Family Lawyers Specialising in Financial and Children Arrangements for Divorcing Couples
If you are considering divorcing or dissolving your civil partnership, it is essential to deal with financial matters. Marriage is a financial commitment for life and only a court can order the end of this obligation. Our expert divorce settlement solicitors can work with you to secure the best possible financial outcome and ensure that the court seals it into a legally binding order.
If you don’t have a financial order in place, your ex could make a claim against you at any point in the future. This is particularly likely if your personal economic circumstances change and you become wealthier – you might have to pay them some of this money.
What is known as a clean break order finalises any financial claim and divides family financial assets – in effect it cuts all future financial legation between spouses after divorce. Once that order has been made by the court, in almost all cases no further financial claims can be made (see below for the very rare exceptions).
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Dividing family finances – how our divorce settlement solicitors can help
Dividing your assets and liabilities can sometimes prove surprisingly difficult. Even couples who are splitting amicably sometimes fall out about money – and children.
Our divorce settlement solicitors can advise you of your rights and discuss what you want to achieve. Everyone circumstance is different. For example, it might be important to you to keep your home or your pension.
We will represent you robustly in negotiations to try and secure the assets you want. We can support you through negotiation, family mediation and the collaborative law process if you prefer. And we will do whatever we can to avoid referring it to the court for the judge to settle your case. While sometimes that is the only way, it is surprisingly slow and can prove very expensive. It should also be seen as a last resort.
We deal with divorce financial settlements for clients in a wide range of circumstances, including in complex, high value and specialist cases, such as military and police divorces. And we also special in divorces for airline pilots – 1 of our family solicitors is married to an airline pilot.
Click here to read more about Divorcing a Pilot
Click here to read more about Police Divorce
And the head of our divorce team, Din Printer, is a sitting District Judge – so we have a unique insight into how the courts and judges treat these issues.
Click here to read some reviews of our family lawyers from satisfied clients
What am I entitled to receive in a divorce financial settlement?
Most cases are settled in negotiation between divorce solicitors, but in doing so they always bear in mind what a court would be likely to award. However there is no magic formula and very rarely any guarantee of the likely outcome should a case go before a court.
If you ask the court to decide matters, the judge will aim to divide assets fairly. The starting point is usually a 50:50 split, but the court can adjust this.
For example, if one party is in a weaker financial position because they gave up their career to raise children, the court will take this into account. The carer could receive a bigger share of the assets or maintenance.
The court will prioritise the needs of the family’s children, if there are any, when making its decision. It has the power to take into account all available assets and resources.
The court will look at various factors when making a financial order. These are set out in Section 25 of the Matrimonial Causes Act 1973 and are as follows:
· The welfare of any child of the family
· The income, earning capacity, property and other financial resources of the parties, including any increase in earnings that might be possible
· The parties’ financial needs, obligations and responsibilities, including in the foreseeable future
· The parties’ standard of living during the marriage
· The parties’ ages and the length of the marriage
· Any physical or mental disabilities
· The contributions made to the family, including looking after the home or caring for children
· The parties’ conduct during the marriage, where it would be unfair not to take this into account
When considering the above, after prioritising the needs of any children the court will try to ensure that both parties have their income and housing needs met. If there are surplus assets available, the court can look at the origin of these assets.
For example, if one party owned a property before they married or received an inheritance, they might receive a larger share of the assets.
If the marriage was only relatively short and there are no children, then someone who had more assets before the marriage might receive a larger share on divorce. In fact if it was a very short marriage without children, it’s not unusual for the outcome to be that both parties retain whatever assets they brought into the relationship.
The court must look at whether achieving a clean break is possible. This is when there is no maintenance and the financial order ends all responsibilities between the parties.
Do I need a financial order on divorce?
It’s not a legal requirement and if neither party has no assets, it is possible to do without one, but it is extremely important for almost everyone to ensure they have a clean break order if you divorce or dissolve a civil partnership. That’s simply because your financial obligations to your spouse will not end on divorce alone. Only a clean break does that. Without an order, your ex could make a financial claim against you many years later.
If you and your ex are on good terms and you have agreed amicably on how to split your assets, a divorce settlement solicitor can put your agreement into a draft order and ask the court to seal it. The order will then be binding and protect you, should you or your ex change their mind.
How does the court split assets on divorce?
The court will look at the available assets and the needs of everyone involved when deciding how to split different asset categories on divorce. And every financial asset is considered – including any individual pension for example.
Splitting property on divorce
Dealing with property on divorce is often one of the most difficult aspects. This is frequently a couple’s main asset, but the court must try to ensure that it meets both parties’ housing needs.
If no children are involved, the court can order the sale of a property, with the proceeds split between the parties if necessary. Alternatively, one party may be able to buy out the other’s interest by remortgaging.
But when it comes to remortgaging, if both parties took part in the mortgage, and depending on your personal circumstances, you may find the lender isn’t happy to let the party who is giving up their interest in the house, the mortgage. That’s something you’ll need to check carefully with a mortgage broker at an early-stage if you think it might apply to you. We can help you with that – with an introduction to mortgage broker if you need one.
