Divorce Financial Settlement Solicitors
Dividing up financial assets can be one of the trickiest parts of a divorce
In most marriages, there is a property and other financial assets that might need to be divided up between you. It is often the trickiest part of the divorce. Each marriage or civil partnership is unique and there is no one formula for working out the settlement.
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Instead, there are guidelines to follow. The starting point is to share your combined assets equally but the following factors, known as the Section 25 factors, have to be taken into account as well:
(a) the income, earning capacity, property and other financial resources which each of the parties to the marriage has or is likely to have in the foreseeable future, including in the case of earning capacity any increase in that capacity which it would in the opinion of the court be reasonable to expect a party to the marriage to take steps to acquire;
(b) the financial needs, obligations and responsibilities which each of the parties to the marriage has or is likely to have in the foreseeable future;
(c) the standard of living enjoyed by the family before the breakdown of the marriage;
(d) the age of each party to the marriage and the duration of the marriage;
(e) any physical or mental disability of either of the parties to the marriage;
(f) the contributions which each of the parties has made or is likely in the foreseeable future to make to the welfare of the family, including any contribution by looking after the home or caring for the family;
(g) 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;
(h) in the case of proceedings for divorce or nullity of marriage, the value to each of the parties to the marriage of any benefit which, by reason of the dissolution or annulment of the marriage, that party will lose the chance of acquiring.
Our lawyers are experienced in helping you to find your way through those guidelines and achieving settlement whether by negotiation or through Court proceedings.
In most cases, it is meeting both parties’ reasonable needs, with the children’s needs whilst they are dependent being a first consideration, usually decides the settlement. This means that even cases with very modest assets can be challenging in order to meet both parties’ needs.
The Court can make Orders for the payment of lump sums, transfer of sale of property and other assets, pension sharing or attachments and maintenance.
Even if you are able to reach an agreement yourselves, it is important to have the terms of the agreement drawn up as a Court Order to ensure that it is legally binding and we can assist you in preparing the paperwork, explaining the procedure and obtaining a Consent Order from the Court.
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Frequently asked questions
The starting point for any financial settlement is what we call full disclosure which means not just information about the assets but also documents to support the existence and value of the assets. The idea is to try and get that dealt with voluntarily between the couple, and it includes 12 months’ worth of bank statements for all bank accounts, p60s payslips, business accounts, details about pensions. Once that information is available, you're perfectly entitled to ask questions on what's been disclosed and to ask for more information and more documents if you think that something's missing. If it's still not forthcoming then you need to make an application to court where it's an absolute requirement to provide the full disclosure and deadlines are set for it. You might have an idea from being married to your spouse for so long that there are things missing or sometimes just looking at the documents they've disclosed such as the bank statements might reveal other bank accounts that we can ask about. You can also make searches of outside agencies, such as the Land Registry, to find out about property ownership and Companies House, which will give details of any directorships that the spouse might have. Once the matters in court if your spouse is still not forthcoming with full disclosure there are various sanctions that the court can impose. Usually the first step is for them to make a court order for the disclosure of that information or documents and to attach something called a penal notice to the order. So the penal notice is really just a warning that if they don't comply with a court order the court can sanction them with a fine, removal of goods or a term of imprisonment. Usually, just the threat of that is enough to produce the information and documents. If the lack of disclosure has led to a waste of court time or a waste of your legal costs, you might also get an order from the court that they reimburse your costs. In more extreme cases a court can order a third party to provide disclosure of documents that your spouse hasn't disclosed. They're reluctant to do that, but if it's really necessary that might be something you can get a court to do. Even more extreme cases they can actually make what we call search and retrieve orders to actually go to a premises, search it and retrieve any relevant documents. Again, it's very much a last resort and it's very rarely an order that a court will make but it is their if it's really necessary. And one more thing a court could do when they're considering a settlement is to make what we call adverse inferences and to infer from the fact that your spouse hasn't disclosed everything, that they must be very wealthy and therefore they will make an order that is perhaps more favourable to you.
Well, the short answer is yes. There are two types of maintenance. There's child maintenance and that's payable to cover or go towards the costs of children. And then there's spousal maintenance which goes towards the costs of the husband or wife. Child maintenance is paid to the parent the child lives with or spends most time with. So if that happens to be the father, then the wife will pay the husband child maintenance. Spousal maintenance is payable if there's a divorce, and it can be paid by the highest earner to the lowest earner where there is a need to top up the lower earner’s income. So if the husband happens to be the lower earner the wife may well find that she has a maintenance claim against her or actually ends up paying him spousal maintenance. That maintenance can be paid where there are no children at all, and the husband or wife might need maintenance to top up their income or it can be paid where child maintenance is being paid just to top up the child maintenance.
The simple answer is yes. They must be disclosed along with all the other assets in the marriage, and the starting point is that your spouse must give evaluation for their business assets and disclose the last two years’ accounts to give an idea of what's there. Whether you actually have a claim on the business will depend on the value and the nature of the business itself. Some businesses are purely a means of generating income so you're unlikely to get any extra capital from the settlement for your spouse's business. An example of that is subcontractors who run their income through a limited company. Some businesses, however, do have capital assets in them. They can potentially be used towards reaching a settlement. Again, it depends on the nature and value of those assets. An example of that would be a business that perhaps owns a number of properties that they operated from you might be able to sell or mortgage properties to raise capital. Business isn't always going to be sold if it's going to be detrimental to the business itself because obviously that is your spouse’s living and if their livelihood's affected it will have a negative impact on the overall settlement. In most cases where there's a business you're going to need to get an accountant's advice on the value on how best to release capital or whether it can be released at all.
A financial order is a legally-binding document, and either the parties can agree it or the court may order it, but it sets out what is going to happen financially between the couple when they separate.
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Jessica is an Associate Solicitor and has specialised in family law throughout her career