Legally Privileged Confidential Without Prejudice
David Reynolds and Elaine Reynolds
MEMORANDUM OF UNDERSTANDING (example)
David Reynolds and Elaine Reynolds have been in mediation with Julia Warnes, mediator, in order to resolve various issues arising from their separation/divorce.
Four mediation sessions took place between 22nd September 2013 and 17th December 2013 and resulted in their mediated proposals set out below.
This memorandum is legally privileged and ‘without prejudice’. It does not record or create a legally binding agreement between them. They understand that they may take this document to their legal advisors to be used as the basis for a legally binding agreement subject to the advice they receive.
An open statement of financial information accompanies this memorandum. They understand that this may be produced to the court and have had the necessity for full and complete disclosure explained to them.
This memorandum may, of course, be produced to legal advisors upon the basis that it is and remains a privileged document.
Legal Advice
They have both been informed of the importance of obtaining legal advice during and after the course of mediation.
Background information
David is 47, (dob 27/04/1966) and is a telephone engineer. Elaine is 41, (dob 26/02/1972) and works as a supermarket assistant.
They have two children, William 13, dob 01/08/2000 and Siobhan 7, dob 28/08/2006.
Elaine and David have been married for 15 years since June 1998. They separated in June 2013.
Elaine is currently living in the marital home with both children and David has been living in rented accommodation for last three months nearby, at 28, Summersby Avenue, Crawley, West Sussex.
Both parties and the children are considered to be in good health.
Neither party has formed a new relationship or is cohabiting.
There are no court orders currently in place.
The principles guiding negotiations
Elaine and David wished to arrive at proposals that would ensure that the children were able to stay in the family home with Elaine. They wanted to ensure the needs of the children were considered first and foremost. David would need accommodation large enough to ensure he could have overnight visits from the children.
David was also keen to ensure that he retained full ownership of his longstanding pension, built up over the last 30 years.
Summary of proposals:
1) To provide accommodation for the children with Elaine, preferably to stay in the family home.
2) For David to achieve a two or three bedroomed accommodation, in the same area so that the emotional impact on the children is lessened, i.e. familiarity with their locality and surroundings.
3) That the children can stay at the same schools to lessen any disruption.
4) That David retains full share of his pension.
Divorce/Separation
David and Elaine have been separated since 15th June 2013. Neither party has yet filed for divorce. The proposals in this memorandum are to form the basis of a Consent order to be included in their divorce proceedings in due course.
Arrangements for the children
The children currently reside at the family home, 33 Home Drive, Crawley. The intention is that the children continue to live there with Elaine.
They have agreed two overnight visits with David each week (Tuesday and Thursday, collected after school by David), and alternate weekends from Saturday morning 10 am until Sunday evening until 6pm.
Both parties have agreed to ensure contact telephone numbers are kept up to date and provide an second emergency number to call if either party becomes unavailable, i.e. Grandmother.
Elaine and David have agreed that an element of flexibility should be built in, particularly around school holidays and events such as Christmas and Easter.
Both have agreed to minimise disruption to the children’s routine as much as possible.
Child Maintenance for William and Siobhan
David and Elaine have agreed the sum of child support without the necessity to involve the Child maintenance Service directly. They have however, used the CMS calculations to arrive at a sum agreed by both parties.
A sum of £311.00 pcm has been agreed and will be payable on the 16th of each month, paid directly by Standing Order into the Santander bank account.
This amount will be payable until both children leave full-time education, or age 19 whichever becomes sooner.
On the anniversary of this agreement, the amount will be reviewed and increased in line with the current RPI and the Standing Order amended accordingly.
Insurance for child support/spousal maintenance
David has agreed to nominal spousal maintenance in the sum £1 per annum. Spousal maintenance has been agreed in the unlikely event that Elaine is unable to work or to look after the children in the future (or until they reach the age of 19 or leave full time education, whichever becomes sooner)
David will be taking independent financial advice over the possibility of starting a Family Income Benefit policy, which will secure monthly maintenance payments to Elaine in the event of his death.
The family home and future living arrangements
The family home is 33 Home Drive, Crawley, West Sussex. The current market value is £210,000. The outstanding mortgage is £45,000 and after sale costs leaves £160,000 in equity.
It was important to both David and Elaine for the children to remain in the family home with their Mother if at all possible and for David to achieve accommodation nearby.
It has been agreed that the ownership of the family home is to be transferred to Elaine as a whole to ensure that the children can remain there.
Elaine has been advised that with the increase in her current income, the Nottingham Building Society have agreed a decision in principle that the current mortgage can be transferred into her sole name. They have also agreed that David can be released from the mortgage. Elaine will continue to live here with the children in perpetuity.
