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Treatment of gifts and heirlooms in a divorce

In financial proceedings on divorce, both spouses will be required to disclose their personal belongings, which may include items that they have received by way of gift, including family heirlooms. Such assets usually attach high sentimental value and have been given to the spouse with a general understanding that they will be kept ‘within the family’ and passed down through generations. Therefore, it is understandable that tensions often arise in respect of the treatment of gifts and heirlooms on divorce.

This article will highlight the Family Court’s approach in Hong Kong when dealing with assets such as gifts and heirlooms.

Recent case

Our firm was recently involved in the case of W,LT v GWH also known as HGW [2021] HKFC 142 concerning a dispute over a painting that had been in the family for over 120 years. It was directly acquired by the husband’s great grandfather, passed on to the husband’s grand aunt by inheritance, and then to the husband’s father by inheritance. The issue arose when the wife alleged that the family painting formed part of the marital assets that were subject to division.

The husband had entered into a family agreement with his father to purchase the painting as an advance inheritance to enable his parents to buy a home for retirement. Subsequently, they entered into another agreement where the husband transferred the painting back to his father.

In considering the wife’s application to set aside the subsequent transfer, the Judge held that the agreements between the husband and his father was entered into with very specific issues in mind, the central one being that the painting should be preserved and if possible, retained by the family for future generations.

The Judge declined to set aside the transfer and concluded that the painting was clearly an inherited property. It was initially acquired by the husband’s family by way of inheritance and from a source wholly external to the marriage. In reaching her conclusion, the Judge referred to LKW v DD (Ancillary Relief: Guidelines) [2011] HKFLR 106 where Mr Justice Ribeiro PJ said inter alia the following:

‘87. The source of an asset may provide a reason for excluding it from the sharing principle on the basis that it is not an item of matrimonial property. Of course, in many cases, no question of any distinction between matrimonial and non-matrimonial property will arise. But where there are assets which may be capable of being so differentiated, section 7(1)(a) implicitly requires the court to consider whether any part of such assets ought in fairness to be excluded from the sharing principle. Differentiation might also be seen as a requirement of section 7(1)(f) if the source of a particular asset suggests that it is an independent and unmatched contribution by one of the parties.

89. The existing case-law identifies two classes of assets as possible candidates for exclusion on the basis of source. The first involves property acquired during the marriage by one of the parties from a source wholly external to the marriage, such as by gift or inheritance. The second involves assets derived from a business or an investment conducted solely by one party (sometimes called “unilateral assets”).’

Marital or non-marital assets?

When a gift is received as part of inheritance or a family heirloom is passed to a family member, unless there is an express intention that it should be passed on or returned, the Court may need to determine if such asset will form part of a spouse’s property and financial resources and taken into account when determining the division of assets.

In the UK case of White v White [2001] 1 AC 596, which was followed in Hong Kong in LKW v DD, Lord Nicholls explained that:

‘Property acquired before marriage and inherited property acquired during marriage come from a source wholly external to the marriage. In fairness, where this property still exists, the spouse to whom it was given should be allowed to keep it. Conversely, the other spouse has a weaker claim to such property than he or she may have regarding matrimonial property.’

The nature of the inheritance is also important. As Lord Justice Ward said in the UK Court of Appeal case of Robson v Robson [2010] EWCA Civ 1171:

‘the ancestral castle may (note that I say “may” not “must”) deserve different treatment from a farm inherited from the party’s father who had acquired it in his lifetime, just as a valuable heirloom intended to be retained in specie is of a different character from an inherited portfolio of stocks and shares. The nature and source of the asset may well be a good reason for departing from equality within the sharing principle.’

The circumstances of the case, the nature and the value of asset and how it was acquired are all factors that will be taken into account when deciding whether an asset falls into the category of marital or non-marital property.

How can you protect gifts and heirlooms?

Any assets including heirlooms, gifts or inheritance that are brought into a marriage by one party can be protected if there is evidence of intention to exclude such assets from the matrimonial pot. They should be kept separate and not be intermingled with the marital assets and a prenuptial or post-nuptial agreement can help safeguard such assets.

