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Modifying Financial Agreements/Orders Post-Divorce

Change is constant and one of the things we can count on is that after a divorce, there may be many circumstances that change which require an amendment/modification to agreements and orders made at the time of the divorce. These changes can involve child custody arrangements, and also financial agreements which were made years beforehand. What can you do in order to amend or modify financial agreements made either by agreement with your former spouse or through an order by the Family Court? In this article, we will explore how modifications and amendments can be made and what the Family Court will look at in order to modify/amend financial orders.

How to Modify Financial Agreements/Orders Post-Divorce:
Generally speaking, if you want to modify or amend a financial agreement, you will need to file a Summons (application) with the Family Court. Your solicitor can assist with the filing of the appropriate Summons and supporting affidavit in order to request a modification of the previous orders. Alternatively, if you wish to avoid Family Court intervention, you may want to contact your former spouse or your former spouse’s solicitor through your own solicitor and mediate or negotiate a change in the financial arrangements. Negotiating a change to your financial agreement through mediation is the easiest, time saving and cost-saving alternative to court litigation and should be considered first before resorting to filing an application with the Family Court.
Consider Negotiating The Financial Modification:
As mentioned above, it is important to consider negotiating a financial modification rather than simply filing an application with the Family Court. Resolution of an application filed with the Family Court will take a long time as the Family Courts in Hong Kong are backed up with many other applications. Thus, the waiting time should be considered because you will need to be patient before your case can be heard by a Judge not to mention additional time for the Judge to make a decision about your request which could take months after a hearing. Given that it takes time for the Family Court to hear your case, the prolonged time between filing your application and it being heard will also run up costs which you will incur not only with your solicitor fees but also potential barrister fees if your application is contested before the Judge at a hearing. It is important to note that even if you go before a Judge, the Judge will usually give you and your former spouse an opportunity to consider coming up with an agreement before he/she makes an Order. Thus, it makes sense that you and your former spouse try and attempt to come up with a compromise, rather than waste time and costs going to Court.
Has There Been A Change Of Circumstances?:
In the event you and your former spouse cannot come up with an agreement through your own mediation or negotiation, you will need to file a Summons with the Family Court. In your application, you will want to highlight the reason for the request and explain in detail with proof as to why there has been a change of circumstances. Change of circumstances can include a loss of job or wages, change of job and wages, medical issues that you may be experiencing and which have resulted in unexpected expenses or your ability to earn a living. You will want to discuss these changes of circumstances with your solicitor so he/she can guide you as to what points should be presented to the Court and what the Judge is likely to consider a good reason for the request for a change or amendment to your financial orders.
Has There Been Any Changes In Need?:
The types of change of circumstances mentioned above are usually relevant when you are the spouse wanting to modify maintenance orders downwards. If however, you are the spouse wanting to modify maintenance upwards, you will want to provide sufficient reason as to how things have changed that would require the need for more maintenance. For example, has there been circumstances whereby your child/children have increased costs related to schooling or unexpected medical conditions?

The above is a simple guideline of what you can do if you wish to modify a financial agreement, however each situation will be specific to your own individual circumstance. Depending on how your financial agreement was structured at the time of the divorce, you may not be entitled to modify a financial agreement if there was a “clean break” clause with respect to your spousal maintenance. It is important to note however, that when it comes to child maintenance there is no “clean break” clause and they can always be modified depending on your circumstances. Generally speaking, in Hong Kong the types of orders that can be varied include: interim maintenance (maintenance pending suit); periodical payments (maintenance), instalments by which a lump sum is payable and an order for sale of a property. As always, it is important that you speak directly with your solicitor so he/she can guide you through the process and provide adequate advice on whether a modification or amendment can be made, and what you can expect if you file an application to modify or amend a financial order.

How Retirement Assets Are Divided In Divorce

In a divorce, one of the assets that may be subject to division are retirement assets. For many individuals, the thought of having to divide this asset is painful especially when a lot of blood, sweat and tears have gone into an individual’s work over the years and the retirement assets are essentially the evidence of such hard work. Similar to other assets such as cash, property and personal property, retirement assets may be included in the overall asset pool subject to division during a divorce pursuant to Section 7 of the Matrimonial Proceedings and Property Ordinance, Cap 192 (“MPPO”).
Let us take a closer look at the division of assets in a divorce:

