DEALING WITH FINANCES ON DIVORCE

Unless both parties are fully agreed on a settlement we always strongly advise anybody contemplating a Divorce, where there are likely to be financial issues that need to be decided, to instruct a Solicitor. A Solicitor will be able to fully advise you on your rights and entitlements and you will feel secure in the knowledge that your interests are being protected.

The following is a brief summary of the way the Courts deal with financial issues.

A Court will only become involved in the financial aspects of Divorce unless it is approached to do so by way of an application

When an application dealing with finances and property is made to the Court in divorce or judicial separation proceedings, the Court has a very wide range of powers which it can exercise. This includes power to:-

(i) order one spouse to pay maintenance to the other

(ii) order one spouse to set aside a lump sum to secure regular maintenance payments to the other

(iii) order one spouse to pay a specified lump sum to the other

(iv) order one spouse to transfer all or part of the ownership of a specified property or assets to the other

(v) order earmarking or sharing of pension provision with the other spouse

What financial Order is a Court likely to take?

A Court when deciding on financial provision must according to the Law take certain factors into consideration.

The most important factor to be taken into consideration is the children and the Courts will always regard the interests of any children as being of paramount importance. .

Other points borne in mind are set out in the following list:-

(i) what income and resources are and will be available to the Husband and Wife?

(ii) what are their likely needs?

(iii) what standard of living did the family enjoy before the marriage broke down?

(iv) how old are the Husband and the Wife?

(v) how long was the marriage?

(vi) do either of the parties have any physical or mental disability?

(vii) what contributions have the Husband and Wife each made (or will they be likely to be making) to the welfare of the family, including any contribution such as looking after the home or caring for the family?

(viii) what has the conduct of the parties been?

(ix) what benefits will either lose specifically as a result of the marriage ending?

No single factor carries any greater legal weight than the others.

Courts are always prepared to consider a `clean beak` order in which all financial matters are sorted out and there is no need for ongoing payments for maintenance for either the wife or the children. Such a solution is obviously not a possibility if there is not enough capital available to enable both parties to carry on new lives.

There is no automatic presumption that the assets of both parties will be split equally though that is often the case particularly in the case of long marriages and both parties have made financial contributions or has contributed by looking after the home and children.

In cases where there is little capital and there are small children involved there is less likelihood of an equal split as if the children are staying with their mother her needs will be greater.

It is however necessary to have some idea of how the Courts will decide on a financial split. To make a start it is suggested that both parties prepare the following:-

(A) Make a list of all the assets of both parties:

(B) Calculate the equity in the house. This can be done by deducting the amount of any mortgage from the current value of the house,.

(C) If you have any endowment policies you should contact the Insurers to find out the "surrender values" of any endowment Policies.

(D) Calculate the value of any savings and property i.e. the car, furniture etc

(E) Calculate the value of any business either party may have.

(F) Calculate the value of any pensions either party may have. You need to find out `the cash equivalent value`

(G) Calculate the amount of all debts of both parties.

(H) Add up all the assets and deduct all the liabilities.

(I) As a start it is advisable to work on an equal split.

(J) Calculate how much one party would have to transfer to the other to achieve an equal split. (This is only a point of reference at this stage).

(K) Decide whether in all the circumstances this is a fair and reasonable split after considering the factors outlined above, that need to be taken into consideration.

If you both feel that an equal split is appropriate or you can both agree on a fair split then the Courts need not necessarily be involved and this will save a considerable amount of money in Costs and Fees.

It is only when it is not possible to reach an agreement that the Courts need be involved.

If you can both reach an agreement you can put that agreement into effect and go about your new lives without having to fight it out in Court. It must however in this situation be borne in mind that if things do not work out according to plan either party can go back to the Courts to make an order amending the agreement. It is therefore highly advisable to finalise matters by means of a `consent order`. This is an Order where the Court effectively `rubber Stamps` your agreement which will mean that the financial situation is made final and neither party can go back to the Court again.

Applications for Consent Orders must contain very detailed information about the Matrimonial finances and assets and liabilities of each party. The reason for this is that the judge must be aware of all the facts before making the Order and affidavits i.e. sworn statements must be provided by both parties. Judges also usually insist that the parties have received adequate legal advice before agreeing to the settlement.
Consent Orders can be prepared without a Solicitor but we strongly advise that you instruct a Solicitor to deal with what can be a very complex application to the Court.

As we have mentioned before we feel that instructing a Solicitor is the best course of action if financial issues are involved. It is possible, and quite easy to carry out the actual Divorce without a solicitor. In fact you can carry out your Divorce before financial issues are decided and then enlist professional help to sort out purely financial issues.

Our Directory of Specialist Divorce Lawyers will enable you to find a Solicitor to suit you. Profiles including photographs and Fees of experienced Divorce Solicitors in your area are available and you can email or telephone to arrange a free initial interview.

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