Financial Settlement in a Divorce

If you are going through a divorce or separation you will need to come to an agreement about your finances. You can do this with, or without the help of a family law solicitor, although you may wish to take advice on your options and make sure any agreement you reach is confirmed in writing and, if advised, made into a court order

If you require advice about a financial settlement arising from a divorce, do not hesitate to get in touch with our specialist family law solicitors. Simply call us on 0113 244 6978 or use our online enquiry form to request a free consultation at a convenient time for you. 

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Do I need a Solicitor for a Divorce?

Whilst it is possible to represent yourself in a divorce, it can often lead to costly problems. It is one thing filling in court forms yourself, but quite another to understand the legal rules and law behind all the paperwork.

A family law solicitor can help in a number of ways.

  • advising on the approach to take and the relevant issues that the court take into account
  • by negotiating with your spouse
  • If necessary, by preparing your case and presenting it to the Courts for a Judge’s decision on what is a fair split of the matrimonial assets.
  • A solicitor is not blinded by emotion and you probably will be.

It is possible to reach an amicable agreement without a solicitor, but we would strongly advise parties to instruct a solicitor to prepare the necessary documentation to ensure that everything is as it should be to ensure that the documentation will be approved by a Judge.

Doing a divorce without any help from a solicitor is likely to be a recipe for disaster if you don’t know what you are doing. It can often lead to being ‘penny wise pound foolish’.

What Orders can the Court Make?

The most common orders that the Court makes are as follows: -

Periodical Payments (Maintenance)
This is a payment made out of income by one spouse to provide for the other and is commonly is called maintenance. Payments usually take place every month and the length of the payments can vary. The order can be varied (either as to the amount payable or the duration of it) in the future if the financial or other circumstances of one or both parties change significantly. Maintenance payments are common for an unemployed wife and a high earning husband.

If the party receiving the maintenance remarries (or enters into a registered civil partnership for a same sex couple) or dies, it automatically ceases.

Lump sum Order
This is an order that one party must pay the other a sum of money. It is usually a one-off payment, but the Court can order it to be paid by instalments. If there is default in payment then the Court can state that interest is payable.

Transfer of Property
This is an order dealing with property.  It usually deals with land and buildings (eg the former matrimonial home), but it also includes stocks, shares, bonds, policies and household contents, cars, boats and other possessions. The Court has the power to transfer such an asset from one person’s name to the other either now or in the future. There is a power to order a sale and divide up the proceeds if the Court thinks it is appropriate.

Sale of Property
This is an order selling property, e.g the former matrimonial home. The Court has the power to order that property is sold straight away or it is sold at some point in the future. For example, a common order is for a property to be sold once children have turned 18 years old. This is known as a Mesher Order.

Pension Sharing Order
A pension sharing order is one that shares or splits one spouse's pension fund so that the other spouse has a pension fund that is personal to him or her. For example, there may be 50% split of one spouses’ pension. Pension rights can be very valuable and both parties will need to get a cash equivalent transfer value of each pension (CETV).

How is the Division of Assets Worked Out?

The court considers all the circumstances of the case, giving first consideration to the welfare of any children of the family under the age of 18.  The court will consider the following matters:

(a) The income, earning capacity, property and other financial resources which each spouse 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 be, in the opinion of the court, reasonable to expect a person to take steps to acquire.
(b) The financial needs, obligations and responsibilities which each spouse 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 ages of each spouse and the duration of the marriage.
(e) Any physical or mental disability of each spouse.
(f) The contributions which each spouse has made or is likely to make in the foreseeable future to the welfare of the family, including any contribution by looking after the home or caring for the family.
(g) The conduct of each spouse, if that conduct is such that it would in the opinion of the Court be inequitable to disregard.
(h) The value to each spouse of any benefit which one spouse because of the divorce will lose the chance of acquiring (most usually pension provision).

The aim of the court is to achieve fairness. Following a Court decision in a case called White v White, the court will look at an equal division of assets built up during the marriage, unless the marriage was of short duration, or the assets are insufficient to satisfy needs of the parties, particular housing. However, often a decisive factor is the reasonable needs (especially housing needs) of yourself and your spouse, which can override an equal division of assets.

Practically, both parties will usually need to provide evidence of their financial position, e.g valuation of properties & pensions, wage slips and bank statements. Both parties will normally fill in a Form E which is a form that sets out all income, assets and liabilities. This will enable the Court to know what is in the matrimonial pot. Arguments can then be formed as to how those assets are divided.

It is possible to agree a financial settlement without having to ever to go to Court. If an agreement can be reached before Court, a consent order can be submitted to the Judge in the post.

Can a Financial Settlement be Reached Without Getting a Divorce?

Yes, a separation agreement can be drawn up, but we would normally advise against this as the Court doesn’t have to agree to the terms of a separation agreement in future divorce proceedings. However, they can be a useful agreement to have in certain circumstances. For further information about financial separation agreements, please click here.  

What Happens in an Emergency?

You may need to go to Court urgently if, for example, you believe your spouse is about to spend large sums of money. The Court has various powers to make orders that freeze assets or to try to recoup those monies.

In addition, the Court has the power to make interim orders for maintenance (maintenance pending suit) if a spouse is not reasonably financially supporting you during the separation.

How Much Does it all Cost?

This varies widely. The average for an application to the Court for ancillary relief costs in the region of £2,000 - £15,000 depending how far you go through the stages of the Court process to get an outcome. However, costs can be reduced if both parties come to an agreement quickly.

We are able to offer fixed fees in most circumstances and can sometimes offer payment plans to assist with cash flow.

It may also be appropriate for us to get your spouse to pay your fees.

We offer a FREE INITIAL CONSULTATION that many of our clients find useful to gather further information about their options, the particular issues of the case and an initial view on likely outcomes.

Talk to Us

The issue of money is important during a divorce or civil partnership dissolution, and can throw up a number of complications. If you are concerned about protecting your assets or just need some guidance about what to do next, get in touch with us. Contact our specialist divorce solicitors in Leeds today on 0113 244 6978 or click here to request a free consultation for free divorce advice.