While pre-nuptial agreements are not binding on the courts in Hong Kong, the law in this area has developed following the Supreme Court of England and Wales decision of Radmacher v Granatino [2011] AC 534 where it was held that:

‘the court should give effect to a nuptial agreement that is freely entered into by each party with a full appreciation of its implications unless in the circumstances prevailing it would not be fair to hold the parties to their agreement.’

This position was endorsed by the Hong Kong Court of Final Appeal in SPH v SA [2014] HKLRD 497.

Conclusion

The Family Courts have very wide discretion in matrimonial cases. However, there is a general view that gifts and heirlooms will be treated as ‘non-marital’ assets unless it would be unfair to exclude such assets from the matrimonial pot. While disputes over gifts and heirlooms are rare, these can be avoided if there is evidence of intention of the treatment of inherited gifts and heirlooms, including for instance a pre-nuptial or post-nuptial agreement.

New management board and partners at RKKW

The new year brought promotions at RKKW – Kwasnicki, Wrobel & Partners – Jaroslaw Szewczyk and Karol Szymanski became new managing partners, and Marcin Jasinski and Piotr Letolc joined as partners.

As of December 1st 2021, Jaroslaw Szewczyk and Karol Szymanski have become the new managing partners of RKKW – Kwasnicki, Wrobel & Partners, while the founders of the firm, Radoslaw Kwasnicki and Krzysztof Wrobel, have taken up their newly-created positions as senior partners.

One of the first outcomes of these changes will be that the founders of the firm will focus on key projects, strategic planning and the firm’s most important clients. The senior partners will continue to exercise general supervision over the firm’s operations and will be actively involved in the development of the ongoing social and cultural projects for which RKKW is well known.

The new managing partners will perform duties related to the day-to-day management of the firm and its organic growth as an entity offering comprehensive legal advice to business and entrepreneurs, mainly in the areas of corporate law, corporate disputes, PE/VC transactions, mergers and acquisitions and private client matters. RKKW plans to continue the strategy of building a specialized law firm providing top-quality legal services based on an individual approach to the client, while systematically increasing the areas of support offered.

Jaroslaw Szewczyk is a PhD in law and an advocate. He specializes in mergers and acquisitions (M&A), private equity transactions, competition law, restructuring law, financial regulations, and capital market law, including services for entities in the FinTech sector. He has worked for private equity funds, public and private companies, including the information technology (IT), telecommunications, finance, media and biotechnology sectors. Within the law firm, he is responsible for developing transactional (M&A, PE/VC), regulatory and criminal (White Collar & Compliance) practices.

Karol Szymanski specializes in litigation proceedings, including corporate disputes, advisory services for private clients, services for public companies and other capital market entities. He represents parties in civil and commercial litigation. He deals with mediation and negotiation of complex business settlements. He has worked for companies with State Treasury shareholding, investment funds, individuals and private companies. He advises on public market transactions, both hostile and friendly takeovers. He has participated in several restructuring projects related to changing the functioning patterns of complex capital groups in which public companies held significant positions. Within the law firm, he is responsible for the development of the litigation practice (corporate, infrastructure and investment disputes), corporate law, support for capital market entities and the private client area.

In addition, as of January 1st 2022, Marcin Jasinski, attorney-at-law, and Piotr Letolc, advocate, have joined RKKW as new partners. The internal promotion of these lawyers crowns their long-standing cooperation with RKKW and underlines the importance of the departments they directly supervise.

Marcin Jasinski is responsible for all real estate projects, both in the transactional (M&A) and project areas, including extensive infrastructure investments. He also deals with the service of French-speaking clients as a head of the law firm’s French Desk.

Piotr Letolc, on the other hand, is responsible for reorganization processes related to changes in the structures of commercial companies and capital groups formed by them and also manages corporate services for the firm’s clients.

RKKW is a Polish law firm cooperating permanently with nearly 70 lawyers, specializing in widely understood commercial law. RKKW’s clients include some of the largest domestic companies, including those with capital commitment from the State Treasury, as well as affluent individuals and institutional investors.

Shareholder Stan Thompson Appointed Executive Director of the Iowa Civil Rights Commission

Litigation shareholder Stan Thompson was recently appointed Executive Director of the Iowa Civil Rights Commission by Governor Kim Reynolds.

