Divorce Alimony
How to calculate alimony in Hong Kong divorce?
Is alimony necessary?
In real life, applications for property distribution and alimony are mostly filed by the woman. Although many women continue to work outside the home after marriage, because most of them focus on taking care of their families and children, their financial capabilities are usually not as good as those of their men. During marriage and after divorce, they may be financially dependent on their husbands for care and need to receive alimony. The best way to solve this problem is for the divorcing couple to agree on how to arrange property distribution and alimony. Doing this can avoid going to court, wasting time and legal fees. In principle, this kind of agreement is valid, but if either party is dissatisfied with the self-distribution agreement, they can still apply to the court to request the court to make appropriate property distribution and alimony orders. According to the Matrimonial Proceedings and Property Ordinance, either spouse may apply for ancillary relief. “Ancillary relief” is an order requested from the court when the two parties cannot reach a consensus and agreement on the distribution of property and alimony.
Alimony
Maintenance
That is, the applicant’s reasonable monthly living expenses, including rental accommodation expenses, meal expenses, medical expenses, transportation expenses, etc.
Children's living expenses
When the court exercises its power regarding the financial support or property arrangements of children, it has the responsibility to take into account the reasonable living expenses required for the interests of the "children of the family".
Community Property/Matrimonial Home Arrangements
"Property" generally refers to any property (such as the matrimonial home), which may include but is not limited to property, shares and deposits, regardless of whether the source is gift, inheritance, salary or business income.
How is alimony calculated?
According to Section 7(1) of the Matrimonial Proceedings and Property Ordinance, when the court determines the method and amount of alimony and property distribution, in addition to taking into account the behavior of the parties to the marriage and the individual circumstances of the case, the court will also consider the following seven factors :
✅The income, earning capacity, property and other financial resources that each party to the marriage has or is likely to have in the foreseeable future;
✅The financial needs, burdens and responsibilities that each party to the marriage faces or is likely to face in the foreseeable future;
✅The financial needs, burdens and responsibilities that each party to the marriage faces or is likely to face in the foreseeable future;
✅The respective ages of the parties to the marriage and the duration of the marriage;
✅Physical or mental incapacity of either party to the marriage;
✅The contribution made by each party to the marriage to the welfare of the family, including contributions resulting from the care of the home or the care of family members;
✅In the case of divorce or annulment proceedings, consideration will be given to the value of any benefits (such as pensions) that either party will lose as a result of the dissolution or annulment of the marriage.
In many cases, one of the most important purposes of the court’s exercise of discretion is to provide the financially capable party with appropriate alimony to the other party and the children of the family so that they can maintain their lives. Under appropriate circumstances, the court will also give a reasonable distribution of property to a dutiful applicant and recognize the applicant’s contribution to the family and children during the marriage. Therefore, although the seven factors in section 7(1) of the Matrimonial Proceedings and Property Ordinance do not mention that the court must make a fair judgment when exercising its discretion, these seven factors can also be brought into play according to the individual circumstances of the case. Different effects allow the court to make a fair decision.
The exercise of the discretionary power laid down by the Court of Final Appeal involves the following five steps: (Dispute over family property in divorce):
Prenuptial Agreement Discretion
Since the case of LKW v DD established some important principles, such as equal treatment of male and female roles in the family and equal distribution of family property, it is easier for spouses with relatively weak financial capabilities to apply to the court for equal division of family property than before. Divorce will increase the financial burden of the other party. risk (a large amount of family assets will have a chance to be affected). One solution to this problem is a prenuptial agreement, and prenuptial agreements have attracted much public and legal attention. A prenuptial agreement is an agreement that a man and a woman sign before getting married. If they unfortunately divorce in the future, the agreement will make arrangements for the distribution of family property. The advantage of this approach is that when both parties abide by the prenuptial agreement, they can avoid property disputes in the event of divorce. And it usually targets the financially weaker party (usually the wife), so that she does not receive the property distribution and alimony that she should receive according to the law after the divorce. At present, there are still no express provisions on the legal validity of prenuptial agreements in Hong Kong and the United Kingdom.
