Financial Settlements

Any separation is emotionally painful and there will be a lot on your mind if you are currently going through a break-up.  The “matrimonial pot” of assets you have built up between you, and the family’s income, which once met the needs of one family unit, now needs to service two households.  Deciding how to divide the finances is not always straightforward, and the uncertainty can be worrying, particularly if relations with your spouse are fraught and emotions are high. 

Even where you have discussed and agreed between yourselves how you believe the assets should be divided, you should take specialist legal advice, so that you can make an informed decision on whether the settlement is fair, meets your needs going forward and is legally binding.

There is a common belief that once divorce has been finalised, neither party can make financial claims on the other. This is untrue; without a Financial Order, approved by the courts, either partner can pursue claims or try to reopen the agreement reached, sometimes even years after the Final Order in the divorce. These are usually the most expensive cases, and therefore it is imperative to get it right the first time.

How are financial matters resolved?

No two marriages are the same and the financial make-up of each individual relationship will differ greatly. The ‘pot of assets’ may include property in the form of a family home, investment properties and holiday homes. It may also include savings, stocks and shares and/or a large pension. There may be a family business, either established by one party prior to the relationship or built up during the marriage. There may have been an inheritance from one side of the family or one of the partners may have brought other assets to the marriage.

Similarly, the couple may have very different income positions. One partner may have been the ‘main breadwinner’ and the other a homemaker. Perhaps one party has health reasons why they are unable to work. There may be minor children who need to be housed and provided for. 

There is not strict formula for working out how the assets are divided. All of the individual circumstances of each particular case is weighed up to consider what is a fair and balanced settlement. Advice should be sought from a solicitor with expert knowledge in this area, and who has experience of how the courts have decided similar cases.

Our Approach

Wherever possible, we try to resolve cases by negotiation to avoid a courtroom hearing. Our goal is a swift, tailormade and cost-effective solution for you and your family. To achieve this, we have a clear and consistent approach to financial settlements, which can be broken down into four distinct stages:

1. Stabilise & Safeguard – We discuss both the legal and practical considerations following your separation. This can include preventing disposal of assets, considering the interim arrangements for the payment of the outgoings on the family home and any debts, and advice on maintenance potentially payable to either spouse or the children whilst the longer term financial position is being resolved. 
2. Full and Frank disclosure – the next stage is exchange of full details of each parties’ assets and income. This is often the most complex area, particularly if one party is not being open about their financial position, has disposed of assets or, is valuing them incorrectly.  We will provide you a list of the required documents (by collating these yourself, you can help keep costs down) and prepare your Financial Statement ready for exchanging with the other side. We will consider, analyse and advise upon information in your spouse’s Financial Statement and query where information may be lacking. We also advise upon, and instruct, expert reports, where necessary to ascertain the value of assets.
3.  Negotiate an agreement – negotiating a financial settlement is a skilled and complex task. We will listen to what you want to achieve by way of settlement and discuss what proposals should be made to engage the other party in negotiations. As with any negotiating, there is often a degree of compromise required, particularly if court proceedings, are to be avoided. However, where the other party is being unreasonable in their position, we will take an assertive and robust approach to persuade them this is the case. We will advise you of the likely cost that will be incurred if matters are not agreed, so that you can consider this against the amount that is still in dispute.
4. Implementation – once an agreement is reached, we will prepare a Consent Order documents to formalise and finalise the agreement. Once the paperwork has signed by all parties, we will lodge the documents at Court, where a judge will consider whether to approve the order. The judge has to consider whether the agreement is fair, and occasionally may raise some queries. We will prepare the response to those queries. where this is necessary. The paperwork will usually be dealt without a Court Hearing which helps to keep costs down. Once the order is approved, we will assist you in ensuring the terms are implemented, 

Will I have to go to Court?

Whilst it is always preferable to try and agree a financial settlement without resorting to litigation, where this is not possible you can apply to the Court for financial orders.

The court process involves between one and three hearings, and more often than not, an agreement can be reached during the court process, often after a judge has given an indication as to how he/she thinks the case could be resolved. If an agreement is still not possible, the matter will be listed for a Final Hearing for a judge to decide the outcome. The final court order will cover pensions, maintenance and ongoing payments, investments, property, and any other shared financial assets. 

What is the Starting Point?

The judge will take into consideration all the facts and evidence of the case. The Court’s first consideration will be the needs of any children, particularly where will they live. The court will then consider the following:

• financial needs of each party, in terms of their respective housing and outgoings ;
• The standard of living the parties enjoyed during the marriage;
• The length of the marriage and  ages of the parties;
• The relative income and future earning capacity of each party;
• Any disabilities or health problems;
• The parties’ contributions (both financial and other types of contributions such as being the home maker or primary carer of the children);
• Behaviour , only where it is very exceptional;
• All other circumstances of the case.

The court can distinguish between assets which have accrued during the marriage and those that were pre-owned, inherited or built up after separation. However, the court can have resource to the non-matrimonial assets, if required to meet the parties’ needs. 

Staffordshire Family Law Solicitors will support you through the complex process of resolving financial matters, providing you with pragmatic advice throughout to ensure that you secure the best outcome for you and your family. Whether you and your partner are amicable, or things are more contentious, and whether you have high value and complex finances or more modest assets, we have an expert ready to help you.

If you need assistance, contact one of our solicitors at family@sflsolicitors.co.uk or call 01785 336617 for expert legal advice.