“Protecting the civil rights of Iowans is one of the most important functions of state government,” said Gov. Reynolds in a recent press release. “Stan’s extensive experience in business litigation, practicing for the past 36 years, coupled with his knowledge in ethics and professional conduct will make him a valued leader for the commission.”

Over the last 36 years, Stan was a preeminent Iowa commercial litigator tackling complex issues. He tried approximately 40 cases to juries across Iowa. Stan’s clients – Iowa banks, businesses, medical practices, and construction companies – depended on his ability to efficiently process often complicated information as he worked toward a solution in their case.

During his time at Dentons Davis Brown, Stan served in several roles, including the Board of Directors, Litigation Division Chair and as a mentor to countless litigators over his three decades of service.

“Stan’s impact on our firm has been immeasurable. We appreciate his contributions as an advocate, colleague, and leader in the legal profession, in Iowa and nationally. We wish him the best and take great pride in his service to the State,” said Dentons Davis Brown President John Pietila.

In addition to his law practice, in 2002 and 2004 Stan competed in two highly competitive US House of Representatives campaigns that gained national recognition.

We appreciate Stan’s great service he provided clients and wish him the best as he moves into his role.

What is the Health and Care Worker Visa?

Caring for others is not just a calling; it’s also a profession. People who work as health and care workers are employed by the government and private sector providers to provide services for people who require help with their day-to-day activities.

Within the UK, there are many jobs available in this field across all different sectors. For example, you can be a home care worker, looking after elderly people in their own homes; a support worker, helping people with disabilities attend school or work; or a nurse, providing physical and emotional support to people in hospitals, GP surgeries, or nursing homes.

The Health and Care Worker visa is a UK work visa for people who want to work in the care sector. It only allows you to work in supported living accommodation, private homes, or hospitals as part of your job role. If you’re thinking of coming to the UK as a Health and Care Worker, to work with some of our most vulnerable people and make a real difference in their lives, then this visa is for you. Contact london-immigrationlawyer.co.uk to know the requirements, timelines, and eligibility criteria for the health and care visa and for other visa types such as the remain to leave visa. If you get legal guidance from the experts that your chances of getting your visa approved will be increased significantly.

Health and Care Worker Visa

With the recent scenario of Pandemic, the UK urgently needs a lot of health professionals. These professionals provide essential care to patients in hospitals and homes and are vital to the NHS and social care system. This shortage of health and care workers is most acute in London, where there is one vacancy for every three applicants. The purpose of introducing The Health and Care Worker visa category was to cover this shortage

The UK health and care worker visa is designed to allow non-European Union (EU) nationals to come to the UK and carry out a job within the health and social care sector. It allows non-EU nationals to work in the UK for 2 years, as long as they are paid at least £35,000 a year.

Many people are taking advantage of this visa to get better jobs or to simply serve humanity. The latest figures from the Home Office reveal that the number of vacancies being filled by health and care worker migrants has increased by over 50% in just three years.

What skills are required?

There are several skills and qualifications, and also a certain level of experience that is required to qualify for a healthcare worker visa. Doctors, nurses, senior care, and other health care providers are eligible for health and care visas. Apart from basic qualifications, the applicant is tested for basic skills and mannerisms to ensure that they are professional and responsible in performing their duty.

 Requirements of the visa:

  • You must be older than 18
  • You must have acceptable health profession
  • You must work for Home Office approved employer
  • Sponsorship certificate from your employee
  • English proficiency certificate
  • Valid TB certificate
  • Financially stable
  • Criminal record certificate

Health care worker visa process cost

The application fee varies due to different factors.

  • If the certificate of sponsorship is issued for more than 3 years, the fee is £464.
  • If the certificate of sponsorship is issued for less than 3 years, the fee is £232.

A discount of £55 is provided for citizens of some countries including Turkey, France, Germany, Italy, Norway, etc.

A health and care visa is a great opportunity for foreign health care workers and other professionals to give their services to the people of the UK and build their lives in the UK. The UK authorities give a great priority to health care workers when it comes to giving visa opportunities. Providing health care is a noble profession and it is not only beneficial for the visa holder but for the country to be able to have skilled health care workers all around the world. Speak to Total Law immigration lawyers to get more information regarding health and care visas. You must get the best legal guidance to get acceptance to your health and care visa for the very first time. 

