The family courts will always want to ensure that children are properly accommodated and properly maintained where financial circumstances allow. In the context of a divorce, the courts will be readjusting the assets of the family in any event to divide them between the husband and wife, making sure the children are properly provided for. In the context of unmarried parents, different rules apply.
It may be that funds have been pooled together in property and there are remedies the court has to address the division of those funds when an unmarried relationship breaks down. In these circumstances you may be able to reach agreement or, if you cannot agree, a claim can be made to court to protect and determine your property rights.
However, where there are children of the relationship it may also be appropriate for the parent with care of the children to make a claim against the other parent for certain needs, costs and expenses. This may include a lump sum to cover particular costs and/or for a property to be settled into a trust so that the child (and by extension the child’s main carer) has secure housing. The property will only be used by the resident parent during the child’s minority or whilst they continue in full time education before the capital in the trust reverts back to the non resident parent.
The Child Support Agency will deal with any maintenance for the child in the first instance. If, however, the income of the non-resident parent is more than £104,000 net per annum then it may be appropriate to ask the court to assist, both by ordering additional maintenance and, where applicable, school fees as well. In certain cases, the court may feel it appropriate to make provision for a “carer’s allowance” to allow the parent with care of the child either to cover the costs of employing external childcare or to provide a small amount in lieu of an earned income if the parent prefers to stay at home with the child.
We have considerable experience acting both for the resident parent of the child and the parent against whom an application is made. It is often necessary in these cases for detailed trust documents to be drawn up governing precisely the terms under which any property is held so that the interests of both parents and the child are properly balanced and protected.
Tax considerations mean that careful planning is also needed to ensure any arrangement is as tax efficient as possible. In such circumstances we work closely with our Real Estate and Wills Trusts and Tax teams and, if necessary, we also have close contacts with other professionals who can give tax advice on the more complex arrangements.