1. Asset Division in Hong Kong in Divorce:

In Hong Kong, the Family Court will look at several factors pursuant to Section 7 of the MPPO, Cap 192. These factors include the following:
• Income: The Court will look at each parties’ income, earning capacity, property and other financial resources which each of the parties to the marriage has or is likely to have in the foreseeable future.
• Financial Needs: The Court looks at financial needs, obligations and responsibilities that each party has or is likely to have in the foreseeable future.
• Standard of Living: The Court will consider the standard of living enjoyed by the family before the breakdown of the marriage.
• Age of the Parties: The Court looks to age of each party and also the duration of the marriage.
• Any Physical/Mental Disability: Here, the Court will look to see if there are any physical or mental disability of the parties.
• Contributions: The Court will look to the contributions made by each of the parties to the welfare of the family, including any contributions made by looking after the home or caring for the family.
• Value: Under this category, in the case of proceedings for divorce or nullity of the marriage, the Court will look at the value to either of the parties to the marriage of any benefit (for example, a pension) which, by reason of the dissolution or annulment of the marriage, that party will lose the chance of acquiring.

2. The 3 Step View to Decide Asset Division and Provision for Maintenance:

The Court in Hong Kong will look at the factors listed above pursuant to Section 7, Cap. 192 MPPO and will compute all the available assets of the parties and distribute it according to 3 key principles:
• Need
• Compensation
• Sharing
In first identifying the assets in the matrimonial pool, the Court will include assets under both parties’ names, both during the marriage and also assets one party would have acquired before the marriage. Yes, it is important to note that in Hong Kong a party’s inheritance could be included in the division of assets in a divorce. The goal of the Court is to achieve fairness in the distribution of a couple’s assets and not necessarily a 50/50 equal division. Generally speaking, the Court may also depart from equality if the marriage is a long-term marriage and the view of the Court is to assess the financial needs with a generous assessment of needs post-divorce.
In identifying the asset pool, the Court will look at the parties’ Form E which is the financial disclosure form that is filed and exchanged by the parties at the beginning of a divorce.

3. Retirement Assets:

So, the question is whether retirement assets will be included in the asset division. Yes, it will be and likely awarded to the party associated with the retirement asset. However, upon distribution of the assets, the party associated with the retirement asset will then have to make up for that payment owed to the other spouse from another source. For example, if a husband is awarded his retirement funds from his employment, he may need give the wife a larger share in the matrimonial home division to equal out the division based on the fact that he received his entire retirement asset.
It is important for you to consult with a solicitor so they can provide you with a better idea as to how the Court will handle the division of the asset pool and what you are entitled to given your own specific circumstances. Your solicitor can provide their analysis on whether the Family Court Judge will depart from equality as it is highly dependent on the facts of your case. Your solicitor can also help you come up with creative ideas as to how to approach the asset division especially if you are working towards a settlement with your former spouse.

What Is A Form J And Why Is It Important?

Similar to a Form E, when you file for divorce in Hong Kong and proceed through the court system, there are a number of steps and forms you need to fill out as part of your divorce. One of the key disclosure documents you must fill out is a Form J. A Form J, or a Children’s Form is designed to help you and your spouse and the Court determine the best arrangements for the children. A Form J is therefore an important document that should be filled out with careful consideration and accurate details so that the Court can use this document to determine the best interests of the children. Similar to a Form E, a Form J is sworn and signed by you and should therefore contain truthful and accurate information. As this is a key document in determining custody and access arrangements, it is prudent that you fill out this form with the assistance of your solicitor who can guide you through the process of filling out the form in the most accurate and detailed way. In the event you and your spouse come to an agreement over the children without the need for Court intervention, then a Form J will not be needed. However, if you and your spouse are going through the Court system in order to resolve any custody and access arrangements, the Form J will be mandatory and you will exchange this disclosure document with your ex-spouse.

Let’s go through a Form J for a better understanding of what information and disclosure will be required by you:

Part 1: You and Your Children
In Part 1 of the Form J, you will need to provide general information about you and your children. This general information includes the full name and address of you and your children, their date of birth, age, sex and relationship to you. If there are third-parties involved in the care of your children such as step-parents, grandparents and domestic helpers, you will also need to provide such details including their name and their relationship to the children.

