Specialist Family Solicitors In Financial Settlements

FINANCIAL SETTLEMENTS FAQs

• 1 DO I HAVE TO AGREE ALL THE FINANCIAL ISSUES BEFORE I CAN GET A DIVORCE?

  The financial arrangements can be agreed separately at any time – before you start divorce proceedings, at the same time, or after the divorce itself has been finalised – though the financial arrangements cannot be finalised until after the Conditional Order. It is usually advisable for agreement to be reached on financial issues and for an order to be made dealing with these issues before the Final Order (the order finally ending your marriage) is made. This is because potential benefits such as widow’s or widower’s pensions and life insurance benefits can be lost in certain circumstances once the Final Order is granted. For this reason it is usual to allow the divorce to proceed to the Conditional Order stage but not then apply to have the Conditional Order made final until financial issues have been resolved.

• 2HOW DO WE DIVIDE UP OUR ASSETS?

  The court has wide discretion when considering financial claims after divorce and there is no set formula or calculation to assist. The court will decide what happens to the assets on a case by case basis with regard to the individual circumstances, applying statute and principles which have developed though case law.

  There are certain factors which the court will apply when considering an application for financial remedy. These include the age and health of the parties, length of the marriage, your standard of living, income, earning capacity, financial resources, needs, obligations and responsibilities.

  If, as in many cases, the assets do not exceed the requirements of the parties and any children then “needs” will be the determining factor. The needs of the children will be given priority and the court may have to divide assets that are non-matrimonial in order to meet their needs, the court will be striving for equality and for fairness but sometimes these have to become secondary considerations because there are insufficient assets for both parties to be suitably re-housed.

  If the needs of the children and each of the parties can be met, however, then other arguments will be considered such as assets having been brought into the marriage by one party alone or contributions to the family wealth due to some exceptional talent or business acumen.

• 3 WHAT HAPPENS TO THE MATRIMONIAL HOME? CAN MY SPOUSE FORCE A SALE?

  Yes, once divorce proceedings have been issued either spouse can apply to the court for an order for sale. The court has the power to make various orders in respect of the family home, including:

  • Transfer of the home to either spouse, with or without the mortgage;
  • Sale and division of the sale proceeds (not necessarily in equal shares);
  • The property to be retained by one spouse until a specified event such as a child reaching 18, perhaps with a deferred interest.

  The court has to give priority to the housing needs of any dependent children however so if there are not sufficient assets to meet both of your needs, priority will be given to the parent with care of the children, to ensure that he/she is suitably housed and their day to day income needs are met. It may be therefore that the court will not allow the house to be sold and orders the parent without care to continue paying some or even all of the mortgage to make sure the children are housed appropriately.

• 4 I GAVE UP WORK TO LOOK AFTER THE CHILDREN AND DON’T REALLY HAVE A PENSION, AM I ENTITLED TO PART OF MY HUSBAND’S PENSION?

  Yes, the factors which will be considered by the court include both spouses’ contributions (including non-financial contributions such as looking after the home and children) and the financial disadvantage as a result of giving up work. The court places equal value on financial contribution through earned income and contribution by raising the children and looking after the home. The court has the power to make orders that pensions be shared in specified percentages and a pension sharing order will mean that a part of your spouse’s pension is removed from his pension and placed in a pension in your name in the same or an alternative pension scheme.

• 5 CAN I BE FORCED TO SELL THE HOUSE?

  The short answer is yes. If the house is in joint names then the other party needs your agreement, and estate agents should refuse to deal with just one party in marketing a property, but it does sometimes happen so beware! A sale can however be ordered by the court if your spouse or partner doesn’t agree. If this is necessary then it should be applied for within divorce proceedings so as to minimise costs and time and to make sure that the needs of any children are properly considered and protected.

• 6 WE’VE AGREED EVERYTHING SO I DON’T NEED A LAWYER DO I?

  Yes you do. In fact you probably need a lawyer more when you have an agreement about money than if you haven’t. If you and your spouse can’t agree then either of you can ask the court to make a decision. You have to issue divorce proceedings first and you will have to attend mediation at least once but if the mediator can’t help you agree then ultimately the Judge will make a decision for you.

  If you have agreed what happens to the house, how other assets are to be divided and whether one of you will pay a monthly amount to help support the other then you must have this in a written consent order and have it approved by a Judge so that it is legally binding on you both and, more importantly, so that there is no ‘come back’.

  Perhaps the most important part of any agreement is that it extinguishes any future claim that either of you could potentially make against each other so that you know your agreement is final and legally binding on you both. If you win the lottery, or if the other party gets into financial difficulties, your agreement remains. If you don’t have a financial consent order the future is uncertain for both of you.

• 7 DO I NEED TO BE DIVORCED BEFORE I MAKE A FINANCIAL CLAIM?

  No. You will however need to issue a divorce and have reached the Conditional Order stage (when the Judge agrees that you have grounds for divorce) before the court will be able to consider any financial agreement that you have reached. In the majority of cases you need to have divorce proceedings issued before you can ask the court to make any orders about financial issues.

• 8 IS IT BETTER FOR US TO AGREE THE FINANCES BETWEEN US?

  Yes. Before you can make an application for the court to deal with finances you have to attend at least one meeting with a mediator. Many couples find that mediation is successful and it is generally much faster and less costly than discussing matters through your lawyers. If mediation doesn’t work, the family courts are set up in a way that encourages you to reach agreement and the Judge will try and help you do this but eventually there will be a ‘trial’ and the court will decide. A Judge might need to decide which of you is telling the truth if there is a factual dispute, and what should happen in your case.

  They will say what assets are really worth and how they should be divided or reallocated and how much, or how little, each of you is able to provide for yourself and to what extent the other person should support you.

  Primarily the court will be looking at the financial requirements of each of you, the Judge will consider what is fair of course but this can be a secondary issue if there are limited resources available. You will have heard cases of ‘being taken to the cleaners’; this is not because the law says it is right that one party takes all the assets, it is because there wasn’t enough to go around and the Judge decided one party needed it all. It is far better, and cheaper, to reach an agreement. The factors set out by law to be considered when dividing the financial resources on divorce are open to wide interpretation.