There are many ways of reaching a divorce settlement agreement, and whichever method of negotiation you choose, we will work with you to ensure we have clarity of both yours and your partner’s financial positions, together with all the information we need to understand your ongoing commitments. We find that this transparency from the outset makes discussions quicker, and easier, to undertake.
Of course, issuing Court proceedings is sometimes unavoidable in order to reach a divorce financial settlement, and if this is the route that you need to take, we will guide you through it, explaining the process as we go along.
How are finances sorted in a divorce?
There is nothing to prevent couples reaching a financial agreement themselves. Ideally, this agreement should be incorporated into a Consent Order so that the Court can approve it and it will then become binding. Without the Court approval to any agreement reached, there is a risk that either party could change their mind without any repercussions. This can be devastating if one spouse is relying on an income or capital payment from the other. Additionally, without a Court order it is not possible for there to be a pension sharing order.
The Family Court – unlike many other Courts – have considerable discretion in determining whether a proposed agreement is fair or not. If there is insufficient evidence to support the agreement reached and the Court therefore deem it to be unfair to either one or both of the parties, then it can refuse to make the order. This can cause significant problems. Our advice would always be to seek legal advice on the content of any agreement, even if you have reached it amicably between you. This does not mean that you will instantly be forced into litigation. It does mean though that the lawyers will test any agreement (on paper) and look at the available assets and the needs of the family.
Divorce settlement process
There are several ways that a divorce financial settlement can be achieved, but primarily the main routes taken are discussions between the parties directly, negotiations through solicitors, some form of alternative dispute resolution or applying to the court for a Judge to decide the outcome. It is possible for a settlement to be reached using some or all of the above mentioned options. For example, discussions can take place in order to reach agreement on the division of the majority of the assets, thereby narrowing down the issues that a Judge needs to look at.
Whichever route is taken, both spouses will need to provide full and frank financial disclosure (usually in the form of a financial statement) so that both parties and their legal representatives have a complete picture of the matrimonial finances and informed decisions can be made.
How much does a divorce settlement cost?
There is no one size fits all. How much it will all cost very much depends on the complexity of the assets to be divided and how each party conducts themselves. It is important to note that the costs of sorting out finances are separate to the costs incurred in when dealing with the actual divorce.
How are things divided in a divorce?
The Court must apply the statutory criteria set out in Section 25 of the Matrimonial Causes Act 1973 in order to arrive at a fair outcome. In summary, these are:
- The ages of you and your partner / spouse;
- The earning capacity of each of you;
- What property there is;
- How much capital there is in bank accounts / savings / investments etc.;
- The standard of living you had during your marriage;
- Current and future living expenses;
- The role you played in the marriage – e.g. were you the primary wage earner, or did you stay at home to look after the children
When applying this criterion, the Court is looking at what the needs of the parties are in terms of housing income and pension and also the needs of any dependent children. A departure from equality can be ordered if the needs of one party dictate a different outcome, or if the Court accepts that certain assets should be treated as non-marital and the needs of the parties are met.
The Court’s first consideration is always given to the children of the family to ensure that they are adequately housed and there is enough income for both parents to meet their day to day needs.
Matrimonial assets refer to anything that has been accrued or obtained within the course of a marriage. The most common matrimonial asset is the family home. However, other assets can include (but are not limited to) additional properties, pension provision, vehicles, savings, investments, or interests in businesses.
Non-matrimonial assets refer to anything that was accrued or obtained outside of the marriage – i.e. the period prior to the marriage and/or the time that has passed since separation. Non-matrimonial assets can include (but are not limited to) pension provision, properties or investments and can also apply to inherited assets in some circumstances.
Whilst this may be a starting point for the party with the non-matrimonial assets, it is by no means a foregone conclusion. Just because an asset was obtained outside of the marriage, it is not necessarily exempt from being included in the overall settlement. All of the assets need to be looked at as a whole in order to determine what is fair and reasonable – and what meets the needs of the parties and any relevant children. That is not to say that non-matrimonial assets can’t be ring-fenced (i.e. excluded from any discussions), but this needs to be considered on a case by case basis. Ultimately if the parties are in agreement then they can agree what they like within reason and subject to the Court approving any agreement, but the criteria in s25 of the Matrimonial Causes Act 1973 do need to be taken into account. Within the context of agreement it can be agreed that one party will keep the majority of the matrimonial assets in order for the other party to keep any non-matrimonial assets that they have in their name.
Why Hawkins Family Law?
We are a specialist law firm, focusing solely on family law matters, such as divorce and separation, and everything that comes with these life-changing events. Established in 2001, the team at Hawkins Family Law are all ‘people’ people and we are committed to producing rounded outcomes for our clients, offering expertise in whatever forum works best for you, always aiming to bring matters to a swift conclusion with minimum pain.
We can provide family law advice and assistance relating to your financial settlement in divorce and can offer guidance as to the best way to solve your issues with your partner or ex-partner. We offer these services whether you are married or in a civil partnership.
The way in which you approach your divorce or separation is your choice, but with Hawkins Family Law you can be assured of our consistently high levels of support and guidance from our family law lawyers in Milton Keynes, Bicester & Watford.