Sorting your finances is often the most difficult aspect of a divorce or separation. Indeed, the work involved in obtaining a divorce is usually straightforward – with the majority of the work carried out by a family solicitor being in connection with the children's arrangements or sorting out the finances.
On the breakdown of a marriage or civil partnership you each have four basic financial claims against one another, as well as claims on behalf of any children of the family (this can include stepchildren too).
Your own claims are for maintenance (similar to housekeeping), a share of any savings, a share of property and a claim against pensions. On behalf of any children the most important claim is that of maintenance which, in the event of a dispute, is dealt with by the Child Maintenance Service (formerly the Child Support Agency).
While running parallel with the divorce court proceedings, financial matters can either be resolved before the divorce is completed, or can carry on after the divorce is obtained. Obviously if you are able to mutually agree your financial arrangements, you don't have to dispute it all through solicitors – and pay for the privilege. However, be careful; there is a danger that you may accept a very disadvantageous settlement simply to end the relationship quickly – and find yourself in a difficult financial situation for years to come.
Here at Cozens-Hardy we are best placed to advise you what is a fair settlement in your particular circumstances, and indeed what settlement the court will accept.
The court's overriding concern is always to ensure that any children are housed and raised securely. Other issues taken into account include:
- The couple's ages
- Age(s) of the children
- Length of the marriage
- Current income and property of each person - and what they are likely to have in the future
- Any disabilities of either person or child
- The family's current standard of living
In some cases a ‘clean break' is appropriate and achievable; this means there is no on-going financial responsibility between the couple.
More often, especially where children are involved, arrangements will include on-going payments, usually called ‘maintenance', but referred to in legal terminology as ‘periodical payments'. These may be varied over the years as circumstances change, and particularly as children grow up and become independent.
Other types of financial settlements used include ‘Lump Sum' orders where a capital sum is paid over and a ‘Property Adjustment Order', where property is transferred from one person to another - often used to provide a secure home for children. And an increasingly sensitive area is the ‘Pension Order’ that provides for a share of a former spouse's pension in the future.
And, talking about 'the future', it is essential that you review and make a new Will as part of your divorce proceedings to ensure that your assets are divided on your death in accordance with your wishes.
Finance arrangements are both complex and unique to your situation. Too often serious arguments break out over money, but our aim is always to achieve a reasonable settlement for you, with the minimum of dispute and cost, so that you are able to go forward on your own in reasonable comfort.