In our increasingly complicated world, it is becoming more common that high earning professionals do not just receive salary, but also receive sizeable bonuses, stock options and deferred benefits as part of their remuneration packages.

We have long standing expertise in dealing with the challenges that these present, on both sides of the argument.

Base salary

Salary is important in the context of a breakdown of marriage or breakdown of a relationship where there are children, because the base salary will be relevant in respect of either spousal maintenance or child maintenance payable by one to the other. Most base salary elements are fixed and, therefore, it is relatively simple to assess what the per calendar month income will be for that person from this element. In the case of periodical payments for children (child maintenance), there is a set formula of base salary which will be paid towards the care of the child by the absent parent. In respect of periodical payments for a spouse (spousal maintenance), there is no set formula, but the Court will look at the income of the parties, the earning capacity of the party who is seeking periodical payments and the genuine income needs (generously interpreted) of the person who is seeking periodical payments for themselves.

Apart from the risk of redundancy, base salary is fairly stable and predictable.

Bonuses

Cash bonuses are paid in addition to one’s base salary. However, there are wide variations and fluctuations as to how cash bonuses are paid. For example, some bonuses are paid on an open “discretionary” basis, some bonuses are paid upon a set of personal and/or company targets being realised and some bonuses are paid on a sliding or uplifting scale, depending on various factors. Most commonly, they are paid annually, but where they are closely linked to sales targets, they can resemble commissions and be paid much more frequently as a short-term incentive.

If a cash bonus is being paid, then the question of whether the bonus can be considered a normal part of one’s income and, therefore, added to the family income when considering spousal or child periodical payments. It is important to consider from the viewpoint of the person receiving the bonus that the bonus is not guaranteed and, therefore, it would not make sense from that person’s perspective to have any periodical payments due out of their bonus to be expressed as a figure. It can make more sense for that person to have the amount expressed as a percentage of the bonus. However, then the issue arises as to why, if there is a very large bonus, should perhaps a long-separated spouse receive a windfall much in excess of their stated need?

Bonuses paid as shares or stock options

Traditionally, in order to incentivise staff, companies offer share option schemes. This would normally allow an employee to purchase stock at a certain fixed value, no matter what the actual value at the time of exercise. For example, if 1,000 stock options were granted at a “strike price” of £2.00 per share in 2012, not exercisable for two years and at the time of exercise, the stock market price was £3.00 per share, then the employee would be making a 50% gain. Stock options may not be considered as part of income and they may well add to the capital pot, but it does depend upon the circumstances in which they are granted and, of course, it will be relevant as to whether this is a common occurrence in the income stream of that individual.

Deferred vesting is a very common feature, where the options can only be exercised if the employee is still with the same employer after three years for example.

Some companies, particularly banks in the past, granted shares to employees as part of their annual remuneration package. Usually, the shares vested into the name of the employee and delivered at the same time. Again, these can usually be considered as an extension of income, rather than adding to the capital pot, but each case will turn on its own facts.

Claw-back

Due to the recession and financial difficulties post 2008, with many financial professionals coming under more scrutiny and condemnation from various circles, a culture of claw-back of bonuses or shares has been instituted in the City. The wider ramifications of this are not yet in play.

EC rules now limit bonuses to twice salary, which has led to an explosion of creative ways to define extra payments in other terms than “bonus”.

More traditionally, employers especially banks, will seek to claw back certain aspects of their employees’ remuneration packages, for example if they leave the company within a certain period of time a share allotment may be subject to “claw-back”. It is important to note that, in normal circumstances, if a portion of the employee’s remuneration package will be subject to claw-back, then this will very often be offset by any new employer that wants to recruit them, as part of the negotiation package. When acting for the spouse of such an individual, it is important to keep that in mind.

Finally, the taxation rules need to be borne in mind when assessing what is to be a fair deal between the spouses.

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Financial Settlement Scenarios

The scenarios below do not relate to any individual clients of ours but the facts and the outcomes relate to some similar experiences in our practice.

Scenario Analysis Example #1

The Scenario

Mrs G left the home last year due to her husband's alcoholism. The home is in his name and he refuses to co-operate. He works as a Sales Director and has a large pension accumulated from fifteen years with his employer.