Our expert immigration lawyers can ensure positive results for your application for indefinite leave to remain so do not waste any more time and seek legal guidance from the best. We guarantee that we will make the complicated process of getting the visa quite simple.

Environmental Laws and Regulations Affecting US Offshore Wind

In a new edition of Pratt’s Energy Law Report, White & Case global environment & climate change partner Seth Kerschner and associate Brittany Curcuru provide an overview of the federal environmental regulations that proponents of offshore wind may have to navigate to get projects approved, built, launched—and eventually, decommissioned.

The team said, “The Biden administration has signaled strong support for renewables, including wind. The Interior, Energy and Commerce departments announced a shared goal to deploy at least 30 gigawatts (GWs) of offshore wind in the United States by 2030. As part of that resolution, BOEM intends to hold new lease sales and finalize the review of at least 16 Construction and Operations Plans for wind development, which could bring more than 19 GWs of wind capacity online by 2025.”

See the full article here

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For more information please speak to your local media contact.

Shoosmiths Opens First International Office

Shoosmiths has opened its first international office.

The firm says the decision to launch in Brussels comes in response to growing client demand for EU competition, regulatory and trade law advice. This uptick in demand, it says, has become an “increasingly relevant factor” among its corporate clients in the “post-Brexit environment”.

Shoosmiths also hopes the move will enable it to tap into the best legal talent Brussels has to offer, particularly in the areas of international trade, competition, EU regulation, and privacy, and data.

The Firm has 13 UK offices across city locations including London, Manchester, Birmingham, Leeds, Reading, Nottingham and Edinburgh.

The firm has drafted in former EY competition leader Kiran Desai to head-up its new overseas operations. Desai, a dual-qualified lawyer in Belgium and in England and Wales, was also previously the managing partner of the Brussels office of Mayer Brown.

Personal insolvency verses matrimonial law

By Ian Defty, partner at Begbies Traynor and insolvency advisor at Legal Futures Associate  Integrated Dispute Resolution.

It is fair to say that there has, for many years, been a “difference of opinion” between the law governing personal insolvency and matrimonial law with each “side” believing that they are right and should take precedence.

The principal, sometimes conflicting, legislation is covered in the Insolvency Act 1986 and the Matrimonial Causes Act 1973. However, the differing courts can and will give wide discretion when determining whether and how a married couple’s assets are to be divided.

In accordance with the Matrimonial Causes Act 1973 there is an expectation that assets accrued during the marriage should be regarded as jointly owned between the spouses and normally be divided equally between the parties, whereas assets held by one spouse or the other before the marriage should be left to that party unless there is good reason to divide them. The matrimonial home is usually always considered as a matrimonial asset to which the sharing principle applies.

In personal insolvency the overriding principle is to see that the creditors as a whole get dealt with fairly and in accordance with insolvency law which may often seem to go against matrimonial law which seeks to ensure that a spouse and maybe children are dealt with first and foremost.

In general terms, all property belonging to or vested in the bankrupt at the commencement of the bankruptcy forms part of the bankruptcy estate and will vest automatically in the trustee in bankruptcy immediately upon their appointment. On the face of it, this may appear unhelpful to the bankrupt’s spouse, especially if they are divorcing.

Section 306 of the Insolvency Act 1986 sets out that the bankrupt’s estate shall vest in the trustee immediately on their appointment taking effect or, in the case of the official receiver, on his becoming trustee.

The Insolvency Act 1986 goes on to set out the relevant insolvency legislation regarding what defines a bankrupt’s affairs (S.283) and the restrictions on dispositions of property (S.284).

Section 283 defines a bankrupt’s estate as;-

  • all property belonging to or vested in the bankrupt at the commencement of the bankruptcy, and
  • any property which by virtue of any of the following provisions of this Part is comprised in that estate or is treated as falling with the preceding paragraph.