If there are children of the marriage, the court will often give the carer the right to live in the family home. This can be dealt with in several ways, including:
· The party leaving the home receives other assets in compensation, such as savings, investments or pension
· The party remaining in the home obtains a mortgage to buy out the other party
· The property sale is deferred until the children reach 18, then sold and the sale proceeds shared. This is known as a Mesher order. Both parties remain on the title and the mortgage until the property sale, which could make it difficult for the person who has left to buy another home
· Transfer of the property into one person’s name, with an agreement that on the future sale, the other party will receive a set percentage of the sale proceeds. In effect, the person who has left has a charge over the property
Splitting savings and investments on divorce
These kind of assets are generally easier to divide. They will need to be valued to enable a fair split. If assets are sold or cashed in, you may need to pay Capital Gains Tax, so you should check with your solicitor to ensure the court considers this bill when making an order.
Where there are sufficient assets to provide for both parties, the court may allow one of the parties to keep assets they owned before the marriage.
How is an inheritance dealt with on divorce?
Money inherited during a marriage is usually considered part of the joint matrimonial assets and shared during divorce. The court may make an exception if the marriage was short or if there are enough funds to adequately provide for the other party without giving them a share of the inheritance.
Splitting pensions on divorce
Pensions are often a major asset in divorce, sometimes more valuable than the former matrimonial home.
It’s essential that any pension is carefully valued – to obtain what is known as a Cash Equivalent Transfer Value, the figure that’s considered to be the cash value of the pension at that particular stage.
Monks the option the court has, is what is known as pension sharing between the parties. This often happens if one person has given up their career to raise children and does not have a pension.
The court can make three different types of orders to deal with a pension on divorce:
· A pension sharing order where part of one person’s pension is separated and put into a new account for the other party. This becomes their personal pension and they can draw on it when they want once they reach retirement age
· Pension offsetting, where one party will receive a larger share of other assets. For example, if one party keeps their pension, this could be offset by the other party having the matrimonial home
· Pension earmarking where one person retains ownership of their pension but must pay a share of the income to the other party when the time comes. This is less common as it has drawbacks. The other party has no say over when the pension will start. If the pension holder dies, then the other party will not receive any income
Dealing with the pensions of those in certain professions, including the military, police and NHS, can be particularly complex and it is essential to use a divorce solicitor with expertise in pension sharing to ensure that the action taken does not inadvertently reduce the value of the pension. Our family lawyers regularly deal with divorces in these 3 sectors.
Click here to find out more about Armed Forces Pensions and Divorce
Dealing with trust income on divorce
The court may consider trust income and capital when making a financial order on divorce. If your spouse benefits from a trust, your solicitor will look at issues such as how the settlor set up the trust, what your spouse is entitled to, whether there are any other beneficiaries, what directions the trustees have and what payments or other benefits the trustees have paid out.
They will also look to see whether the trust is a sham set up purely to try and protect assets from division on divorce. The court has the authority to look behind a sham trust and divide assets fairly, considering those in the trust and potentially awarding a higher share of other assets to the innocent party.
Dealing with trusts on divorce can be complex and you should speak to a solicitor with expertise in both trusts law and family law. Fortunately here at Bonallack & Bishop, the extended team also has an exceptional Trusts specialist – she used to lecture solicitors nationwide on Trust law, so you can rely on her expertise.
Click here to read more about how our Trust Solicitors can help you
What happens to debts on divorce?
If there are debts, the court will take these into account when making an order. If the debt is in joint names, then the creditor can enforce payment against either of you.
The court will examine who incurred the debt and whether this was before or during the marriage. Debt incurred before the marriage may become the responsibility of the party who incurred the debt.
If either of you incurred the debt during the marriage, it will usually be considered a joint debt. The court may occasionally look at whether the debt is an individual debt and what was purchased. If one person incurred the debt due to frivolous spending on themselves, then the court can consider this.
If your ex continues to use a joint credit card, you should take steps to end this wherever possible.
Do I have to go to court for a divorce financial settlement?
Fortunately, relatively few divorce finance disputes actually make it all the way to a contested final hearing at court before a judge. In fact, recent studies suggest as few as 14% of divorces are dealt with this way. That’s a good thing – because a contested final hearing means more higher legal bills, less money available for distribution between the parties, much more stress and often a considerable wait. The courts are currently subject to considerable delays – and there’s no sign of any improvement in the position.
You do not necessarily have to ask the court to make the final decision on how to divide your finances on divorce. In fact, courts prefer that couples make arrangements between themselves wherever possible. and for many people, that’s where family mediation comes in. Although it doesn’t work for everyone, mediation is often a cheaper and more effective way of negotiating a divorce settlement – and is normally achieved with significantly less stressful round. It’s also process that works very well in trying to resolve children issues. Here at Bonallack and Bishop we are big fans of family mediation. We have our own jointly qualified family mediator/lawyer and are happy to conduct both face-to-face and online family mediation.
