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The issue of money is extremely important during a divorce or civil partnership dissolution, and can bring a number of complications to any separation. If you are concerned about protecting your assets or just need some guidance about what to do next, talk to us.
Our specialist team of family law experts is dedicated to helping you deal with financial settlements on divorce or dissolution. We offer in-depth, upfront advice every step of the way and make sure your interests are protected at every turn.
When a couple makes the decision that their marriage or civil partnership has broken down, it is likely they will decide to commence divorce or dissolution proceedings. Under English family law, there are three main legal issues that will need to be addressed; one of these is determining a financial settlement.
Most financial settlements are determined by negotiation and agreement, either without the need for court proceedings or after court proceedings have begun but before they have reached a final hearing. Nevertheless, the principles applied by the court, which are set out in section 25 of the Matrimonial Causes Act 1973, are relevant to all those trying to reach a financial settlement. The legislation outlines the criteria that would be used to determine the financial settlement if an agreement could not be reached.
No court order regarding a financial settlement can be made before decree nisi (conditional order in civil partnership dissolution) and will not be final and binding until the divorce proceedings are completed by the making of a decree absolute (final order in civil partnership dissolution). To read about how to obtain a financial order, click here. If you want to know more about financial consent orders, click here. After the decree nisi (or conditional order) there is no time constraint within which to settle financial issues. It is common (but not a requirement) for the decree absolute to be delayed until after a financial settlement has been agreed and confirmed by the court. The timing will depend very much on individual circumstances.
When trying to determine a financial settlement, particularly if there are substantial assets involved, there may be several options for the division of possessions and property. It is almost always necessary to seek professional legal advice from a family law solicitor.
In some cases, where substantial assets are involved and one party is dissipating assets or attempting to remove wealth from the country, it may be necessary to obtain an injunction to halt such actions and safeguard assets until a financial settlement can be reached. Orders of this nature are not ordinarily or lightly made and the court will need to see very persuasive evidence that the order is needed to avoid prejudicing either party.
If you think that property relevant to a matrimonial or civil partnership dispute is at risk, you need to act quickly and take immediate legal advice as to your options.
There are no ‘rules’, only guidelines as to what the court should consider when determining a financial settlement. Overall, the settlement must be ‘fair’ to both parties. The court will look at a whole list of statutory factors, including:
- The welfare of any minor children
- The age of the parties involved
- The length of the marriage or civil partnership
- The financial needs of both parties and their respective abilities to generate income
For information on how age and length of marriage/civil partnership play a role in determining a financial settlement, click here. The court will carefully consider the financial positions of both parties involved in the divorce/dissolution with reference to their financial resources and obligations, their earning capabilities as well as whether there are any relevant illnesses and disabilities. In most cases, the most important factor is the parties’ respective needs.
Me and my partner bought a house together. What will happen with that after our divorce?
To find out how your home will be affected by a financial settlement, take a look at this article.
How long do financial settlements take?
There is usually no reason for divorce financial settlements to take years to resolve and if a settlement is taking more than a period of months to be agreed, then the parties involved may need to consider a new approach to the negotiations. If an application has to be made to the court then it generally takes around 12 months to get to a final hearing. However, there are many opportunities during that time for an agreement to be reached and the court process actively encourages this.
Do I need a consent order?
Yes. Anyone who gets divorced or has dissolved their civil partnership can potentially make a financial claim against their former spouse or civil partner for provision, such as a request for a lump sum, maintenance or a pension sharing order. The only way to bring these claims to an end is to obtain a financial order made by the court, which provides for all claims to be dismissed. If you and your ex have agreed what will happen to your financial affairs, it is a straightforward but extremely important process to get a consent order in place to provide you with certainty for the future.
In order to get a clean break settlement, do I have to tell my ex about my financial situation?
Yes. You will both need to complete a relatively short form called a ‘Statement of Information’, which provides a summary of assets, liabilities, net income, pension provision and some other basic details. You each need to sign a declaration to say that you have seen the other person’s information before the documentation can be sent to court.
How do we make a clean break legally binding?
You need to get a consent order drafted. After the decree nisi stage has been reached in the divorce, the consent order can be submitted to court, together with a short form of financial disclosure so that the court can check that the clean break is reasonably fair. The clean break will not be legally binding until:
- The consent order has been checked by a judge and stamped
- The decree absolute has been granted
To read more about financial clean break orders, click here.
If I remarry, will that have an effect on the financial settlement?
Rights to ask the court to make a financial settlement change on remarriage and if one of the ex-spouses remarries before having made an application to the court, their right to claim may be lost. It is therefore very important to take legal advice before remarrying or entering a new civil partnership if the financial aspects of a previous divorce or civil partnership dissolution have not been formalised in a financial court order approved and stamped by the court.
Our team of family law solicitors are all members of Resolution, which means we are dedicated to approaching your case on a conciliatory basis where possible. We have a great deal of experience in dealing with complex financial matters, including family businesses, trusts, pensions and offshore investments. We also have access to valuation, taxation and other financial experts, such as accountants or actuaries, to help achieve the best results for you.
We can explain details of your case to you in a simple and easily digestible manner, giving you the knowledge you need, when you need it. We understand that financial settlements can be a very complex, not to mention very difficult from an emotional perspective, which is why we are committed to helping our clients in a friendly, understanding yet professional and direct way.