Our team of family solicitors are experienced in financial issues and will look at all the issues that may impact on your case and their importance to you and advise how to address these in the most appropriate, sensitive and cost-effective way.
Divorce and finances
Sorting out finances is often one of the main concerns for separating couples. Thoughts as to what should happen to the family home, how other assets should be divided and whether maintenance should be paid, by one spouse to the other as well as to the children, can be overwhelming.
How Family Law Partners can help with your divorce financial settlement
When parties separate having been living together as a couple outside a marriage or Civil Partnership;
On a Judicial Separation;
On the dissolution of a Civil Partnership;
Where claims need to be made against a parent by or on behalf of a child;
In the event of a partner or spouse’s death and where no reasonable financial provision has been made.
What remedies or options are available?
This will depend on your status and the particular process you are looking to pursue. Early advice is recommended to ensure your position is protected. Whichever process is considered, you will be required to disclose your financial position. Our team of divorce financial settlement solicitors recommend that you start getting your paperwork in date order so it can be reviewed in a cost-effective manner prior to detailed advice being given.
As well as advising you on the best way to proceed, we can also help you in drafting all the relevant documents and advise on a strategy and likely outcomes.
We may refer you to an independent financial advisor for an initial consultation to understand your personal circumstances. They will offer independent, expert advice on a range of financial planning issues including pension advice, tax planning, retirement planning and investment management.
Answering common questions about divorce and finances
What is a divorce settlement?
A divorce settlement is an arrangement, or decision, that is made regarding finances upon divorce and is often one of the main concerns for separating couples.
When a marriage is dissolved, the financial ties between the spouses need to be addressed to ensure a fair and equitable distribution of assets and financial resources.
The settlement may cover various aspects, including the division of property, savings, investments, pensions, and other financial assets, as well as arrangements for spousal maintenance and child support, if applicable.
Most separating couples are able to reach agreement regarding the division of assets and finances, either by talking together or with assistance from a third party such as a mediator or within the collaborative practice.
However, if an agreement cannot be made then either spouse or Civil Partner can make an application to the court for a Financial Remedy Order. A Financial Remedy Order is a legal ruling issued by a court to settle financial matters during divorce or dissolution of a marriage. It determines how assets, debts, and income will be divided between the parties involved, ensuring a fair and equitable distribution of financial resources.
It is crucial to reach a divorce settlement, as it provides both parties with financial clarity and allows them to move forward with their lives independently after the marriage has ended.
What am I entitled to in a divorce settlement?
In a divorce settlement in the UK, what you are entitled to is determined based on various factors. You may be entitled to a share of marital assets, which can include properties, savings, investments, and pensions acquired during the marriage. Spousal maintenance may also be awarded based on financial needs and earning capacity.
Overall, if the court becomes involved, it will aim for a fair distribution of assets and finances.
For those cases where an application to the Court is made, each judge will consider the evidence presented in each particular case. This means the outcome of financial court proceedings can be quite difficult to predict and settlements can vary from one separating couple to the next. The court’s first consideration is the welfare of any children involved. Alongside that, when determining an appropriate financial settlement, the following factors will be considered:
Each person’s income, earning capacity, property and other financial resources, available now or in the foreseeable future, including earning capacity.
Each person’s financial needs, obligations and responsibilities relevant now or in the foreseeable future.
The standard of living enjoyed by the family before the breakdown of the marriage
Each person’s age and the length of the marriage.
Any physical or mental disability.
Contributions made or likely in the foreseeable future to make to the welfare of the family, including any non-economic contribution.
The conduct of each of the parties, if that conduct is such that it would in the opinion of the court be inequitable to disregard it (although it is rare for conduct to be taken into account and the reason for the marriage or civil partnership breakdown is very unlikely to be a conduct issue for the purposes of a financial application).
The value of each of the parties to the marriage of any benefit which that party will lose the chance of acquiring.
It’s crucial to seek legal advice to understand your specific entitlements fully. Couples are encouraged to engage in negotiation or mediation to reach a mutually agreeable settlement. If an agreement cannot be reached, the court may make a decision regarding the division of assets and financial arrangements.
