Financial Issues & Divorce
The Need for Financial Order
A divorce brings an end your marriage and it does not bring an end to the financial claims between you and your spouse. Only a separate Court Order can do this, by expressly recording what is to happen to the assets of the marriage and dismissing all future claims. These financial arrangements are usually dealt with alongside the divorce proceedings.
Even if there are no assets of the marriage, or if you do not wish to claim any of your spouse’s assets, we would normally advise you to still obtain an Order to dismiss any possible future claims. If not, then there is the possibility that your spouse could make a claim in the future and against any assets you may then have, for example, an inheritance or other windfall.
How do you obtain a financial Order?
You can do so by either reaching an agreement between you, which if approved by the Court is binding on both of you and is enforceable by the court if necessary (known as a Consent Order), or by asking the Court to decide what is to happen. There are advantages in reaching agreement between you, as you could incur substantial legal costs if you go to Court and you may be unhappy with the decision reached by the Court.
In either eventuality both of you will need to provide full financial disclosure. This requires each to disclose to the other details of their assets, liabilities, income and pension information and to provide a full picture of the matrimonial finances. The Court will need this if is to decide what is to happen and, if it is your intention to reach an agreement between you, then this enables both of you to do so in the knowledge that the agreement reached is based upon all the relevant facts. Failure to provide full financial disclosure may result in any Order being set aside (overturned) at a later date.
How do we go about reaching agreement between us?
There are different ways that you can seek to do so. In all cases it is strongly recommended that you seek legal advice from an experienced family law solicitor. By doing so you have the advantage of knowing that what you may be agreeing to is reasonable and fully protects your position. The solicitors (assuming your spouse has one as well) can then draw up the agreement reached in a way that reflects what has been agreed and which is more likely to be acceptable to the Court. Whilst we would always advise if you are able to do so that you should agree as much as you can between you, we do strongly advise that you seek legal advice before reaching a binding agreement and to help draw up that agreement in a way that is binding and does not leave any unresolved issues for a later date.
So what are the different ways of reaching an agreement?
The following is a summary of what is available and if you follow the links on this page you will find more detailed guides should you wish to learn more.
This involves both you and your spouse agreeing to meet with a qualified, impartial Mediator who will guide you through financial disclosure and facilitate your negotiations to reach an agreed financial settlement. Mediation is a voluntary process and any agreement you reach is not legally binding until you both choose to make it binding with the help of your solicitor.
The head of our matrimonial department, Gill Wright, is a member of the Law Society Family Mediation Panel.
This process involves both of you represented by your own independent solicitors, meeting together in a four way meeting to negotiate a settlement. The process requires that both solicitors are trained in Collaborative Law. If the Collaborative process fails to resolve matters and it is necessary to apply to the court, then both solicitors will withdraw from acting and you will need to appoint new legal representatives. The head of our family law department, Gill Wright, is a trained collaborative lawyer.
Negotiation can take place directly between your solicitors if you do not wish to use one of the above alternatives. Each will seek to protect your best interests and it is important that you instruct an experienced family law solicitor that specialises in these matters. Not all solicitors do.
What if we are unable to reach agreement and have to go to Court?
It is not always possible to reach an agreed financial settlement and sometimes, particularly if your spouse is uncooperative, then you may need to issue Court proceedings, known as an application for financial relief. Just because you have done so does not mean that it is inevitable that the matter will have to be decided by the Court, as the process of doing so may make your spouse more cooperative and both of you will be encouraged by the Court to try and reach an agreement.
The Court sets out a timetable and will give directions for resolving the issues between you. In the absence of agreement there will be a hearing and we would usually advise you to be represented at that hearing by a specialist barrister that we will recommend and instruct on your behalf.