One of the biggest issues to be dealt with when you are divorcing is how to separate your finances and reach a financial settlement with your ex-spouse.
You do not have to go to court – you can reach an agreement with your spouse. However, that should be written up into a Consent Order and put before the court for approval. If you do not have a court order which ends you and your spouses claims against one another sealed by the court, then it would be open to either of you to make claims in the future (until you remarry, at which point you will be barred from making a claim). It is much better to have this issue tied off, so that you both know where you stand, and know that no financial claims can be made against you in the future.
Even if you do not instruct a solicitor to act for you, it may be helpful for you to seek the advice of a solicitor to understand what a court would be likely to order. This can give you a useful baseline for when you begin negotiations with your spouse. It may also be helpful for you to attend mediation.
Mediation is essentially a negotiation facilitated by a neutral third party. They will help you to reach an agreement. Both spouses have to be willing to negotiate for this to work – you cannot reach an agreement if one party will not compromise. Bear in mind that mediators are rarely legally qualified, and therefore they will not be able to advise you on the law or on whether the agreement you are reaching is fair. This is why it is helpful to have a lawyer assisting you in the background.
Whether you choose to mediate, to negotiate directly with your spouse, or you instruct a solicitor to negotiate on your behalf, it is likely (and helpful) to exchange financial disclosure with your spouse. This means that you both share the full details of their financial situation, including income, property, savings, other capital assets, pensions and liabilities. Spouses should exchange the same documents. It can be very helpful (and if you use a solicitor, they will often ask you) to both complete a Form E – this is a detailed form setting out your financial details, including the needs of yourself and the children. You can find a copy of the Form E here.
There is no easy formula you can use to make a decision about a financial settlement with your spouse, but it can be helpful to bear in mind the orders that the court would be empowered to make:
- spousal maintenance
- a lump sum payment
- pension sharing
- property adjustment
It may also be appropriate for child maintenance to be paid.
The objective of the family court is to reach an outcome which is ‘fair’ to both parties. In reaching this outcome, the court must have regard to “all the circumstances of the case”, as well as to a list of specifically identified matters.
The first consideration must be given to the welfare of any children who have not reached the age of 18, but thereafter (and in no specified order or hierarchy) to the factors set out in section 25(2)(a)-(h) of the Matrimonial Causes Act 1973.
These factors are generally referred to as the section 25 factors, and can be summarised as comprising:
- The resources available to the parties, both capital and income.
- The financial needs
of the parties, bearing in mind:
- their standard of living;
- their ages and the length of the marriage; and
- any disabilities.
In addition, the court must have regard to:
- The respective contributions of each party.
- The conduct of each party (although only in exceptional cases).
- Any benefit either party will lose as a result of the divorce.
Judges have a very wide band of discretion decide what ‘fair’ means in different circumstances. Therefore consideration of these factors could lead different judges to make a range of decisions when faced with identical facts. However, solicitors can look at the vast body of cases previously decided by the courts to advise clients as to the way the court is likely to approach a given set of facts.
D&G Family Law offers a 30-minute, no obligation meeting for £50 + VAT (£60). At this meeting, we can discuss your situation and in most cases provide some provisional advice on what your financial settlement might look like. Please call 0203 519 3919 to make an appointment to see us.