Financial Settlements in a Divorce
Our team of financial settlement solicitors can help you reach the financial settlement you deserve. We understand that this is of utmost importance for many.View Packages
Divorce Financial Settlements
Reaching a financial settlement is always a cause of considerable concern to anybody experiencing the breakdown of a relationship. At Beyond Legal our expert team of financial settlement solicitors specialise in negotiating highly successful financial settlements and obtaining lucrative Judgments for our clients.
We are accustomed to dealing with clients with complex financial affairs. Our main concern is to ensure that robust negotiations take place, but that the proceedings are not unduly drawn out. If you have children, their welfare will be a very important consideration in the financial settlement.
We can provide specialist advice on the following:
- Divorce settlements
- Spousal Maintenance and Child Maintenance
- Division of assets
- Family businesses
- Inheritance claims
- Freezing assets
- Farming divorces
- Military / Armed Forces divorces
- Divorces involving NHS pensions
Reaching a Financial Settlement
A financial settlement can be negotiated:
- Directly between the two of you;
- At mediation;
- By negotiation between solicitors;
- By court order as a last resort.
In all of the above cases, the agreement should be recorded in a legal document to ensure it is legally binding and enforceable. Just because the two of you have reached an agreement, regardless of whether you have recorded this in writing, this does not mean your financial settlement is legally binding. Indeed, only a final order approved by the court is legally binding.
Regardless of how a financial settlement is reached, the following course must be followed:
- Full and frank disclosure of financial documents on both sides.
- Determination of the value of matrimonial and other assets by agreement or as determined by joint valuation reports;
- Negotiations commence as to how to distribute income, assets, debts and pensions.
- If an agreement is reached it is incorporated into a formal document, e.g. a Consent Order (if you are going through a divorce) or a Separation Agreement (if you are unmarried or are not ready to issue divorce proceedings).
- If an agreement cannot be reached financial remedy proceedings may be issued by either party and the court process will be followed until an agreement is reached or the Judge makes a final decision, known as a Judgement.
How do I know what a fair settlement is?
The court takes into account various factors when deciding what financial orders it should make. Family law solicitors should take into account the same factors when advising clients and when negotiating a settlement on their behalf. At Beyond Legal we strongly recommend you speak to one of our financial settlement experts before entering into settlement negotiations with your ex-partner, regardless of how amicable the situation is, to ensure you do not settle for less than you are entitled to.
What factors will the court consider?
The law sets out the criteria which must be taken into account when formulating financial settlements or making a final order. There is no codified formula for the division of assets – it is a discretionary system. The primary consideration of the court is always the welfare of any dependent child or children.
The courts must also take various factors set out in s25 of the Matrimonial Causes Act 1973, including housing needs and resources, income and earning capacity, income needs, property and other resources, the standard of living enjoyed during the marriage, the duration of the marriage, overall contributions, health and any other circumstances of the case. The court is required to make an order that is fair to both parties, taking these factors into account.
What orders can the court make?
The divorce courts have the power to make maintenance orders, lump sum orders, property orders and pension orders.
What if we are not ready for a divorce?
The court cannot make a final order regarding finances unless divorce proceedings are underway. If you wish to separate your finances but are not ready for a divorce, you should consider entering into a Separation Agreement. Our team of divorce solicitors can advise you.
Aren’t the assets just divided equally?
As every marriage is different – and therefore every divorce is different – no rigid rules apply to the division of assets. The law is very flexible as it has to adapt for very different cases. It is not the case that in every divorce the assets should be divided 50:50. An equal division of assets may be appropriate in some cases, but not in others. If your ex-partner is putting pressure on you to agree to an equal division of the assets, we strongly suggest you seek legal advice before negotiating further.
The Court process
If you cannot agree to a financial settlement between you, at mediation or via financial settlement solicitors, it may become necessary for one of you to issue financial remedy proceedings. It is open to either party to issue financial remedy proceedings. The application is made to the court on a short form accompanied by a court fee in the region of £255.
The court process is the same in every case regardless of the value of your assets although additional steps, such as joint valuations of property, businesses and/or pensions may be necessary in some more complex cases if the value of those assets cannot be agreed.
Issuing court proceedings will inevitably increase legal costs on both sides. Every effort should therefore be made to agree a financial settlement, with the benefit of legal advice, beforehand.
The majority of cases settle without having to resort to the Court process. At Beyond Legal we specialise in financial settlements on divorce. We pride ourselves in dealing with financial matters at an early stage in the divorce process so that your divorce is not delayed as a result of a financial dispute.
How long does the financial remedy court process take?
There are 6 main steps in financial remedy proceedings:
- Exchange of Financial Statements (known as Form E);
- Exchange Questionnaires, Chronologies and Statement of Issues;
- First Directions Appointment (FDA) – a short hearing when the Judge orders the filing of further documents, e.g. joint valuation reports and/or pension reports if appropriate;
- Exchange of Replies to Questionnaires;
- Financial Dispute Resolution (FDR) – a without prejudice hearing when the parties and their legal representatives discuss settlements in the presence of a Judge.The FDR Judge will usually give an indication of the likely outcome, but cannot impose a Judgement on the parties at this stage.The FDR Judge cannot then be involved in the final hearing.Most cases settle at, or shortly after, the FDR hearing having heard the Judge’s indication.
- The Final Hearing – when both parties give evidence and a different Judge makes a final Financial Order.
It is not unusual for this process to take 12-18 months and attempts should be made at every stage in the proceedings to reach a settlement to avoid unnecessary costs and the Judge making a final decision.