Section 284 sets out the restrictions on dispositions of property as follows; –

  • Where a person is made bankrupt, any disposition of property made by that person in the period to which this section applies is void except to the extent that it is or was made with the consent of the court or is or was subsequently ratified by the court.
  • Subsection (1) applies to a payment (whether in cash or otherwise) as it applies to a disposition of property and, accordingly, where any payment is void by virtue of that subsection, the person paid shall hold the sum paid for the bankrupt as part of his estate.
  • This section applies to the period beginning with the day of the making of the bankruptcy application or (as the case may be) the presentation of the bankruptcy petition] and ending with the vesting, under Chapter IV of this Part, of the bankrupt’s estate in a trustee.
  • The preceding provisions of this section do not give a remedy against any person –
  1. in respect of any property or payment which he received before the commencement of the bankruptcy in good faith, for value and without notice that the bankruptcy application had been made or (as the case may be) that the bankruptcy] petition had been presented, or
  2. in respect of any interest in property which derives from an interest in respect of which there is, by virtue of this subsection, no remedy.
  • Where after the commencement of his bankruptcy the bankrupt has incurred a debt to a banker or other person by reason of the making of a payment which is void under this section, that debt is deemed for the purposes of any of this Group of Parts to have been incurred before the commencement of the bankruptcy unless —
  1. that banker or person had notice of the bankruptcy before the debt was incurred, or
  2. it is not reasonably practicable for the amount of the payment to be recovered from the person to whom it was made.
  • A disposition of property is void under this section notwithstanding that the property is not or, as the case may be, would not be comprised in the bankrupt’s estate; but nothing in this section affects any disposition made by a person of property held by him on trust for any other person.

If bankruptcy precedes an order made under the Matrimonial Causes Act the legal and practical outcome is straightforward and the assets vest in the trustee. Difficulties arise when the order under the Matrimonial Causes Act 1973 precedes the bankruptcy. The impact of the making of a bankruptcy order on matrimonial proceedings will therefore depend on the point that the matrimonial proceedings have reached.

Where a person has been declared bankrupt (or a bankruptcy petition has been presented against the debtor) prior to the making of a financial remedy order under matrimonial law, the matrimonial court is restricted in the financial remedy order it can make. Generally speaking, the matrimonial court cannot make a property adjustment order as the bankrupt’s estate will have vested in the trustee under the Insolvency Act 1986.

In accordance with S.336 of the Insolvency Act 1986, where an application is made by the trustee to realise the matrimonial home after a year since the vesting of the bankrupt’s estate in the trustee, there is a presumption that the interests of creditors outweigh all other considerations that will include that of the spouse (and other family members such as children).

The transfer of an interest in the matrimonial home pursuant to a consent order made under s.24 of the Matrimonial Causes Act 1973 constitutes a “disposition” for these purposes and is therefore void (Re Flint [1993]). This was reinforced in 1994 with Woodley v Woodley (No. 2) [1993] 2 FLR 477 by where the Court of Appeal held that the presentation of a bankruptcy petition is not a disposition for the purposes of s.37 of the Matrimonial Causes Act 1973 and cannot be challenged as an attempt to avoid an order for matrimonial relief. Therefore, the correct way to attempt to challenge an allegation of a spouse using bankruptcy as a fraudulent device to defeat his/her divorcing spouse’s matrimonial claim ‘s claim is to seek for the bankruptcy order to be annulled under s 282(1)(a) by the court exercising insolvency jurisdiction. It is not open to a judge of the Family Court to use the Civil Procedure Rules to transfer insolvency proceedings to the Family Court be dealt with as part of the financial remedy proceedings, per Arif v Zar [2012] EWCA Civ 986.

A matrimonial property transfer order made after the presentation of the bankruptcy petition is a void disposition by the debtor for the purposes of s.284 of the Insolvency Act. In 2010 a matrimonial settlement by ex-spouses which had not been finalised by the time a creditor issued a bankruptcy petition against the husband was struck out by the court as it constituted a disposition of the spouse’s property, per Warwick v Yarwood [2010] EWHC 2272.

