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Unmarried Parents and Child Maintenance

An increasing number of individuals in Hong Kong are choosing not to get married. For unmarried couples who have children, many are unaware of their legal rights for financial support should the unmarried couple split. Indeed, the financial obligations of unmarried parents after separation are not as clear cut and certainly not the same as married couples.

When unmarried couples separate, they are not entitled to claim for maintenance for themselves from their ex-partner. An unmarried parent may find him or herself without accommodation or adequate funds to maintain the same standard of living he or she enjoyed while together. The only form of financial support an unmarried parent can obtain is child maintenance under the Guardianship of Minors Ordinance.

What financial support can an unmarried parent claim for the benefit of the child?

It is always desirable for unmarried parents to try and reach an agreement on how to support their child upon separation. However, if an agreement cannot be reached, an unmarried parent may apply to the court for the following forms of financial support for the benefit of the child:-

Lump sum payment for the immediate and non-recurring needs of the child or for any liabilities or expenses previously incurred in relation to the child
This can cover the one-off needs of the child within the immediate future such as medical treatment, school uniforms and equipment.
Maintenance payments
Secured maintenance payments
Transfer of property
Settlement of property

In determining the amount to be paid for the benefit of the child, the court will consider what is reasonable, bearing in mind the paying parent’s financial situation. The Court will not force the paying parent to pay an amount he/she cannot afford. Moreover, when deciding what orders should be made, the court will have to keep in mind what is in best interests of the child.

How is child maintenance calculated for unmarried parents?

An unmarried parent can claim child maintenance to meet the reasonable needs of the child until the child reaches 18 or finishes full-time education. The child maintenance can cover expenses for the child’s normal activities and necessities such as food, clothes, medical/dental expenses, school fees, tuition/extracurricular activities, school buses and entertainment/presents. It can also cover the costs of hiring a domestic helper. The paying parent is usually required to pay the education expenses including tuition fees and school bus fees directly.

Crucially, the unmarried parent can seek child maintenance to cover rental which more often than not is the largest expense an unmarried parent will incur particularly in Hong Kong where property prices can reach unaffordable levels. However, all of this has to be within the means of the paying parent taking into account how much he/she earns per month and his/her personal monthly expenses.

In determining what amount of child maintenance is reasonable, the court will also consider the standard of living of the paying parent such as the size of his/her flat, whether he/she was a member of any clubs and how often he/she travelled. For instance, if the paying parent enjoys a comfortable standard of living, eating at good restaurants and going on frequent holidays overseas, the court will not expect the child to live on a shoestring budget.

An unmarried parent may also claim a ‘carer’s allowance’ to support him or herself in raising the child. This ‘carer’s allowance’ will cover the unmarried parent’s basic needs when looking after the child, in particular, when it limits his/her ability to work, and would increase the total amount of child maintenance payable to him/her. It can cover the expenses incurred to maintain the home such as utilities and other general household expenses. However, this allowance is usually a lot less than the maintenance a married parent would receive and the Court will take into account whether the unmarried parent can start working part-time or gradually return to full time work as the child grows older.

For many, the rights of an unmarried parent for financial support of children are not well understood. If you are considering making a claim for child maintenance as an unmarried parent it is important to seek legal advice from a family law professional.

The Fight for the Family Home in Divorce

A major bone of contention among divorcing couples is the division of the family home. This is understandable given that couples invest considerable time, effort and money in creating a dwelling place and for the majority of couples, the family home is a major asset that a couple acquires during the marriage. Having a roof over your head and over the heads of children is of paramount importance to a court when making decisions related to the matrimonial home. It is for this reason that individuals must have a realistic view of what can happen to this asset during a divorce. One potential change may be the loss of the family home. A party to a divorce may be required to “downgrade” to a smaller place or may even be required to rent instead of own a home, which for some is a difficult change of circumstances.

So, with this in mind, what happens to a family home in a divorce and what options are available? Here are a few things to consider when discussing the family home in a divorce:

Sell the Family Home:

One option that divorcing couples opt for is to sell the family home. Proceeds from the sale of the home are then split accordingly between you and your ex-spouse, the split percentage being agreed upon by you and your ex-spouse or by court order. Prior to the agreement or order for the sale of the family home, you and your ex-spouse may be required to hire an expert valuer to value the property in question, especially in circumstances where you and your ex-spouse cannot agree to the listing price or the percentage split of the sales proceeds of the home.

In Hong Kong, the Family Court has the authority to issue what is called a “Mesher order” which basically is an order to sell the family home but at a postponed time until a named event occurs, such as when a minor child graduates from high school or university. The Family Court will look at the facts surrounding the family before making any such orders but the goal in postponing a sale is to consider the accommodation of one spouse and the children.

