Divorce financial settlement solicitors

No matter how amicable your split, it’s vital to have a legally binding financial settlement when you’re separating from your partner.

In England and Wales, even after you’re divorced, you can still make financial claims against your ex (and vice versa) and there’s no time limit on this unless there’s an order stating that any settlement approved by the Court is ‘full and final’ or ‘a clean break’.

This is why it’s crucial to have a Consent Order with exact details of your financial arrangements with your ex-partner.

You can agree a financial settlement any time during the divorce proceedings – either before or after the divorce is finalised – however it’s usually best to reach an agreement on your finances before you finalise your divorce.

Your relationship, good or bad, with your ex-partner will affect how long it takes to reach a financial agreement, and it will also depend on how complex your financial affairs are. In most cases, you should be able to reach a financial settlement within the same timeframe as the divorce proceedings, but arguments can delay or extend the time it takes to divorce.

Rarely will the reason for your divorce affect your financial settlement. The guiding principle is that any settlement should be fair and give priority to the welfare and needs of any children.

However, if you’re divorcing because of extreme behaviour such as domestic violence, or if one of you has been trying to sabotage the financial settlement by reckless spending, or by hiding or destroying assets, the Court may take this into consideration. If you believe your partner’s behaviour meets any of these criteria, tell your solicitor at once.

The Court has ultimate discretion on the division of assets on divorce, guided by fundamental principles of sharing, needs and fairness. How your assets will be split depends on how long you’ve been married or in a civil partnership, as well as other factors, including:

• Your age and your partner’s
• Your ability to earn an income
• Your health
• Your property and money
• Your standard of living and living expenses
• Your role in the marriage (e.g. were you the primary breadwinner or the stay-at-home parent)

The Court will always strive to find the fairest solution, but arrangements for the children’s welfare (in terms of housing and child maintenance) always have the highest priority.

Assets are not automatically split equally in a divorce. The main consideration is the individual needs of everyone involved, particularly the children.

The Court may consider a 50/50 split of the matrimonial assets if that meets everyone’s needs – or an unequal split if they think one of you is in greater need than the other. For example, if one of you earns less than the other due to childcare arrangements.

It’s important to distinguish between your matrimonial assets and your non-matrimonial assets, as it could make a difference to your divorce financial settlement.

Matrimonial assets are the financial assets that you and your spouse built up (jointly or separately) during the time you were married, including your:

• Family home
• Other property or land
• Pensions
• Savings
• Cash in the bank
• Vehicles
• Furniture and appliances
• Investments
• Businesses

Non-matrimonial assets are financial assets which, for instance, were acquired before you were married or after your separation. Non-matrimonial assets typically include things like inheritances, family businesses and property. Depending on your circumstances, and each of your assessed needs, these non-matrimonial assets may or may not form part of the settlement.

Different judges may reach different solutions on identical facts, all of which would be within their judicial discretion. However, a line of cases has established a standard approach to the way the Courts consider matters.

The starting point is that assets accrued during a marriage are divided equally, and the guiding principles applied are “sharing” and “needs”. The matrimonial home, for instance, is normally considered a matrimonial asset, so may be divided equally between the parties even if it was owned by one of them before the marriage.

“Sharing” cases

An appropriate financial outcome to a sharing case is an equal division of all assets accrued during your marriage that adequately provides for the capital and income needs of each party and any children.

Where your resources exceed your needs, applying the sharing principle generally leads to an equal division of the assets that you accrued during the marriage.

The sharing principle does not apply to property that is inherited or introduced by one party during the marriage. The exception is where such property has become part of the matrimonial assets, for example, by being put into joint names or converted into a different type of asset enjoyed by the family.

In some cases, the sharing principle may be applied at a later date, with a reallocation of resources in the future. Typically, this may involve one of you having a deferred interest in the matrimonial home that will be realised once any children finish their education.

“Needs” cases

In these cases, where your needs and the needs of any children cannot be met by equal division of matrimonial assets, an unequal division of resources may be appropriate. Each of your needs are likely to dictate how capital and income are divided. Inherited assets, or assets introduced by one party during the marriage, may count for little.

Yes. If you and your spouse have accrued any debts during the term of your marriage, these could also be split as part of your divorce financial settlement. This includes your mortgage, credit cards, overdrafts, loans and any other commitments.

Business assets can be included in a divorce settlement. For example, a family business is likely to be seen as a source of income rather than an asset in the same way as a family home or savings pot. So even if one of the partners had no direct involvement in the business, or did not help to build it up, they may still be entitled to some of its value.

What happens to your business in a divorce could depend on careful, delicate negotiation between you, your partner and possibly other family members, so it’s vital your solicitor has the right expertise. At Clarke Willmott we have many years’ experience supporting family businesses and farming families – some over several generations.

Assets held overseas could be considered and included in the same way as any other assets.

If you or your partner is a non-UK national, lives abroad or has property, a business or other assets overseas, consult one of our international divorce solicitors. There may be multi-jurisdictional issues to consider as part of your financial settlement.

And if you suspect your spouse may be hiding overseas assets or moving assets offshore to make them more difficult to recover, tell your solicitor immediately.