Divorce and Finances – Expert family law advice in South West London and Surrey
Dividing assets and financial settlement
Starting a divorce application will usually mean that the family assets need to be looked at and divided. The court will treat the financial matters arising from your divorce separately to the divorce itself, though proceedings usually run alongside each other and the divorce application will not be finalised until the financial issues have have been addressed, and ideally resolved.
A financial settlement is intended to divide marital assets in a fair and equitable way, to meet each party’s needs in terms of capital, housing and income.
How can Peacock & Co help?
How the finances of divorcing couples are dealt with can be a difficult and contentious issue. We use our expertise and experience to help you achieve the best possible settlement, as no two cases are the same. Many cases are resolved by consent without having to issue court proceedings, usually by mediation, an alternative dispute resolution process, or via negotiation through lawyers.
We will work with you to provide clear tailored advice to achieve the best possible financial settlement for you, whether you are in mediation or court proceedings.
We advise on all financial aspects following divorce including:
- The division and transfer of property – will the family home need to be sold, or can it be transferred to one party?
- Business assets – does a party have a claim on the other’s party’s business assets?
- Pensions both in the UK and abroad – should sharing one party’s pension be considered?
- Spousal and child maintenance – is there a case for one party paying money to the other in addition to child maintenance?
- Interim spousal maintenance or payment of legal costs – whilst the financial negotiations are ongoing, does the weaker financial party need interim spousal maintenance and/or a contribution from the other party towards their legal costs?
- Overseas assets – how should these be dealt with?
- Emergency orders such as freezing orders – do we need to prevent one party from selling off or disposing of assets before a settlement is agreed?
- Enforcement of financial orders – has the other party stopped paying maintenance or is refusing to sell the property?
- Variation of spousal maintenance orders – have your circumstances changed and you need to reduce your payments to your ex-spouse or, as the receiving party, do you need to increase the amount you are receiving?
We can also assist separating partners in civil partnerships.
Here are some commonly asked questions we receive about dividing assets:
You can resolve the finances directly with your spouse, at mediation or through solicitor negotiations. It is important that you provide an honest and complete account of your finances and exchange key financial documents such as bank statements, pay slips, pension statements and recent property valuations before negotiating a settlement. Once an agreement is reached it must be embodied in a court order know as consent order. The consent order is sent to the court to be approved, once you have reached the Conditional Order stage in the divorce. As it can take six to 12 months to negotiate a settlement (and longer if in court proceedings), it is important to take legal advice at the start of your divorce to understand your rights and responsibilities.
There is no formula or fixed calculation for describing how to divide marital assets. Each party must have their housing needs met and be able to meet their day-to-day expenses. Pension provisions must be looked at to see whether there should some element of pension sharing. The needs of any children are prioritised. Both the court and lawyers consider a list of factors, known as the ‘S25 factors’ to decide on a fair and equitable outcome for both parties. Such factors include the ages of the parties, length of marriage and earning capacity.
Even if you do not own any joint assets, you should still have a consent order approved by the court. Without an approved court order, you will remain financially linked to your spouse until a ‘clean break’ order is approved by the court. If your earnings increase significantly, you receive a large inheritance or win the lottery, a clean break order will provide certainty that your spouse will not be able to make a financial claim against you in the future. A clean break will not be appropriate in all cases so please contact us for further advice.
The family home is a matrimonial asset even if it is registered in the sole name of one spouse. The starting point for a division of matrimonial property is 50/50 with consideration being given to your respective housing needs and the needs of any minor children. If the family home is in the sole name of your spouse, you should register a matrimonial home rights notice at the Land Registry against the property which will prevent your spouse from selling or mortgaging the property without your knowledge.
Spousal maintenance is based on the income needs of the financially weaker spouse. If there is a shortfall between their income and outgoings the higher earning spouse may have to pay spousal maintenance. You will have to negotiate how much is to be paid and for how long, considering the standard of living during the marriage and the paying party’s income. An order can be made on a ‘joint lives’ basis or for a fixed term depending on the circumstances of the case. Spousal maintenance is a complex area, so it is worth taking further advice.
You can make an application to the court for a financial remedy order should you be unable to reach an agreement or negotiations break down. It is a requirement to attend mediation before making a court application. The court will set a timetable for the resolution of the finances and there are usually three hearings including a final hearing.
Both parties will need to provide full disclosure of their finances (this also applies if negotiations are underway without court proceedings) and it may be necessary to instruct experts to prepare pension reports or carry valuations of properties or business.
The second hearing is known as the Financial Dispute Resolution hearing (FDR) and at this hearing, the judge will assist the parties in trying to negotiate an agreement. If this proves impossible on the day, the court will list a Final Hearing, where a decision will be imposed by the judge on the parties. Even if court proceedings have started you can still reach an agreement outside of the court process at any stage of the proceedings – but it is important that you seek legal advice at an early stage.
Court proceedings are lengthy and it can take up to two years to reach the Final Hearing stage, but your lawyers would be working to resolve matters by negotiation in parallel with the court proceedings. Private FDRs are also an option, where you would pay for a judge, as this can often be much quicker than waiting for the standard court process.
If you require advice in relation to divorce or a family law matter, please get in touch.
- Tel: 020 8944 5290
- Email: [email protected]