Alimony concept for low income families
If the past income of both parties to the divorce was meager, and their future income will not be too high, and one person's income cannot even be self-sufficient, let alone pay alimony. However, in some cases, if the respondent has the financial ability to pay alimony, the court will exercise its discretion and ask the party with better financial ability to support the weaker party, especially the child, to protect the rights of the child.
Middle class family alimony concept
The income of middle-class families still has a considerable surplus after deducting expenses, and it is necessary for the court to distribute these family assets.
If the female applicant still has financial ability, when exercising its discretion, the court will take into account the principle of encouraging the female to return to work and start a new life. If the woman is not frail and sick, she should be self-reliant, and there is no reason to expect the man to make retirement arrangements for her. It can be seen from this that when the woman has financial ability, the court does not need to issue an order for alimony.
If the respondent has wasted family assets, the court can also "add" the wasted assets to the family assets table, or award all remaining assets to the applicant.
In some cases, the man concealed assets or income, or even abused the bankruptcy process in order to make the woman's application fail. Before the court made an order for alimony, the man failed to inform the woman of her situation.
He filed for bankruptcy (that is, declared that he was unable to repay his debts) and was approved by the court without objection. After the woman is informed, she can successfully apply to the court to annul the man's bankruptcy order in accordance with the Bankruptcy Ordinance. The reason is that the man was actually able to repay his debts when he applied for bankruptcy. In order to make the woman's claim in the divorce case unsuccessful, the man deliberately concealed his assets and income and exaggerated his debts and expenses. Therefore, the man's filing for bankruptcy constituted an abuse of judicial process.
Very wealthy family alimony concept
When the case involves a very wealthy family, the issues at issue focus more on principled legal concepts. In these cases, the family's wealth far exceeds what the divorcing parties will need for a lifetime of luxury. In other words, maintaining a lavish standard of living after divorce is not a problem.
Although the law does not stipulate a presumption of equal sharing, when judges exercise their discretion in accordance with the law, they should adopt the criterion of equal sharing unless there are special reasons. Neither spouse's corresponding positions during the marriage, or the different divisions of labor within the marriage, should be subject to legal discrimination or receive unequal treatment (non-discriminadon of gender role). This is also one of the elements of fair sentencing. When making a ruling, the judge should not regard the applicant's reasonable living needs as a decisive factor, otherwise it will limit the right of the wife (or the party who is mainly responsible for taking care of the family and children) to share the family property; furthermore, the husband's The necessities of life are no more than that of the wife. It is unfair to leave the remaining family assets to the husband after deducting the necessities of life.
The wealth of many Hong Kong families is created jointly by both parties to the marriage. Once divorce occurs, either party has a reasonable expectation of receiving a fair award based on the principle of equal division.
In November 2010, the Hong Kong Court of Final Appeal clarified the principles for Hong Kong courts to exercise discretion in the distribution of divorce assets in the case of LKW v DD. The four guidelines are:
a. For the purpose of fair judgment
The court’s reasons for considering Section 7(1) of the Matrimonial Proceedings and Property Ordinance
When factors are considered, the implicit purpose is to reach a fair verdict.
b. Equal treatment (non-discrimination of gender role)
Fair sentencing requires that gender and family roles should be treated equally, that is, running the household and taking care of the children should not be discriminated against compared to those who want to make money to support the family.
c. Equal sharing (equal sharing, or "equal sharing principle") In order to ensure fairness and equal treatment of gender and family roles, judges will test the fairness of property distribution based on the "equal sharing principle" unless there are special reasons.
d. The court will not allow micro-examination of past events
That is, except for special cases, the court will not allow one party to a marriage to claim that his contribution to the family far exceeds that of the other party, nor will it allow one party to slander or belittle the other party. Contribution to the family. Micro-examination of the past often only hinders settlement by consuming the time and resources of the parties and the court, increasing animosity.
