After the emotional fall-out the end of a relationship brings, what next? It might seem an obvious starting point, but it is surprising how few people considering divorce have an accurate and up-to-date picture of all their assets, income and liabilities – especially if, for the most part, their spouse handled the family finances. Don’t shy away from reviewing your finances: it is wise to gather the relevant financial documents at an early stage. However, be careful not to take any confidential documents belonging to your spouse by opening their post or accessing their emails – doing so can have potential criminal and civil consequences. Equally, the courts take financial disclosure very seriously and if it subsequently comes to light that certain assets have not been disclosed you risk the agreement you have reached being set aside by the court and considered afresh.
A common misconception is that if the marriage has broken down due to adultery or unreasonable behaviour, the ‘wronged’ party should be in line for receiving a greater share of the matrimonial assets. In reality, only very serious personal or financial misconduct may impact on the division of assets. The starting points for a division of matrimonial assets is 50/50 which must be balanced with the needs of the parties and any minor children.
More immediately, if your spouse has moved out of the family home you may have concerns about paying the mortgage and other outgoings. In this situation an application can be made to the court for interim maintenance to be paid by the higher earning spouse to cover essential outgoings and can also include a contribution towards legal fees.
Reaching a financial settlement does not have to be a long, drawn out and costly process – and alternatives to ending up in court can save you in both time and money. Try and keep the communication channels open with your spouse to find a mutual agreement. If communication between you has broken down there are other options too – such as mediation, arbitration and negotiation through a solicitor.
Once you have reached a financial settlement it must be embodied in a consent order drawn up by a solicitor and sent to the court to be approved. It is only at this point that the agreement becomes legally binding and enforceable. Without it, the door is left open for future claims by your spouse.
It is worth remembering that divorce has tax implications – do seek advice from a tax specialist early on so you can factor this into the financial settlement. A tax liability might arise depending on the timing of the transfer of any assets and for the spouse who has left the family home. Equally, until the divorce is finalised you will remain each other’s next of kin – so now is the time to make or review your will and ensure that your assets pass according to your wishes.
If you would like to discuss any of the issues here please contact Dimple Patel on 020 8053 0394 or [email protected].
For more information on our specialist teams and how we can help you, contact us on 020 8944 5290.