The seemingly ever increasing cost of living in Cayman is impacting everyone, among them divorcing couples who are having difficulty paying for lawyers or making arrangements to set up separate single-parent homes.
Family lawyer Lynne McDonagh, of KSG law firm, says finances, now more than ever, are a “huge worry” for divorcing parents, and is leading to many of them leaving Cayman.
She says concern over money is delaying them getting legal advice as they may feel they can’t afford attorneys’ fees to draw up a co-parenting plan or sort out the terms of their divorce.
An upcoming change to the collection of stamp duty on property transfers ordered by a court in divorce proceedings will add further pressure, she says.
Leaving Cayman
“The cost of living in Cayman is really affecting parents,” said McDonagh, who explains she is seeing an increase in the number of people seeking divorces, as well as those looking for advice on leaving Cayman because they can’t afford to live here anymore.
“I’m seeing it more because of the cost of living, because of the cost of education,” she said. “So, if one parent wishes to leave the jurisdiction with the children, they require permission of the other parent, or a court order. If there’s no agreement from the other parent and you are trying to get a court order, the burden is on that parent wishing to leave to show the move is in the children’s best interest.”
She added, “You have to show in an affidavit that the proposed removal to the proposed country would provide the child or children with a better overall welfare package. That’s known as a relocation application. And you would have to set out what your proposal is for contact with the other parent.”
In those situations, the court would require a welfare report from either an independent professional or a social worker or child psychologist, so anyone thinking of leaving the jurisdiction with children needs to get specialist advice.
That all costs money.
And after all that is sorted out, and one parent moves overseas with the children, another financial burden opens up.
It is often agreed that the children return for school holidays to spend time with the other parent, meaning the additional cost of flights to and from Cayman.
Or, if the children have remained here, the parent who has moved overseas would need to travel to and from Cayman, and pay for accommodation when staying here.
“For one parent to travel to Cayman, there’s always the question of where Mum or Dad are going to stay because hotels are so expensive. And then you have the car hire. … It’s just another thing that people are facing, and it’s not really talked about,” McDonagh said.
Parents living in two different jurisdictions, trying to share custody of their children, is a complicated matter, she says, and she advises parents to seek specialist advice in such cases.
“Trying to get the contact arrangements, with the cost of living in Cayman, is really difficult, because for a parent travelling here, it’s just too expensive,” she said.
Another issue is health insurance for the children of divorced parents, McDonagh says.
When the couple was together, the entire family could be under one family plan. “When a couple is divorcing, and one parent isn’t working, and if you’re going through medical treatment for something, it’s always an issue the parents have to figure out because obviously if you go to get your own policy, it’s really expensive.”
Stamp duty impact
A change to the stamp duty regulations is likely to put further financial pressure on divorcing couples.
Previously, stamp duty was not payable on property transfers carried out pursuant to court orders, including in divorce proceedings. Under the revised regulations, that no longer applies, and stamp duty is now applicable for the transfer of properties ordered by a court in such proceedings.
In a recent advisory note from by Lands and Survey Department’s chief valuation officer, a clarification regarding the collection of stamp duty in these instances was issued. It stated, “any conveyance or transfers of immovable property which are being transferred pursuant to a court order are chargeable for stamp duty… This includes transfers pursuant to a court order made in dissolution of marriage (divorce) proceedings.”
The advisory further noted that, in the case of divorce, the stamp duty will be calculated based on the market value of the property being transferred, or the consideration stated in the transfer document, whichever is higher.
This change will come into effect on 1 March this year, the advisory stated.
Maintenance payments
The cost of living is also affecting people’s ability to keep up their child-maintenance payments.
“They might be breaching a maintenance order, such that you have to vary the order because the financial circumstances have changed. You’d have to set out the change to the relevant circumstances,” McDonagh said.
Delays in seeking a divorce
Though she doesn’t see this regularly, McDonagh says she has encountered a couple of instances where separated couples are continuing to live together because they simply cannot afford to get divorced.
“I’ve only seen it once or twice,” she said, “where people cannot afford to move out to somewhere else. It’s certainly a valid point that they would need to pay for the cost of two houses instead of one.
“If one parent is moving out, and you’ve got two children, they’re going to have to rent somewhere that is an appropriate size, which leads back to why I think I’ve seen an increase in the number of people wanting to leave Cayman.”
Co-parenting agreements
Especially at a time when financial woes are at the forefront of divorcing couples’ minds, one vital element that should be sorted out as soon as possible, McDonagh says, is a co-parenting agreement, which can be drawn up via mediation.
She says mediation is an incredibly helpful process because it can reduce conflict between the parties involved.
“I’m always surprised by how few co-parenting plans there are,” she said. “I always say to people, if you can write up a good co-parenting agreement, that will benefit the children and it helps the children maintain a close relationship with their parents.
“It also helps you navigate all of those issues, it helps to problem solve. It’s usually one of the first things that I would say to do, when you’re thinking of separating or if you’re in the middle of a divorce.”
Co-parenting classes are offered by the Family Resource Centre, she noted, adding that participating in these together can help rebuild the trust and communication between a divorcing couple.
“If more people sat down and drew up co-parenting agreements from the very beginning, they would save money in the long run. I really, truly believe that, because then you’re all on the same page, you know what’s happening at Easter and summer, and who’s paying what, when one person is going to call or whatever. It really can help people navigate the children issues.”
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