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Friday, 16 November 2012

Friday Guest Blog - Legal Advice on Private School Fees

By Paula Milburn, Family Partner at North West law firm Brabners Chaffe Street

There has been a marked increase in the last twelve months in parents seeking specific legal advice about private school fees. There are real areas of concern over:

• Parents falling out with grandparents who agreed to contribute towards the costs of private education and have then changed their views as a result of falling out with the parents over contact arrangements.

• Parents experiencing financial pressures as a result of the economic downturn and school fees adding to those pressures. Financial worries are one of the major causes of marital breakdown. When school fees are added to the equation this can be the trigger that leads to separation.

• Parents disagreeing over private education or the timing of private education. Some parents are adamant that private is best and want their children to be privately educated from nursery education onwards, whereas others are keen to limit fees to secondary education given the quality of local primary state education in their area.

• Parents disagreeing over the type of private education for their children – this can sometimes be tied in with differences in religious views or over the type of school that would best meet their child’s needs. Some parents believe in “hot-housing”, whereas their spouses can be equally adamant that this type of educational environment or boarding will not meet their particular child’s needs.

If there is a marital breakdown the whole issue of private education is tied up with standards of living. If parents are pursuing state education then, for example, a mother may argue that her housing need is greater than if the children were being educated privately because of the need to purchase a house in a good school catchment area. If children are being educated privately then the parent paying the child support could argue that there is a less money available to pay spousal maintenance, whereas the parent looking after the child would argue that there is a greater need to provide financial support because it is essential to have the right house to go with the right school [think of sleepovers] and the money to pay for the school extras, ski trips etc.

In either scenario the children need all the trimmings and, whatever the level of income, parents are always extremely anxious to avoid their children’s standard of living suffering on marital breakdown.

Top tips for parents:

• Think about the costs of educating siblings. Is it an option to only privately educate the eldest child or the child with specialist needs such as dyslexia? If private education for one child is not an option then parents need to prepare by looking at schools that offer sibling discounts.

• If school fee plans are not an option then extended family may be willing to help with school fees in tax efficient ways such as income distributions from trusts, ISA savings and as part of estate planning and lifetime giving. If parents are relying upon extended family help to pay school fees think about asking for the monies to be ring fenced or put into a school fees fund to avoid priorities changing in future and get advice about how historical income distributions from trusts might impact on divorce settlements.

• Look at how fees would be paid in the event of death or critical illness and consider the impact of the costs of various insurance premiums when looking at the affordability of school fees.

• And finally, if parents do separate they should not let the marital dispute get out of hand – the more the solicitors get in fees the more there is to find to pay school fees or university costs. This point may seem obvious but it is surprising how often couples are prepared to spend thousands of pounds in legal fees arguing over who should pay school fees with no one stopping to think that the child is nearly 16 so their remaining school fees will be less than the couple’s combined legal bill in resolving who should pay. A good solicitor will point that out!


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