No additional charges are to be levied against this property.
Pensions
Both Elaine and David are to retain their own pensions. David’s final salary scheme has a CETV of approx. £110,195 as at September 2013.
Elaine has a frozen pension with a CETV of £ £11,161 as at September 2013.
There are to be no pension sharing orders.
Other Assets
Summary:
1) David to retain full share of the Scottish Widows Endowment Policy. Elaine agrees to rescind any part of this policy to David.
2) David to transfer his share of the Norwich Union Endowment Policy to Elaine.
3) David to retain the shares in both British Telecom and the Halifax.
4) David to retain the sum of £25,263 in his Nationwide Account.
5) Elaine to retain the sum of £206 in the Egg Account.
6) Both parties to retain their own vehicles.
7) David has agreed nominal spousal maintenance in the event of Elaine becoming unable to work or look after the children due to ill health.
Liabilities
David has agreed to take responsibility for the joint Lloyds bank loan in the sum of £2000 and also to sign an undertaking indemnifying Elaine from any further responsibility to this debt.
Elaine is to retain responsibility for the credit cards in her name i.e. Egg, Tesco and Barclaycard credit cards.
Household Contents
This issue will be dealt with between them by agreement.
Future Inheritance prospects
Neither David nor Elaine anticipates an inheritance in the foreseeable future and they wish all future claims between them to be dismissed.
Tax implications
David and Elaine understand that it is their responsibility to take advice on any potential tax implications arising from these proposals.
Wills
David and Elaine are aware of the effect divorce has on Wills and will take legal advice on the making of new ones at the appropriate time.
Timetable and means of implementation of proposals
They will take legal advice on the proposals in this memorandum and implement them as soon as practicable thereafter.
On completion of the transfer of the mortgage to Elaine, they will close the joint Lloyds bank account 4422.
Both parties agree that David’s solicitor, George Coles & Sons will prepare the Consent Order and will share the costs of this and any relevant disbursements.
Return to mediation
They understand that they may return to mediation at any time if both wish to do so.
Summary of Proposals
1) To transfer David’s share of the family home to Elaine.
2) The children, William and Siobhan, are to reside with Elaine in the family home.
3) David to have overnight access to the children twice weekly and every other weekend.
4) To transfer David’s share in Norwich Union policy to Elaine.
5) David to retain the Scottish Widows policy.
6) David to retain shares in British Telecom and the Halifax.
7) David to retain Nationwide savings account.
8) Elaine to retain Egg savings account.
9) Both parties to retain own pensions.
10) Both parties to retain own vehicles.
11) David to take full responsibility for Lloyds bank loan.
12) David to pay nominal spousal support in the sum of £1 per annum.
13) David to pay child maintenance in the sum of £311 pcm.
Affordability of proposals
David / ElaineNet Income / 1815 / 1121 (this is based on Elaine taking recent financial advice after increasing her working hours, to now obtain Working Tax credit)
Child support / -311 / 311
Total income / 1504 / 1432
Expenditure
Housing costs / 500 / 250
Utilities / 198 / 217
Financial commitments / 55 / 102
Transport / 87 / 85
Household expenses / 220 / 317
Personal expenses / 122 / 105
Recreation / 106 / 90
Children’s expenses / 40 / 186
Total / +176 / +80
Elaine and David have agreed that recreation and personal expenses may have to be adjusted in the short term whilst that all adjust to their new ways of living.
Effect of Proposals
Assets / David / ElaineEquity in the family home, 33 Home Drive, Crawley / 160,000
Nationwide Savings Account 1133 / 25,263
Egg 0066 / 206
Santander Bank Account 2200 / 81
Scottish Widows Insurance Policy / 20,986
Norwich Union Insurance Policy / 7531
British Telecom shares / 5800
Halifax shares / 2300
Ford Fiesta / 2800
Fiat Uno / 3800
Total assets / 57,149 / 171,618
LESS LIABILITIES
Lloyds bank loan / 2000
Egg credit card / 3120
Tesco credit card / 1972
Barclaycard credit card / 1586
Total liabilities / 2000 / 6678
TOTAL ASSETS LESS LIABILITIES / 55149 / 164940
PENSIONS
British Telecom / 110195
British telecom (frozen) / 11611
TOTAL / 110195 / 11611
Summary / 165,334 / 176,551
This memorandum of understanding records the agreement negotiated in mediation with Julia Warnes at Sussex Peaceful Solutions Family Mediation Service.
Date: 17th December 2013