Who gets what in a divorce settlement?
In a divorce settlement, the division of assets and financial arrangements depends on several factors, including the couple’s specific circumstances and the principle of fairness.
The objective of the family court is to achieve an outcome which is ‘fair’ to both parties. With this in mind, there is the common misconception that matrimonial assets are simply divided 50/50 when a couple divorce. Instead, what happens in practice is that the court will measure the division of assets against a benchmark 50/50 to assess whether anything other than that is justified.
For example, there would not be an equal asset split where one person’s (or the children’s) needs require a higher proportion of the capital assets, e.g. for housing, or if one person came into the marriage with significantly greater assets than the other. As we explain in more detail in this article here, a 50/50 split is therefore quite unusual.
The court considers factors like the length of the marriage, the financial contributions of both spouses, their respective needs and responsibilities, and the welfare of any children involved.
Commonly, assets like property, savings, pensions, and investments are divided equitably between the parties. The goal is to achieve a fair outcome that ensures both individuals can move forward independently and maintain a reasonable standard of living.
Couples are encouraged to work collaboratively or seek mediation to reach a mutually agreeable settlement, but if an agreement cannot be reached, the court may intervene to make a decision.
How long do divorce financial settlements take?
The duration of financial settlements in divorce can vary significantly depending on several factors. On average, the process can take anywhere from several months to over a year to reach a resolution. The complexity of the case, the level of cooperation between the parties involved, and the backlog of the family courts can all influence the timeline.
In straightforward cases where both parties agree and have limited assets and finances to divide, the process can be relatively quick. They may opt for mediation or negotiate directly with the help of their respective solicitors.
However, in more complex scenarios, such as high-value assets, business interests, or disagreements over child custody and financial provisions, the process tends to be more protracted. Legal complexities may require expert financial analysis, valuations, and court hearings, which can extend the timeline.
To expedite the settlement process, individuals are encouraged to work collaboratively, seek mediation when possible, and ensure full financial disclosure to avoid unnecessary delays. It is essential to consult with an experienced family solicitor to navigate the complexities and ensure the process is completed as efficiently as possible. Ultimately, each case is unique, and the duration of the settlement process will depend on the specific circumstances of the divorce.
Can you divorce without a financial settlement?
It is possible to obtain a divorce without a financial settlement, but it is not advisable. When a couple decides to divorce, there are two separate legal processes involved: the divorce itself (the dissolution of the marriage) and the financial settlement (the division of assets, properties, and financial responsibilities).
While you can obtain a divorce decree without addressing financial matters, it leaves both parties vulnerable to potential future claims. Without a formal financial settlement, either party may have the right to make claims against each other’s assets or income even after the divorce is finalised.
It is highly recommended that couples go through the financial divorce settlements process to secure a clean break and avoid future disputes. This involves both parties providing full financial disclosure and negotiating a fair division of assets and financial responsibilities. If an agreement cannot be reached through negotiation, the matter may be resolved in court.
Obtaining a legally binding financial settlement ensures that both parties’ financial rights and responsibilities are protected, providing clarity and certainty for their future post-divorce. Therefore, it is in the best interest of both parties to address financial matters during the divorce process and obtain a formal financial settlement.
What is a financial clean break after divorce?
A financial clean break after divorce refers to a legal arrangement that completely severs the financial ties between the former spouses, ensuring that neither party has any ongoing financial obligations or claims on the other’s assets or income. It is a crucial component of a divorce settlement, providing both parties with financial independence and closure.
In a clean break agreement, all assets, properties, pensions, and debts are divided and allocated between the parties, and any future financial claims are waived. This means that once the clean break order is approved by the court, neither spouse can make financial claims against the other in the future, regardless of any changes in their circumstances.
To achieve a financial clean break, both parties must fully disclose their financial positions to each other and reach a mutual agreement on the division of assets and financial responsibilities. This agreement is then formalised in a consent order, which is submitted to the court for approval. Once the court approves the order, it becomes legally binding, and the financial ties between the parties are severed.
A financial clean break provides certainty and peace of mind to both individuals, allowing them to move forward with their lives independently and without the risk of future financial disputes.