Part 2: Current Living Arrangements
In Part 2 of the Form J, you will need to provide detailed information about the current living arrangements. For example, how much time do the children spend time with you and with the other parent and/or other carers. If you are involved in a new relationship, you will also need to provide details of this new partner. As part of the current living arrangement explanation, you will also need to provide details as to the arrangements for the children when they are with you. For example, where do they sleep, do they share a room, and how long have these living arrangements been in place? During the children’s time with you, do the children communicate with the other parent and if so, how frequently and by what means of communication? How do you and the other parent deal with handovers and what are the logistics of these handovers of the children? Do the children communicate with extended family members when they are with you and if so, how frequently? Other questions that you will need to answer about the children’s arrangements is the type of extra-curricular activities the children are involved in and how often they attend these extra-curricular activities. What kind of support do you or tutors provide to the children regarding their school work? What kind of entertainment activities are your children involved in? Finally, in this section you will also need to detail how the children are cared for when you are working or when you have to attend to work commitments such as after-hours meetings/meals and/or travel abroad.

Part 3: Schooling
In Part 3 of the Form J, you will need to detail the children’s schooling arrangements including the name of the children’s school and their year at the school. You will also need to provide details about how your children travel to/from school, how long it takes to get to/from school and what the after-school care arrangements are for the children when they are with you. If there is special care required for your child due to special needs, this should be detailed in this section. This section is important because this is where you will need to detail your plans about how you have involved and plan to involve the other parent in the decisions related to the children’s schooling. For example, you will need to provide a plan as to how you and your co-parent will make decisions about school, choice of subjects and future career options. Will you and your co-parent agree on attending school functions together such as on parent days and sports days? You will also need to put forth the emergency contact for your children and who would be responsible as the point person should your child fall ill at school or there are emergency issues that need to be dealt with.

Part 4: Health
Part 4 of the Form J is related to your child’s health and medical problems. You will need to detail whether your child suffers from any health and medical problems and if any special care is required for your child. If your child suffers from any physical disability or requires special medication or therapy, this is where you will need to detail the issues and provide transparent information to the Court.

Part 5: Finances
In Part 5 of the Form J, finances become the focus of this section, as finances will be important for the care and future of your child. In Part 5, you will need to detail your income including any bonuses or commissions you may receive as part of your income. If you have received or are receiving government allowances, you will need to identify this source of incoming cash. If you are receiving maintenance from your ex-spouse, you will also need to detail what you have been receiving or are receiving.

Part 6: Future Parenting Arrangements
Part 6 of the Form J is an extremely important section. This is where you should detail what arrangements you would like to see for the children going forward and it is here you should detail what plans you have in place to bring this forward. In this section, you will detail the regular arrangements you propose for the children to spend time and communicate with the other parent including public holidays, school holidays, overnights and overseas trips. If the children are to live with the other parent instead of you, what proposals do you have for yourself in terms of communication and time with the children during public holidays, school holidays, overnights and overseas trips. You will also need to detail what proposals you have to assist the children in spending time and communicating with the other parent and other family members. This is an important section of the Form J because the Court will want to see how cooperative you are and if you are willing to be cooperative in the future. This is the time for you to show that you will do your utmost best to co-parent and be a willing participant in helping your children remain connected to the other parent. As the children’s support group not only includes parents and family members, the Court also wants to know how you will encourage the children to maintain friendships if a move is part of the proposal.

Part 7: Other Circumstances
Finally in Part 7 of the Form J, you will have the opportunity to detail any other circumstances which you believe are relevant to the arrangements of the children, including but not limited to mental/physical disability, mental/physical health and mental/physical abuse or violence. You can also detail any other relevant matters such as issues with a new partner or moving home. Your solicitor should assist you in detailing what is relevant and what necessary details should be provided or not.

Filling out a Form J can be overwhelming as you want to provide as much detail as possible, but you also do not want to overload the Court with too much unnecessary and historical information. It is therefore important that you speak with your solicitor to go through all the details of your case and consider what should or should not be included. Similar to a Form E, it is important to be reminded that you will need to sign this form under oath, thus your document must be truthful and should provide full and frank disclosure.

What Is A Form H?

In this article we will highlight one of the judicial forms required when you are going through a Divorce through the Hong Kong Family Court system. The Form H, is a form which has to be completed by each spouse before every hearing in the Family Court and which sets out the legal costs incurred up to that hearing and the estimated legal costs thereafter up to and including trial. The Form H is signed by you and your solicitor and by signing this form, you are acknowledging that the costs have been brought to your attention. It is therefore important that before you sign the Form H, you review the Form H carefully and ask any questions you may have about it with your solicitor.