Our Solution

Mrs G petitioned for divorce on the basis of her husband's unreasonable behaviour. At the same time we filed a financial application. When Mr G failed to make financial disclosure we obtained an Order requiring him to do so in 14 days or risk imprisonment for contempt of Court.

It was made clear that if he did not co-operate then the Court would make Orders giving Mrs G her share anyway and if necessary Mrs G would be given power to sell the house and to evict him. Mr G then settled the case.

If you have questions, contact us now, we can help you.

Scenario Analysis Example #2

The Scenario

In 1980 Mr G aged 25 was living with his partner.  When she became pregnant he made a Will making her the executor and leaving everything to her.  They separated 2 years later.  The child is now adult.  He re-partnered and had 1 child but the relationship again ended after 2 years.  He continued paying his ex partner’s rent rather than go through the Child Support Agency.  

He met his third partner in 1994 and they had 3 children.  He died in 2010.  He had never made another Will or revoked the one made in 1980, but he had quite substantial assets by the time of his death.  What rights did his ex- partners and 4 children have?

Our Solution

Briefly, Mr G left a huge mess.  His ex-partners challenged the Will in the Courts.  The dependent children had claims.  Did the adult son, who was independent and 28 years old, have a claim?  What rights did the mothers have where they were left supporting children under 18?

Ultimately a judge had to decide on the balance of fairness between the minor children bearing in mind the available resources.  His first partner and adult child did not receive anything.  The cost of sorting this out used almost half the estate.The moral is, make a Will!

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I recently had a one hour pro bono consultation with Samantha Jago. I was really blown away by how much she was able to digest in such a short period of time and even more so by the report which I received shortly after.

Apr 2024   S DF

I had applied for a free consultation and I was contacted in a very short timeframe. Thank you so much for the insightful and thorough consultation, Kevin Danagher. You made me feel at ease and you provided clear expectations with the initial info I had provided... I have now a much better understanding on my query.

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Very balanced, fair and pragmatic advice. Thoroughly recommend!!

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Henry graciously provided his time for a consultation. I found him to be highly knowledgeable, empathetic and he provided excellent advice which put my mind at ease. Would highly recommend Henry and his firm.

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Sep 2023   Mario Ignatov

I only had my initial free review with Amelia yet I already feel much more strengthened in my legal and financial position. I am currently reflecting on the steps I want to take to negotiate my desired outcome of the financial settlement but, when I am ready to use the services of a lawyer, Amelia is definitely the top on my list.

Sep 2023   Nahid Toubia

I had a zoom consultation with Lauren Moir and she was incredible. Very patient, insightful and reassuring. She also advised me based on my previous conversations with another firm and also clarified various positions I am in. Highly recommend.

Aug 2023   Gary Hawes

I was very impressed with the friendly, helpful and professional service offered by Brookman Solicitors. The generous advice and knowledge offered during the initial free consultation has enabled us to have a much better understanding of our case and plan a way forward.

Jul 2023   Peter Jackson

I had a first consultation with Kevin, who very diligently and professionally provided an exhaustive overview of the divorce process and the best approach for my specific case.

Jul 2023   Giulia Matteo

Great service and excellent advice at the initial consultation. I would certainly recommend and use in the future.

Jul 2023   Tom James

Spoke to a kind solicitor this morning who took an hour of her time to talk me through some advice relating to a difficult separation.... She was clear and helpful with her advice, leaving me feeling much more confident with the process ahead of me.

Jun 2023   Luke Taylor

Mr Brookman provided very clear advice that left me with no doubt about the options and next steps. Getting specific advice with the requirements in the different jurisdictions was particularly useful so I won’t need to consult another lawyer outside of the UK

May 2023   Julian Anthony

About The Team

We are a specialist divorce and international divorce family law team, advising clients in the United Kingdom (specifically England and Wales) and throughout the world. We have a very people–orientated approach to working with clients. Henry Brookman has practised law for over 45 years, and our team has a wide range of skills and expertise. We are recommended by the Legal 500 and have been awarded the Law Society’s quality mark, Lexcel.

