When contemplating divorce, working out the correct steps to take isn’t always straightforward. How can someone make fair financial decisions when separating from their partner?
“The decision to get a divorce is never an easy one, but once there is certainty that it’s the best thing for a family, there are important financial decisions to be considered before everyone can move forward with their lives,” says Helen Cort, partner at Hampshire law firm Dutton Gregory Solicitors.
“It’s vital to receive professional advice early on to avoid mistakes, ensure a fair settlement, and submit a Consent Order to make any agreements final and binding.”
In this article, Helen shares her experience in helping people through the process and saving families from stress and anxiety in the future.
Q: What are the most common financial issues for a couple seeking a divorce?
A: In my experience, there are usually three crucial financial questions to consider when a couple is looking to part ways.
1. What will happen to the family home?
Often, one person has moved out of the family home during divorce proceedings to ease tensions, especially when children are involved. However, it can be incredibly difficult to return, so before making any final decisions, it’s worth seeking professional advice and to understand the ramifications of any course of action.
The sale of a family home can be immediate or delayed until the children are older, but the capital should be divided fairly, with the main consideration being to ensure each party can meet their housing needs.
2. Is there a need for ongoing financial support?
Where the couple have children, consideration needs to be given to how much child maintenance should be paid, or where the children are being privately educated whether this is still affordable.
If for example, one party earns significantly more than the other, there needs to be a discussion about whether there should be spousal maintenance payments, and if so, how much and for how long?
3. How will any pensions be divided?
Pensions accrued during the marriage are matrimonial assets, so it’s important to understand what provision each party has and how they could be shared.
Q: What is a fair financial settlement in a divorce?
A: This varies from couple to couple and depends on their circumstances, which is why it’s best to seek legal advice to help recognise what is a just financial settlement.
After a thorough evaluation of all the couple’s financial resources and gathering relevant evidence to make a financial resolution as smooth as possible, guided negotiations can be effective in keeping relations amicable and minimising the disruption to a family.
When evaluating fairness, the three essential principles are needs, compensation and sharing.
Q: How are financial settlements reached when getting a divorce?
A: Wherever possible, couples are encouraged to seek settlement outside of the Court. Court proceedings can entail a higher level of risk, as the verdict is open to a judge’s discretion. They are also costly, time-consuming and can cause further distress.
Instead, couples can choose to act through their solicitors or try mediation. As a Collaborative Lawyer, I’m also able to hold open-table discussions, to help reach an agreement quickly.
No matter the resolution method chosen, it’s best to seek advice from a family law specialist as soon as possible to fully understand the implications of any decisions and avoid complications. Once an agreement has been made, it’s hard to change it, and could become a source of regret.
Consulting a solicitor does not mean immediate action. Frequently, I see clients that don’t separate or commence divorce proceedings until a year after our first meeting. It’s important to get early advice so that you can consider the potential implications of waiting.
Q: Do you need a solicitor for a "No Fault Divorce?"
A: While you can apply for No Fault Divorce without the help of a solicitor, there are still important decisions to make regarding arrangements for the children, the family home and your other assets.
Few people understand what financial decisions they need to make, and don’t realise that if a Consent Order is not prepared and approved by the Court, then financial claims can remain open even after the divorce is completed. In this situation, an individual could attempt to claim the financial gains of a former spouse in the future.
Once a Consent Order is made, there are only very limited circumstances where it can be changed. For this reason, and to ensure long-term financial security for your family, it’s best to seek legal advice even when applying for a No Fault Divorce.
The sooner you consult a solicitor, the better the chances are of settling your finances fairly and avoiding any complications, and it means that your family can focus on the future.
For more information about handling your finances during a divorce, visit duttongregory.co.uk or call 02380 221334.
