies after divorce proceedings have been issued but before the Court has granted a financial Order, matters are slightly more complex. A recent example is the case of Mr and Mrs Vindis, which was reported in the press earlier this year. The couple had been separated for two years when Mr Vindis passed away. Whilst divorce proceedings were issued two months before he died, the financial arrangements had not been settled. They were still married and Mrs Vindis became a widow. Mr Vindis had a fortune of approximately £12 million but left his widow only £36,000 in his Will. No financial Order in the divorce had been made, so there was no “debt” owed to her. She has therefore brought a claim against her husband’s estate under the Inheritance (Provision for Family and Dependants) Act 1975 (the “Act”) in her capacity as the surviving spouse, claiming around £6 million on the basis this is what she hoped to receive on a divorce.
If your spouse/civil partner dies in the middle of divorce proceedings but before a financial Order has been granted by the Court, you will be treated as a widow/widower and you should first ascertain the content of your spouse’s Will. You may have already been sufficiently provided for in the Will, whether intentionally or unintentionally as few people remember to update their Will when they separate, and the deceased’s executors are obliged to follow the terms of the Will and transfer any specified assets to you, even if divorce proceedings were already in progress.
If, however, you are not sufficiently provided for under the Will, you may choose to follow in Mrs Vindis’ footsteps and bring a claim under the Act.
In considering a claim, the Court will consider the following factors:
The duration of your marriage and any contribution made to your family is also a factor (for example, looking after the matrimonial home or caring for the family). The Court will take into account what you might reasonably be expected to have received if your marriage had been terminated by divorce, rather than death. This is obviously a favourable position and this is the basis on which Mrs Vindis is arguing she should receive much more than the £36,000 contained in her husband’s Will. It is however worth bearing in mind that, as with all litigation, the process can be lengthy, costly and no outcome is guaranteed.
Should you have any questions about the issues raised in this blog, including bringing a 1975 Act claim, please see our Frequently Asked Questions and case studies, or contact a member of our family or private client teams.
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