Our divorce settlement solicitors can often negotiate a strong settlement for clients without involving the court making a decision. We can work with you to identify exactly what you want to achieve and deal with your ex’s solicitor to try and secure this. and as part of the work
However, it is essential to have the agreement sealed by the court. This is a much quicker process than asking the court to deal with the division of assets. It simply involves asking the court to approve and seal the agreement you have reached.
You do not normally have to attend court for a consent order. The judge will examine the circumstances and decide whether the order is fair. If they believe it is, they will grant it. In exceptional circumstances a judge may be unhappy with the information they have received and require a brief expansion hearing – but that’s fortunately very rare.
Alternative dispute resolution for divorce financial settlements
If you cannot reach an agreement with your ex through negotiation, the next step is usually to consider a method of alternative dispute resolution. This is help to find a solution without going to court.
There can be several benefits to using alternative dispute resolution (sometimes known as ADR). Family courts are often very busy and it can take a long time to reach a final hearing. You also risk having a hearing postponed at the last minute, which can be inconvenient and expensive.
With some alternative dispute resolution methods, such as mediation, you can avoid the risk of an unwanted outcome as you must agree to the proposed solution.
It is also usually more cost-effective than litigation – often much more so, and certainly much, much quicker.
Options include:
· Family Mediation, where a neutral mediator will help you both explore the options for dividing your assets fairly. This is by far the best known and most often used form of ADR
· Arbitration, which is similar to court but privately arranged, meaning it is faster and you can have the hearings when and where you want.
· Collaborative law, which involves you and your ex and both of your solicitors having a series of round table meetings to try and find a solution
Here at Bonallack and Bishop our divorce settlement solicitors are big fans of family mediation. We regularly refer our clients to independent mediators in divorce settlement cases – and we have a jointly qualified lawyer – mediator of our own.
Click here to read about how family mediation works and how it could help you.
What is Form E?
In any form of divorce financial settlement, the first step is for you both to make full financial disclosure to each other. This is a legal requirement if you are looking at any form of court approved divorce financial settlement – whether it’s a consent order or an order following a contested hearing.
The usual way of doing this is by completing Form E. If you go to court, having completed a Form E well in advance is essential. It is a comprehensive form and is usually used for out-of-court divorce proceedings as well.
The principle is that each party boat has to provide what is known as full and frank disclosure. That means everything. Sometimes parties try to hide assets. That doesn’t usually end well. Courts take a very dim view of someone who is trying to hide assets from the other party. On occasions we find our clients suspect there is more money available that has been disclosed by the other party. In those situations our divorce settlement solicitors use a highly experienced forensic accountant as part of our extended team to clarify the real situation.
Form E needs to include details of all of your assets, income, outgoings and liabilities and you will also need to provide documentary evidence of them.
In addition, you need to include general information about yourself and your children, including where you live and your children’s health and educational needs.
Do I need a solicitor for a divorce financial settlement?
Speaking to a solicitor when dealing with your financial settlement is important. The right Court order is an essential part of your future security and you need to make sure you have the resources you and your family need.
An experienced divorce settlement solicitor will be able to safeguard your interests and suggest beneficial ways of splitting assets that you might not have considered.
Your solicitor will also ensure that the court seals your agreement into a binding financial order you can rely on in the future.
Will I get maintenance on divorce?
The courts like the parties in a divorce to be in a position to support themselves where possible. However, if one party is in a weaker financial position, for example, because they are raising children, it can order one party to pay spousal maintenance to the other.
This could be for a fixed period, allowing children to reach a certain age or for the recipient to find a job or retrain. Maintenance might be an ongoing requirement in some cases, but this is increasingly rare. The courts prefer that individuals work towards supporting themselves wherever possible.
Does a clean break order apply to child maintenance?
No, even as part of the final divorce settlement, it’s not possible to exclude ongoing financial provision for children. The principle is very simple. Both parents are responsible for the costs of raising their children, regardless of whether they live with them or even see them.
There are broadly 2 options for arranging child maintenance:
- privately between parents, if both parents can agree
- through the Child Maintenance Service
Can a financial order on divorce be changed?
A financial order on divorce can only rarely be varied or amended. There would need to be a change in circumstances that fundamentally undermines the basis of the order and that occurred shortly after the date of the final order, usually within a year.
It may also be possible to revisit an order if one party has hidden or failed to disclose assets so that the court did not consider them.
My ex is hiding assets on divorce, what can I do?
The courts will penalise anyone who hides assets, lies to the court or fails to disclose information when required.
An expert divorce financial lawyer will be able to ask the court to order disclosure of financial information.
The court has a range of powers, including:
· Ordering disclosure of assets
· Making a search order to look for hidden assets
· Making a freezing order to stop assets from being disposed of
· Making an order transferring assets that someone has tried to give away or sell
· Making an adverse order for costs against the offending party
Lying to or misleading the court is perjury, which is a criminal offence and the court can impose a range of penalties, including prison in the most serious cases.
If the court feels that someone has failed to disclose assets, it can make an order taking into account the assets it believes are hidden. It can also penalise the individual when deciding who will pay the legal costs.