Greg Williams, a barrister at Coram Chambers, London, who specialises in matrimonial finance cases, said: “During the last decade, ultralow interest rates combined with a generally high rate of employment has meant that our day-to-day divorce cases rarely feature bankruptcy issues. That may be about to change: the impact of Covid 19 and Brexit is likely to be felt this year. If personal or household debts becomes unsustainable, practitioners and their clients need to be alert to potential insolvency issues. Assets which would otherwise form part of the matrimonial pot can be lost entirely to a successful bankruptcy petition. Or we may see an increase in applications from trustees in bankruptcy to sell family homes to the chagrin of the remaining spouse and children.”

For more information or to discuss an insolvency matter within matrimonial law please contact IDR on admin@integrated-dr.com or 0207 8465 600.

 

Irwin Mitchell Boosts Construction Team

Jonathan More joins Irwin Mitchell’s London office from chambers practice, Spencer West LLP, where he was the lead construction disputes partner.

His appointment takes Irwin Mitchell’s specialist construction team to 18, with four partners. The team is led by Mark Clinton and sits within the firm’s property division, which now numbers 28 partners and 147 qualified lawyers.

The law firm’s growth has been party driven by legal arguments about cladding works since the 2017 Grenfell Tower fire.

Before joining Spencer West, Jonathan More was a partner at Fenwick Elliott, where he worked on a variety of construction dispute related work. He also has eight years’ experience of working in-house. His work from 2009 to 2015 with Transport for London and Crossrail led to him becoming an expert on NEC contracts, with experience of all other major standard contract forms.

Mark Clinton, head of construction & engineering at Irwin Mitchell said: “Jonathan’s arrival will be a real boost to our national construction and engineering  practice, particularly in London and will complement the arrival of construction partners Edward Davies and Richard Allan in Manchester just over 12 months ago.”

“Our team has been inundated recently, supporting clients dealing with ‘the cladding crisis’, which shows no sign of abating in the short term. Jonathan’s appointment comes just at the right time and we will benefit from his great experience and strong reputation. His entrepreneurial skills will help us as we drive forward the growth of our contentious practice.”

Jonathan More said: “I am very excited to be joining Irwin Mitchell. The continued growth the firm has achieved in recent years is evidence of its success and entrepreneurial approach in the provision of legal services. The opportunity I have been given to join and help grow the firm’s construction team from London is unique and one which I am certain will see us continue to thrive in a sector that is so important to day-to-day life.”

 

Allen & Overy Boots European Antitrust Team with Sidley Austin Hire

Magic Circle law firm Allen & Overy has added to its London team with the hire of Sidley Austin’s former global co-head of antitrust.

Kristina Nordlander has over 23 years of experience in broad areas of European Union antitrust litigation and has been with Sidley Austin since 2005. Nordlander focuses on big tech and life sciences, with clients on either side of the Atlantic. She was responsible for founding the Women’s Competition Network (WCN) in Brussels in 2008, an international organisation of female senior competition law and policy professionals. Following the appointment to her new role, Nordlander will split her time between Brussels and her base in London.

In a statement, Allen & Overy antitrust co-head Philip Mansfield said, “Her depth of experience and range of expertise in terms of clients and geography fit perfectly with our strategy for growth. Kristina’s hire is an illustration of our commitment to investing in our global antitrust team, as a strategic priority of the firm.”

Morgan Stanley To Pay $60 Million To Resolve Data-Breach Lawsuit

Morgan Stanley has agreed to pay $60 million to settle a lawsuit by approximately 15 million customers who claim the multinational investment bank exposed their personal data when it failed on two occasions to properly retire some of its older information technology.

On Friday, a preliminary settlement of the proposed class action was filed in Manhattan federal court, still requiring approval of US District Judge Analisa Torres.

The bank’s customers are set to receive two years of fraud insurance coverage at a minimum, with each customer able to apply for reimbursement of up to $10,000 in losses.

The bank’s customers had accused it of failing to decommission two wealth management data centres in 2016 before the equipment was sold on to unauthorised third parties. Customers also claim that some older servers containing data went missing after Morgan Stanley transferred them to an external vendor in 2019, which court papers show the bank then later recovered.

Morgan Stanley has denied wrongdoing in agreeing to settle and said in settlement papers that it has made “substantial” upgrades to its data security practices. In an email on Monday, Morgan Stanley said it had notified all customers who may have been affected.