Whilst the divorce process itself is standard, agreeing your finances, the divorce settlement, can be the most challenging part of separation and divorce.
If your financial position is complicated, separating your finances and reaching an agreement is likely to need more professional input and support especially if:
There is no standard formula for calculating appropriate financial provision on divorce. Instead, the court has a duty to consider all the circumstances of the case and to take into account a range of specific statutory factors set out in section 25 of the Matrimonial Causes Act 1973 (section 25 factors).
Before considering the individual section 25 factors, the court first considers the welfare of any child(ren) of the family under the age of 18.
The court’s approach to the section 25 factors is to calculate and then distribute the parties’ available resources.
The section 25 factors can be summarised as follows:
Where an equal division of all assets accrued during the marriage adequately provides for the capital and income needs of each party and any children, then this is often the appropriate financial outcome but where the needs of the parties and any children cannot be met by an equal division, an unequal division of resources may be appropriate instead. In these cases, needs are likely to dictate how capital and income are divided.
Where possible, the court seeks to achieve a clean break between parties on divorce, so that they are no longer financially dependent on one another. However, achieving a clean break may include capitalising a party’s maintenance requirement. If there are insufficient assets to achieve a clean break, one party may have to pay maintenance to the other either for a fixed period of time or (quite unusually) indefinitely.
Child maintenance is a separate issue. The Child Maintenance Service (CMS) has primary jurisdiction for assessing and enforcing child maintenance, although most people agree child maintenance between themselves and do not need to involve the CMS.
The court has jurisdiction to make a pension sharing order. This is a very complicated area of law which we will guide you through if you instruct us.
Pension benefits are a hot topic these days especially with the introduction of workplace pensions.
The legal changes introduced in 2015 created new freedoms in relation to pension assets so it is really important to ensure that pension benefits are not overlooked.
Many people divorce without sorting out their family finances or they get an online “clean break” order without any proper consideration ignoring the fact that in many cases pensions are the single biggest asset.
The court has various powers to deal with pension.
The options are:
Most divorcing couples go for the pension sharing option not least because there is often not enough cash to make offsetting a viable alternative.
spouse will receive is called the pension credit.
The following types of pension can be shared:
Mediation is a good idea but you will need legal advice to steer you through the process. Otherwise, you could end up accepting less than you are entitled to.
You must attend a Mediation Information and Assessment Meeting (MIAM) before starting proceedings for financial orders to see if the issues can be resolved through mediation rather than through the court.
If all else fails, you will have to apply to court. You will be given further opportunities to agree a financial settlement during the proceedings but if there is still no agreement the court will make a decision.
Please contact us if you wish to discuss your options for achieving a divorce settlement.