Another power of the Family Court is to issue what is called a “Martin order.” This is similar to a Mesher Order, except that under a Martin Order, one party is given an entitlement to occupy the family home for life or until remarriage.

In certain situations, if a transfer of property results in one party having a larger share of the matrimonial pool, the individual who receives the greater share may be required to compensate the other party a lump sum of the gain or the receiving party can hold a legal charge over the property until such time he/she can be later compensated.

It is important to bear in mind that if a Family Court makes an order for the sale of the family home, it can only be ordered after you are divorced (Decree Absolute).

Transfer of Property:

Although not common, the Family Court in Hong Kong also has the ability to order a transfer of the family home to the other spouse or a child of the family.

The Family Court in Hong Kong acknowledges that it is generally desirable for the primary caring parent to remain in the family home, on the basis that the children remain in a home they are used to and close to their school, and the Family Court will do what they can to maintain that status quo. This however does not mean the Family Court will not take into account cheaper accommodation if this means capital can be released from the family home and the family can move into similar and satisfactory accommodation.

One thing to keep in mind in a transfer of property situation, is whether there is a mortgage attached to the property as this could affect a transfer of property. What will become a factor is whether the receiving party can maintain the mortgage from either his/her own resources or from maintenance received by the other party.

Buy-Out:

Another option to consider, if you have the ability and the funds, is to buy-out your ex-spouse’s interest in the family home. If you choose this option, talk to your solicitor and discuss what provisions are necessary in an agreement/order to secure your interest in this property.

Stay in the Home Pending Sale/Transfer:

Some divorcing couples may consider staying in the family home and live together pending the finalization of the divorce. While this might make sense for some families, it could also create an environment of stress and tension, not only for the divorcing couple, but also for the children. Before choosing this option, it is important to have a plan and discuss this with your ex-spouse so boundaries are established and communication tools are in place should conflict occur. Having a plan will eliminate any tension that may occur when living in close quarters.

Tenancies:

In a city like Hong Kong, it is not unusual for couples not to own a home, but instead become renters due to the high housing costs. In a divorce, it is not uncommon for one party to remain in the rental unit until such time the lease has expired, subject of course to whether the parties have the ability to pay the rent.

Adjustments must be made at times and this relates to rental units as well. In certain cases, there may be insufficient income to pay for two rents each month. Such adjustments may include a “downgrade” to a smaller, less expensive rental unit or even adjust the standard of living.

Discuss these options with your ex-spouse, along with your solicitor. Your solicitor can provide you with more detail on what options are best suited for you and your unique circumstances. While it may be uncomfortable and upsetting to divide an important asset such as the family home, this may also be an opportunity to start fresh and create a new home for you and your family.

Mental Health and Divorce

It is not uncommon for many individuals to equate divorce to a death in the family. A plethora of emotions are not uncommon and can range from feelings of freedom, happiness, remorse, sadness and guilt along with a dash of bitterness, resentment and frustration. A divorce becomes exceptionally difficult when individuals are engaged in long, drawn-out court battles on key issues such as children, assets and ancillary relief.

In this article, we focus on the importance of enlisting the help of mental health professionals when you are going through a divorce. It is a key way to help you heal and move forward in your life. Mental health professionals can help you process the range of emotions you may experience during the divorce process and provide you with helpful tools to resolve issues you may be dealing with in this divorce journey.

In a time when mental health awareness is being highlighted in media and self-care is becoming a priority, there should be no shame in seeking help when it is needed to get you to a better place emotionally and spiritually.