Partner

Henry Brookman

With over 45 years' experience, Henry Brookman is the senior member of the team. He is described by The Legal 500 as ‘shrewd, savvy, sagacious and highly experienced’.

Partner

Philip Morton

Recommended by The Legal 500, Philip is an expert in all areas of family law, including domestic and international financial disputes, fraud and commercial dispute resolution.

Partner

Natasha Slabas

Expert in all areas of family law, often involving cases that have an international element, including work in relation to financial settlements following divorce.

Partner

Aziz Malik

Aziz is a Partner at the firm and is highly regarded for his expertise on financial matters in divorce and is recommended by the Legal 500.

Partner

Mark Rennie

Mark is the Group Head of the Horsham Family Law team. He specialises in all areas of matrimonial law, including complex divorce and financial disputes, and is recommended by The Legal 500.

Partner

Nigel Winter

A highly experienced solicitor, Nigel has expertise in collaborative law, divorce, contested litigation, relationship agreements, and children matters. Nigel is recommended by The Legal 500.

Partner

Samantha Jago

Partner at our Guildford office and recommended by The Legal 500, Samantha has specialist expertise in divorce, children matters, complex international cases, and is a trained mediator.

Partner

Amanda Glass

Amanda is a highly experienced family law partner providing expert advice on all aspects of family law, divorce and separation with an emphasis on financial remedy cases.

Partner

Alicia Cenizo

Alicia is a Partner in the family team and advises on all elements of family law, particularly private children work, including matters with an international element such as relocation.

Senior Associate

Joanna Potbury

Family law specialist based in Brighton advising on divorce, cohabitation agreements, children, post-nuptial agreements, and domestic violence. Joanna is recommended by The Legal 500.

Senior Associate

Kirsty Kelleher

Kirsty is a specialist family law solicitor recommended by The Legal 500. An expert in divorce, financial matters, child-related disputes and contentious probate cases.

Senior Associate

Kevin Danagher

Kevin specialises exclusively in family law, advising on all aspects of relationship breakdown, divorce, same sex marriage, marital agreements, and international family cases.

Senior Associate

Ella Welsby

Known for her sensitivity and discretion combined with significant expertise, Ella advises on all family issues including high-value and multi-jurisdiction divorce and complex financial and children matters.

Senior Associate

Gemma Garrett

Based in Horsham, Gemma is a specialist advising on all areas of family law including divorce and separation (often involving jurisdiction issues), complex financial matters, and children matters.

Senior Solicitor

Susan Hayes

Susan qualified as a solicitor in 1992 and is based at our Brighton office. She is a longstanding member of the Law Society Specialist Children Panel and Family Law Panel. Susan is also a trained Collaborative Lawyer.

Associate Solicitor

Lauren Moir

Lauren is a highly regarded specialist family law solicitor, based at our Guildford office. She advises on divorce, family finances, children matters, domestic abuse, cohabitee issues, and relationship agreements.

Solicitor

Rachael Au

Rachael is a highly capable member of the family team in Brighton. She specialises in family law, advising on divorce, civil partnerships, financial matters, and children issues.

Solicitor

Amber Matheson

Based at the Guildford office, Amber has experience dealing with family matters including divorce, finances, separation after cohabitation, arrangements for children and leave to remove cases.

Solicitor

Amelia Groom

Amelia has experience across a full range of family matters, including divorce, complex disputes regarding finances that range from trusts through to cryptocurrencies, and arrangements for children.

Accounts Manager

Evdokia Dikova

Eva is an AAT qualified accounts manager and holds full AAT membership (MAAT). She gained her degree in financial accounting from the University of Economics in Bulgaria.

Secretary

Victoria Delatouche

Victoria is a highly experienced Legal Secretary and a long-standing member of the team. She provides secretarial support for the office.

Secretary

Michelle Louison

Michelle provides secretarial support to Henry Brookman. A very experienced family law secretary, Michelle has worked in law for over 12 years.

Front of House Manager

Patricia Antonio

Patricia is an experienced secretary and office administrator, handling the calls that come into the office, greeting clients, and managing office presentation.

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