When married couples separate, there are usually financial matters that need to be resolved. This can include whether or not to sell the house, whether there should be a share of either party’s pension or whether one party should pay ongoing spousal maintenance to the other.
The first step is to obtain full and frank financial disclosure of both parties’ financial circumstances. The extent of the matrimonial pot to be divided is then known. The next step is then to negotiate how it may be divided.
Often a starting point is a 50/50 split of capital assets. It then has to be considered if there is a reason to deviate from such a split. One of the most common reasons for deviating from an equal split is that the person who will be caring for minor children may need more than 50% to house or rehouse themselves.
Many people try to resolve matters themselves but usually do require legal advice for assistance with this, particularly as it can involve some complex issues. Couples can negotiate and/or attend mediation through solicitors to reach an agreement which can then be embodied in a legal document.
If an agreement is reached and the parties are not divorcing then the financial agreement can be embodied in what is known as a Deed of Separation. Courts tend to uphold Deeds of Separation if they have been reached without duress, are reasonable in all the circumstances and if each party has received legal advice.
If the parties are divorced then they can embody any agreement they reach in a Consent Order. This is sent with accompanying documentation (including a summary of their current financial circumstances which both parties will have seen) for the court to consider. If the court approves the Order then that governs the arrangements for the financial settlement. It is very difficult to later challenge a Consent Order.
If the parties cannot reach an agreement then a financial application can be made to the court. Disclosure is then given within a court document called a Form E and the matter is listed for a Financial Dispute Appointment [“FDA”] whereby the court timetable the case through to the next stage e.g. ordering the valuation of the matrimonial home etc.
The next hearing is usually a Financial Dispute Resolution Hearing [“FDR”] where the Judge assists the parties in trying to reach an agreement, but cannot impose an order upon the parties at that stage. If that does not result in an agreement then the matter is listed for a Final Hearing, where a different Judge will hear evidence from both parties and decide what financial order should be made.
Often parties are seeking for there to be a clean break, whereby there are no ongoing financial claims against one another following the financial order being made. There are certain circumstances where there will not be a full clean break, for example when it is appropriate for there to be spousal maintenance. This is usually paid in circumstances where there is a large difference between the parties’ income and therefore one party makes a payment to the other (which is additional to any child maintenance). It can be paid for as long as both parties live or for a term which is specified. It will automatically come to an end should the receiving party remarry or die.
When the court considers a financial settlement, it takes into consideration the following factors:-
When considering these matters, first consideration will be given to the welfare of any child who is under the age of 18; in which case the court shall have particular regard to:-
When dealing with a case where one person is not the mother or father of the child, the court will take the following into consideration:
The court can make the following Orders:-
Sometimes claims for Spousal Maintenance can be capitalised which means that one person receives a capital lump sum in lieu of ongoing maintenance and likewise claims for pensions can be offset against other assets if appropriate.
If you would like some advice from a family law expert, call us for a free initial conversation over the phone and we will help as much as we can. If it is that you would like to come and see one of our family lawyers (or if we aren’t able to answer your questions because we need more time and detail) then we have a fixed fee price for a 1 hour meeting with any of our expert family lawyers.
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