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Wives rush to file for divorce before law change wipes out their windfall

Date: 2006-10-17

WIVES who have split from their husbands are rushing to file divorce papers before a change in the law which could deprive them of a financial windfall.

Current rules about the valuation of a couple's assets can hand a big bonus to the partner who keeps the matrimonial home, usually the wife. But from Thursday, the rules will change.

Today, lawyers said they had seen a surge in business ahead of the deadline for the new law.

At the moment, all of a couple's assets, including the matrimonial home, are valued at the date they separate. That means if the husband transfers his interest in the house to his wife, she gets the full benefit of any increase in its value between the separation and the divorce.

But under the new rules, the house will be valued at the date of the divorce, eliminating that financial advantage.

Rachel Kelsey, partner in Edinburgh law firm Mowat Hall Dick, said there had been a significant increase in people seeking divorce writs in the past few weeks She said: "In our firm we have had more than we would normally have in a run-of-the-mill April. People have identified a tactical advantage in having the old law apply as their divorce goes through.

"If you raise a court action before May 4, the existing law will apply to that action until it is finished, whereas if you raise an action after May 4, the new law will apply.

"People who might otherwise have held off for emotional or family reasons may now be raising a divorce action to protect their financial interests."

Ms Kelsey, who is also chairwoman of the Family Law Association, with a membership of more than 300 lawyers, said other firms had reported a similar increase in business.

She said figures suggested women were more likely to be the ones who benefited from the existing rules.

"Statistically, far more women raise proceedings than men. And statistically the current law tends to favour women because it is generally the woman who wants to stay in the house."

The change in valuation rules is part of a much bigger shake-up of divorce law in the Family Law Act passed by MSPs at the end of last year. The new law cuts the waiting time for divorces from two years to one year where there is consent and five years to two years where there is not consent.

It also gives provides legal and financial safeguards for co-habiting couples and gives parental rights to unmarried fathers who jointly register a child's birth.

Ms Kelsey said there would also be couples holding off filing for divorce until after Thursday because they wanted to take advantage of the shorter waiting periods.

And she said she expected another increase in business once the act came into force.

The law has proved controversial, with the Catholic Church claiming "quickie divorces" would undermine marriage, while the Tories claimed the new law contained little evidence it would safeguard children and support stable families.

HOW HUSBANDS WILL GAIN FROM NEW HOUSE RULES

If a couple's home is valued at £200,000 at the time of separation, they will normally each be entitled to a £100,000 share.

If their other assets - pension, car, bank accounts - come to another £200,000, the court might say the wife should keep the house and the husband would have the other assets.

But in the time which had elapsed, the house might have risen in value to £400,000, while the other assets had risen much less.

So under current rules, the wife would end up with a house worth £400,000 and the husband with assets a little over £200,000.

Under the new rules, the valuation will be made at the time of divorce, so the share-out should be equal.





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