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Divorce itself does not automatically resolve the financial aspects of a relationship ending.
The financial matters are dealt with as a separate matter to be agreed between both parties. The agreement then needs to be formalised in a document called a Consent Order, which is approved by the court. Once approved it is a Court Order and is binding. If the parties reach an agreement on the division of the finances, this can be dealt with by way of a paperwork exercise and there is no need to attend Court in person.
What are the key considerations?
The starting point is a 50/50 split of all assets, regardless of source. However, all of the circumstances of both parties will be taken into account. Matters such as income, earning capacity, mortgage capacity, capital resources and health are all relevant considerations when looking at achieving a ‘fair’ outcome.
The length of the marriage and the standard of living enjoyed during the marriage are both matters that should also be taken into account. If there has been a seamless period of cohabitation prior to the marriage, this will be added on when looking at the length of the marriage.
The court will give first consideration to any minor children and/or children with special ongoing additional needs.
The key concepts that the court looks at are those of ‘needs’, ‘compensation’ and ‘sharing’. Some of the key questions we are asked by clients in relation to financial matters are answered below:
I paid the deposit for our family home. Will I get this back?
Unless you have a pre or post-nuptial agreement stating that the deposit should be returned to you if the marriage was to breakdown and it is fair in all the circumstances to uphold this, the deposit you paid will likely fall back into the matrimonial pot for division between you.
In contrast to this, if you have separate property that has never been mixed with matrimonial monies, it may be possible to ringfence this provided the needs of the other party can be met without utilising the non-matrimonial property. However, if there are insufficient funds available from purely matrimonial assets, it will have to be taken into account in the division.
I have a pension that I accrued prior to the marriage. Can I ringfence this?
It may be possible to ringfence a pension that was acquired prior to the marriage if the needs of the parties can be met without it when taking into account the key considerations.
I have inherited money following our separation. Can I keep this?
An inheritance that has not been mixed with matrimonial monies would be considered a non-matrimonial asset. However, it may have to be used, in all or part, to meet the needs of the parties if there are insufficient matrimonial resources available.
How can I understand what I am entitled to in my specific case?
It is essential to ensure that you have a full overview of all of the income, assets and liabilities so that you can be clear about what there is available for division. This is often achieved by both parties completing a document called a Form E disclosure, which is exchanged between the parties with evidence to support. This then enables both parties’ to seek advice on their entitlement and the options available for division.
How can I reach an agreement with my spouse about how the finances are to be divided?
There are many ways of reaching an agreement between you. As a Firm, Family Law Partners offer all forms of alternative dispute resolution including collaborative law, mediation, arbitration and solicitor led negotiations to help our clients avoid a Court process, which can be stressful and expensive. The court is available as a last resort or in cases where an agreement cannot be reached by any other means.
In all cases, the consent order should be prepared by a qualified lawyer as this is a technical document that once approved by the court is legally binding and could have ramifications if it is drafted incorrectly. The consent order sets out clearly what each party is entitled to receive and when and how they will receive it. It will also specify whether the parties’ can make further claims against each other in the future or whether there is a bar against such claims being made.
Our team of specialist lawyers understand that agreeing the division of finances can often be one of the most difficult matters to resolve. Taking specialist advice early is usually the best way to understand the issues in your case, the options available to you and the pros and cons of each.
Zoë Summers is a Specialist Family Solicitor and Collaborative Lawyer in our Brighton Team.
If you would like further information about what you are entitled to in a divorce, then please do not hesitate to contact a member of the team for confidential advice about your specific circumstances.