Types of Mental Health Professionals: Before we dive into the benefits of enlisting the assistance of mental health professionals in divorce, let’s look at the types of mental health experts available to you in divorce. One mental health expert may be a therapist/psychologist. A therapist/psychologist can assist you in managing the stresses of divorce, including your expectations of the outcome. A therapist/psychologist can also help you develop new interpersonal skills that are valuable in creating healthier relationships whether it be with your spouse or your children during and after the divorce process. The interpersonal skills and tools you may learn through therapy is especially helpful if you have children and there is a need to co-parent with your ex-spouse. If you do not have the means to hire a therapist/psychologist, there are many mental health services available such as St. John’s Cathedral Counselling Service or The Samaritans in Hong Kong which can provide emotional support and counseling services for those in distress free of charge. Another mental health professional you may consider is a mediator who can assist you and your spouse negotiate a mutual agreement with respect to custody and access. This is an ideal option if you and your spouse are on amicable terms and you both believe a compromise is feasible through open dialogue and communication. To enlist a mediator to assist in custody and access issues is beneficial especially if you and your spouse agree that you do not wish to involve the court in resolving your custody and access issues. Another option is a parenting coordinator, who can assist you and your spouse resolve minor issues such as holiday pickup arrangements and communication disputes.
Benefits Of Hiring A Mental Health Professional In Divorce: What are the benefits in hiring a mental health professional? Calming emotions, clarifying expectations and helping discuss difficult issues are just some of the essential benefits obtained through the assistance of a mental health professional. Before deciding on a mental health professional, do your due diligence and conduct your own research before you entrust the personal details of your life to a professional. Your solicitor can be a helpful resource in providing you with a list of reputable and highly trained experts in the very area in which you seek assistance. There are many healthcare professionals in Hong Kong who have dealt with divorcing couples and can provide you and your family with helpful tools on how to navigate these difficult waters.
When Should A Mental Health Professional Be Employed In Your Divorce? Deciding on whether to enlist the help of a mental health professional is a personal decision. Consider therapy if you believe it can offer support and assistance in your own personal growth journey. Consider therapy if you are struggling with mental illness, which may be triggered or exacerbated by the circumstances surrounding your divorce. Talk to your solicitor to determine if a mediator is needed to resolve disputed children’s issues in your divorce. Your solicitor may have insight as to whether these third-party experts will be helpful to your case. You and your spouse may even consider enlisting the help of these trained mental health professionals for your children, especially if they are struggling with the “new normal” of the family dynamics. However, when doing so, make sure that the children are amenable to the idea as it truly is up to a child on whether he or she wants to attend therapy. Respect your child’s privacy if he or she chooses to attend therapy to resolve issues related to the divorce and remember not to use it as a weapon against the other spouse in your divorce.
Consider Other Forms Of Mental Health Support: Finally, mental health support does not need to be limited to therapy. Consider mediation, yoga or other forms of physical exercise to boost your mood, mind, confidence and self-esteem. A healthy lifestyle, hobbies, journal practice and gratitude and appreciation lists are also helpful ways to boost your mood and confidence. Change is difficult to adapt to, but be hopeful in that change is good and there are better things ahead.

Your solicitor is available to support you through the divorce process and can provide you not only with legal assistance but emotional support as well. Do not be afraid to ask for help when you need it. There is no shame in asking for help to bring your mental state to a better place.

Cross Border Views on Inherited Wealth

This article looks at how inherited funds are treated from a cross-border perspective. To the surprise of many, inherited wealth in a divorce may be treated differently depending on the jurisdiction in which you file for divorce. Location is therefore an important factor to consider when divorcing. To unpack this topic, let’s explore and contrast how inherited wealth is treated in Hong Kong vs. the United States of America, in particular the community property state California.

1. Inheritance in Divorce in California: California, like many other states, is a community property state. This means that in a divorce, all property acquired during the marriage is divided equally between the divorcing parties. An exception to this rule occurs when an individual receives an inheritance during the course of the marriage. In those circumstances, under California law, an inheritance is separate property and therefore will be excluded from the division of assets and debts in a family estate (Family Code Section 770).

It is important to note that when an individual receives an inheritance, the monies received must be traceable to the source so there is no confusion as to whether the money is separate property or community property. That is why it is always a good idea to open a separate bank account and deposit inheritance monies into this separate account to identify them and keep them separate. Otherwise, by depositing inheritance funds in a joint community bank account, you are commingling funds. When monies become commingled, it can become very difficult to trace monies back to the separate property source and your former spouse may have an argument that all inherited funds were already spent during the marriage and therefore all remaining funds in the joint account are community property and must be split equally. When in doubt, always keep clean records of any inherited funds and keep records of how these monies have been spent. If you don’t keep track, a tracing expert may be enlisted but tracing can become quite expensive and time-consuming thereby stalling the divorce.

2. Gifts Are Separate Property in Divorce in California: Another exception occurs when an individual receives a gift. For example, if you receive a beautiful piece of jewelry from your spouse for an anniversary or birthday, this gift is generally excluded from the division of assets and debts in a family estate. If, however, the gift could be considered of substantial value, the courts will then look at the asset more carefully and it may be subject to division taking into account the parties’ wealth and finances.

If the asset is determined to be of substantial value, it is community property and must be divided between the parties – unless of course, either party can present a written transmutation agreement changing the character of this asset from community to separate.