Let’s look at the Form H in more detail as follows:

Part 1: Estimated Costs Incurred: In Part 1 of the Form H, your solicitor will need to list out costs such as (1) Fixed Costs (2) Solicitor’s Costs (including costs incurred by your current and any previous solicitors); (3) Disbursements (including disbursements incurred by your current and any previous solicitors); and (4) All Counsel’s Fees. These costs are generally apportioned between three aspects of your divorce, namely the main divorce suit, children and ancillary relief (financial matters). It is important in this section for your solicitor to list out the costs in detail and accurately.
Part 2: Estimated Costs after the current hearing up to and including the FDR: In Part 2 of the Form H, your solicitor will need to list out the costs as outlined above in 4 different parts, but this time your solicitor will list out the “estimated” costs and what you and your solicitor believe will be the further costs after the current hearing and up to the FDR (Financial Dispute Resolution) hearing to settle the issues related to ancillary relief.
Part 3: Estimated Costs up to and including the Trial: In Part 3 of the Form H, similar to Part 2, your solicitor will need to list out the anticipated estimated costs, including your solicitor’s costs, disbursements and counsel’s fees up to and including the Trial. Therefore, this is the “estimated” costs that you and your solicitor believe will be the remaining costs to bring your case to a conclusion.

The Form H is an important document because the Judge will look at this document when making any financial orders with respect to solicitor/counsel costs. Therefore, it is important that this is filled out accurately. Timewise, the Form H is usually exchanged a day before the hearing and presented to the Court on the day before the hearing.

Whilst a Form H is a required form when litigating divorce, it is important to note another important aspect of a Form H. Sometimes litigants will not be aware of the accumulated costs that have been incurred to date and the Form H can simply summarize for a litigant, the amount of costs incurred so far and what will be incurred going forward. By acknowledging and reviewing both forms submitted to the Court by both husband and wife, both the divorcing husband and wife will know how much the divorce will ultimately cost the two of them. This can sometimes be an eye-opening experience and perhaps even make one party reconsider whether litigation is worthwhile given the amount of money that is being spent.

Hong Kong Divorce x Ritzy Hong Kong – Ritzy Chat: Caroline Choi, Founder of Hong Kong Divorce

Hong Kong Divorce was recently featured in Ritzy Hong Kong’s Ritzy Chat Column. Here’s a look at our Feature Article!

Caroline Choi, Founder of Hong Kong Divorce, understands how difficult it can be to deal with divorce in Hong Kong. Today, she shares with us her views and the ways to make life easier in the midst of the time-consuming process.

1. Can you tell us what Hong Kong Divorce does?

hongkongdivorce.com is a free educational tool and resource for individuals struggling to navigate divorce in Hong Kong. They can find all the answers they need to assist them in navigating through the complexities of divorce and matrimonial proceedings in Hong Kong. It aims to set out in simple terms what one can expect to encounter in the run-up to a divorce, and during the long and sometimes complicated process that may follow. The platform provides the public with easily accessible information related to every aspect of divorce and clarifies how the divorce process works. Its mission is to provide a concise and clear overview of the law, answer common queries and provide general support to those in need. Having said that, to be clear, it does not provide legal advice. We always advise them to seek independent legal advice from their solicitors.

2. What are the most common barriers that individuals in Hong Kong face when dealing with divorce?

Divorce is not easy in general. It becomes increasingly difficult because the Court system in Hong Kong is backed up and the divorce process requires a lot of patience and time for progress to be made. Many individuals want a resolution right away but getting involved in the Court system is already difficult and it just becomes exceptionally difficult if you and your former spouse do not get along and require the Family Court in Hong Kong to make decisions for you.

3. It can be painful to deal with divorce but do you agree that every cloud has a silver lining?

Yes of course. Divorce can be painful and many liken divorce to a death in family. However, I always remind those going through a divorce that it is not the end but rather a beginning to new things. The “new” normal can be healthier and bring you even more joy than whatever circumstance/situation you were in previously. After all, to get to a healthier place, you have to go through the divorce process and resolve it.

4. What is the most important thing you want to tell the individuals who are now struggling to deal with their divorce?

It is important to surround yourself with your loved ones including family and friends. Having supportive people around you will lift you up during the difficult times in a divorce. One more thing, you should have a mindset of collaboration, especially if you have children. Having a collaborative mindset will go a long way as you and your former spouse will need to support each other for the sake of your children and it will make the divorce process much easier.

5. How do you make yourself happy and ritzy in life?

Similar to my advice above, I like to surround myself with loyal, trustworthy and supportive family and friends. The good people you surround yourself with are so important and investing in those relationships makes me happier.

To find out more about Caroline, please click here.

Modifying Financial Agreements/Orders Post-Divorce

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