Quote From: ISBN 978-962-05-3728-1@2015
Ancillary relief orders that may be made by the court
(1) Periodic payment order
A periodical payments order refers to a court ordering the payer to pay a periodic amount in future income. If the payment is overdue, the payee can ask the court to order enforcement. The maximum payment period for periodic payments lasts until the death of the payee or payor, or the date of the payee's remarriage, whichever is shorter.
For example, the court orders that the man must pay the woman a regular monthly payment of NT$3,000 as alimony after the divorce. If the woman remarries after one year, the order will terminate on the date of the woman’s remarriage; if the woman does not remarry, but the man will remarry after one year If the man dies, the order will terminate on the day of the man's death.
If the financial circumstances and needs of the parties or the children change in the future, either party can apply to the court for a variation order to increase or decrease the amount of the periodic payments. Therefore, although the periodic payment order will not automatically terminate when the payer remarries, if the remarriage results in a change in the payer's economic status, the payer can apply to the court for a variation order.
In order to ensure that the payer fulfills its obligations, the law stipulates that if the payer defaults on payment without reasonable excuse, or the payee believes that the payer will not pay the amount on time, the payee may apply to the court for an attachment of income order (attachment order). of income order), withholding the payer’s personal interest to pay alimony that is in arrears and will be paid in the future. An income garnishment order can be made by the payee to the court or by the court on its own initiative.
(2) Lump sum payment order
A regular payment order is usually a monthly payment, while a lump sum payment order is a lump sum payment. Depending on the circumstances of each case, the amount of the lump sum order may be large or small. However, if the respondent is able to pay the applicant's alimony in a lump sum after the divorce, it will be beneficial to both parties, because they can break away from the emotional and financial relationship more cleanly, and the applicant will not be able to remarry even if he remarries. will have an impact on this.
(3) Property transfer order
A transfer of property order is a court order directing one party to a marriage to transfer property owned to the other party or to any "children of the family". The property referred to in this package can include cars and antiques, but the most common one is definitely property. Property can solve urgent housing needs and is often an important family property in Hong Kong.
(4) Delivery Arrangement Order
A settlement of property order means that the court orders one party to a marriage to make a settlement arrangement for the other party with certain property owned by the other party.
For example, after marriage, the husband goes out to work while the wife stays at home to take care of the children. The husband takes a loan from the bank and buys a building for the whole family to live in. Ten years later, the loan was paid off and the value of the building had increased many times. If they divorce and both parties agree that the wife will exercise custody of the children after the divorce, how should the children and mother handle the housing needs? Although the building is owned by the husband, the court may, in appropriate circumstances, order him to transfer the building to his wife and make it hers. This is one way to solve the housing needs of the wife and children. Another possibility is that the court orders the husband to use the building as a settlement arrangement; in other words, the husband must transfer the property to the wife's name with the purpose of allowing the wife and children to live in the building together until the children grow up (or reach the age of 18). years), the building will then be sold, and the couple can divide the sale price equally or distribute it in other proportions. This is a common settlement arrangement. The advantage is that the husband does not completely lose his interest in the property, and the housing needs of the wife and children are also met.
(5) Property sale order
Sale of property order means that the court orders one or both parties to the marriage to sell the property they own. For example, the court can order one or both parties to sell a building after divorce and distribute the sale proceeds to the divorcing parties in a certain proportion. The advantage is that both parties can immediately fairly and clearly distribute the property saved during the marriage. But the disadvantage of this approach is that the amount of money each receives is limited, which may not be enough for the woman to buy a residence for herself and her children to live in. Therefore, the court will take into account the respective housing needs of the divorcing parties and the special circumstances of each case before deciding what order to make.
(6) Abolition of property rights disposal order
If the court considers that one party to the marriage has sold or moved out of Hong Kong in order to prevent the other party from receiving family assets, the court may issue an avoidance of disposition order to stop the above behavior or cancel the relevant transaction. An order to abrogate property rights applies to property rights dispositions made within three years before the date of application for the order.