3. Inherited Wealth in Divorce in Hong Kong: Over the years, there has been much debate over how inherited funds should be treated in a divorce in Hong Kong and whether these funds should be excluded from division. In Hong Kong, inherited wealth are those assets that come from a source wholly external to a marriage. Like Great Britain, the courts in Hong Kong have regard to the “yardstick of equality” as a starting point, meaning the goal is to divide the asset pool fairly. Courts in Hong Kong may however, veer from this principle and make adjustments, thereby dividing assets “unequally” if after reviewing certain statutory factors, taking into account the whole of the asset pool, reasonable needs, compensation and applying the “sharing principle” if assets exceeds the needs, in addition to the specific circumstances surrounding the divorce, and finds that an individual’s inheritance could be a resource to fulfill and satisfy an individual’s reasonable needs and the needs of the children post-divorce (See the Hong Kong landmark case titled DD v LKW (2010) 13 HKCFAR 537.) As a result, the Court may heed to flexibility in order to find a suitable answer to the circumstances of each case whereby the objective is to reach a just result that is fair for both parties. Thus, unlike California, inheritance funds received by an individual in Hong Kong may be taken into account because it forms part of the asset pool that is a financial resource to one or both of the parties. Stephen J. Peaker, head of the Family Law Department at Oldham, Li & Nie (OLN) and a fellow of the International Academy of Family Lawyers (IAFL) says: “The issue of inherited wealth is becoming more and more prevalent in Hong Kong, both in contested and uncontested cases. The economic success of Hong Kong and the natural passage of time combined have created substantial inherited wealth. One of the key areas of dispute on succession is in relation to family businesses, often with enormous value where one party inherits a business interest. This business can be valued as part of an asset pool and unsurprisingly, this is viewed by the creators of the wealth as inherently unreasonable and has led to the proliferation of generational trusts and the increase in prenuptial agreements.”

It is interesting to note that in Hong Kong, the Court may consider an inheritance even if it has not yet been received, but provided an individual is set to receive an inheritance in the near future or has a perceived resource. Additionally, if you’re involved in a short-term marriage and there are inheritance funds in the asset pool, the courts may not consider the inheritance in the asset division yet if it is a long-term marriage, the courts may include inherited funds, unless these funds were kept entirely separate.

It is important to understand and become knowledgeable of the specific laws of your jurisdiction. Speak with a professional about how to protect your inheritance and what can be done to avoid any issues when dividing assets in your divorce. If you’re getting married, you may want to speak with a family law professional to discuss a prenuptial agreement and ways to avoid any issues in the event of a divorce. Being well prepared will help avoid any heartache in the future!

Divorce and Reconciliation

The decision to divorce is not an easy one. After careful thought, many couples come to the difficult decision to part ways. The divorce process can be excruciatingly painful as families become divided and individuals must navigate the law in obtaining an official divorce. In some cases, there are couples who realize halfway through the divorce process that a breakup of the family is not what they ultimately desire and the path towards reconciliation is forged.
What does reconciliation look like from a legal perspective in Hong Kong? Here are some things to consider when it comes to reconciliation:

1. Legal Ramifications of Reconciliation: If you and your spouse are considering reconciliation during the divorce process, it is important to speak with your solicitor. For example, if you and your spouse are working on your relationship and cohabitate after a separation, this will be important in your divorce as it will be taken into consideration with respect to the separation period. Note that if you and your spouse cohabitate for a period of less than 6 months, then the starting date for the period of separation will remain the same, although the time spent together to work on the marriage will not counted as part of the separation period. Also, when you file a Petition for divorce, you and your solicitor will discuss the issue of reconciliation and you will need to file a Certificate of Reconciliation. If there is a good chance that you and your spouse will reconcile, the Family Court may adjourn your case to allow for the possibility of reconciliation as the Family Court in Hong Kong wants to provide every opportunity for reconciliation. If you and your spouse wish to reconcile during divorce proceedings, you may wish to withdraw the Petition for Divorce. However, speak to your solicitor because if you wish to reconcile after you have obtained a Decree Nisi (tentative court order for divorce), then you must seek leave from the Family Court to rescind the Petition for Divorce which requires specific paperwork that your solicitor can prepare on your behalf and walk you through the process. Remember that if you and your spouse obtain a Decree Absolute, thus legally divorced in Hong Kong, you will now be free to re-marry, even if that means to re-marry one another once again.

2. To Reconcile or Not? Reconciliation is not for everyone. It is certainly a personal decision between you and your spouse. To be effective, both parties must genuinely want to reconcile. Reconciliation also requires effort by both parties to nurture this new relationship. On the flip side, reconciliation may be out of the question if emotional damage by the divorce is so severe and difficult to overcome. If there is a history of domestic violence or emotional abuse or manipulation, reconciliation should be carefully considered with the assistance of psychologists and others trained in the area of domestic violence and emotional abuse. This is particularly important when children are involved.

3. Keep The Lines Of Communication Open: If you hope to reconcile with your ex-spouse, maintain open lines of communication. Try to maintain a sense of civility, if not only for the sake of your children and their best interests. Consider counseling, and do not be afraid to ask your spouse if he/she is willing to attend counseling with you. A counselor can help guide you in the decision to reconcile and help you and your spouse avoid past mistakes in your marriage. You may also learn new skills on how to resolve the issues which led to the divorce in the first place.

Reconciliation should not be taken lightly. It takes significant effort and time. But if successful, it can be a wonderful thing for you and your family.

Unmarried Parents and Child Maintenance

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