Divorce and Finances: What You Are Entitled To

What We Can Help You With

The divorce process ends the marriage. It does not automatically sort out the finances.

The house, the pensions, the income, the savings, the debts, the business interests: these require a separate legal process. Without a financial order from the court, claims on each other’s assets can remain open for years after the marriage has legally ended. Most people are not aware of this until it becomes a problem.

Our family team advise on financial settlements from the start of a separation to the final order, whether that is reached by agreement or through court proceedings.

What Financial Remedy Covers

A financial settlement can deal with:

• The family home and any other property
• Savings, investments and shares
• Incomes
• Pensions
• Business interests
• Debts and liabilities
• Spousal maintenance and clean break orders

How The Law Approaches Finances

The court does not apply a fixed formula. It looks at what is fair and reasonable, taking into account all of the circumstances of the case and a range of factors set out in the Matrimonial Causes Act 1973.

The welfare of any minor children comes first. After that, the court considers each person’s income, earning capacity and financial resources, their financial needs and obligations, the standard of living during the marriage, the age of both parties and how long the marriage lasted, each person’s contribution to the family whether financial or otherwise, and in limited circumstances the conduct of the parties. The court will consider the rights the parties will lose if the order is made.

No two financial settlements look exactly alike. What is fair in one case can look very different from another, even where the numbers are similar.

Pensions

Pensions are consistently one of the largest assets in a divorce and the most frequently overlooked. A pension built over a working life can be worth more than the family home, but because it is not immediately accessible it tends not to register in negotiations the way property does.

There are different ways to deal with pensions on divorce: pension sharing, pension offsetting and pension attachment. Each has different long-term implications. Where pensions are substantial, taking independent financial advice alongside legal advice is worth considering.

Reaching an Agreement Without Court

Court proceedings are not always necessary. Most financial settlements are reached through negotiation between solicitors, mediation or a combination of both.

Where agreement is reached it needs to be written into a “Consent Order” and submitted to court to be approved and if approved would become legally binding. An informal agreement, however clearly worded, does not have the same effect and does not dismiss future claims wither party to the marriage may have against the other.

When Court is Needed

Where negotiation fails, financial remedy proceedings give the court the power to decide. The process involves both parties giving full financial disclosure, setting out their assets, income and financial position, with a series of court hearings.

Most cases settle before a final hearing. Knowing what a court would be likely to decide, and being able to demonstrate that clearly, puts you in a better position in negotiations whether or not proceedings are ultimately issued.

Your Questions, Answered

Questions About Your Financial Position After Separation or Divorce?

We will explain clearly where you stand and what your options are.