Divorce & Finance Solicitors
Often one of the most complicated parts of getting divorced is sorting out the financial settlement. Reaching a fair settlement that allows both parties to divide their finances and move on can be challenging, even when the divorce is otherwise amicable.
At Lovell Chohan, our divorce lawyers are highly skilled at dealing with all of the issues surrounding financial settlements for divorce. Our team includes solicitors with Family Law Advanced accreditation from the Law Society as well as Resolution-trained experts in non-confrontational dispute resolution.
This expertise and training means that in most cases we can help divorcing couples reach a financial settlement that works for both parties quickly and cost-effectively without the need for court action.
For specialist legal advice on financial settlements when getting divorced, please contact our divorce and finance lawyers in Hounslow, Slough or Twickenham or use the contact form on the right to get in touch.
How do you divide assets in a divorce?
When getting divorced in England and Wales, all income and assets owned by both parties may be considered for the purposes of reaching a financial settlement.
Incomes and assets commonly considered in divorce settlements include:
- Income from shares and investments
- Pension income
- Pension pots
You and your spouse can either agree a settlement voluntarily or you can apply to a court to have a judge decide a settlement for you. Negotiating a settlement between you will normally be faster and less expensive, so is usually the preferred option.
Negotiating a divorce settlement voluntarily
In most cases now, divorce settlements are agreed by the two parties without the need for court action. This is mostly commonly achieved through mediation, where the separating spouses meet with a trained neutral mediator to discuss their finances and decide how to divide them.
Unless there are compelling reasons not to (such as domestic abuse) you will normally need to consider mediation before you will be allowed to take your case before a judge.
You will therefore need to attend a Mediation Information and Assessment Meeting (MIAM) to find out how mediation works and whether it is suitable for you. If you choose not to go ahead with mediation, you will need to have a signed form providing you attended a MIAM before taking your case to court.
There are also alternatives to mediation, such as collaborative law, that can also allow you to reach a voluntary agreement and may be more suitable depending on your personal circumstances.
Applying to a court for a financial divorce settlement
If you are unable to agree a settlement, it will normally become necessary for one party to issue an ancillary relief claim (Form A) with the court. The court will then assign you a date for a hearing where you will both be able to make your case and a judge will decide how to divide your finances.
A judge can make a range of orders under the Matrimonial Causes Act 1973 and for civil partners under the Civil Partnership Act 2004. These orders fall into two categories – capital orders (dividing assets such as property and savings) and income orders (requiring one spouse to make on going payments to the other).
The following are a list of potential income orders:
- Maintenance pending suit
- Periodical payments
- Secured periodical payments
The following are a list of capital orders:
- Lump sum orders
- Property adjustment orders (for property to be transferred or held on trust)
- Orders for sale
- Pension sharing orders
Using a consent order to make your divorce settlement legally binding
Where the parties have negotiated a financial settlement for their divorce, this can be embodied in an agreed order to make the agreement legally binding. This is usually referred to as a ‘consent order’. Providing the parties have agreed to such a consent order and the court approves this there is usually no need for the parties to attend court.
A financial consent order can be agreed any time after the Decree nisi has been pronounced. Once a consent order is agreed, signed and sealed by the court it cannot be varied except in very exceptional circumstances.
Common questions about financial settlements for divorce
How does a judge decide who gets what in a divorce?
When deciding issues on the division of capital and income, the court must try to achieve fairness between the parties. The court must take into account all the circumstances of the case including, but not limited to, the specific criteria set out in section 25(2) of the Matrimonial Causes Act.
The factors to be considered by the court are as follows:
- The income, earning capacity, property and other financial resources which each of the parties to the marriage has or is likely to have in the foreseeable future. The court should also take account of any increase in earning capacity that it would be, in the opinion of the court, reasonable to expect a party to the marriage to take steps to acquire.
- The financial needs, obligations and responsibilities which each of the parties to the marriage has or is likely to have in the foreseeable future.
- The standard of living enjoyed by the family before the marriage broke down.
- The age of each party to the marriage and the duration of the marriage.
- Any physical or mental disability of either of the parties to the marriage.
- The contributions that each of the parties has made or is likely in the foreseeable future to make to the welfare of the family. This should include any contribution made by looking after the home or caring for the family.
- The conduct of each of the parties, if that conduct is such that it would in the opinion of the court be inequitable to disregard it.
- In the case of proceedings for divorce for nullity of marriage, any benefit which, by reason of the dissolution or annulment of the marriage, the party will lose the chance of acquiring.
How do you apply to a court for a divorce settlement?
Applications for ancillary relief are commenced by the filing of Form A with the court. Following this the court fixes what is termed as the first ‘directions appointment’ with a date for this set that is usually within 16 weeks of the application.
The directions appointment specifies a list of directions, including the filing of a Form E together with relevant documents in support. This is usually filed 35 days before the first appointment directions hearing.
In addition to this, at least 14 days before the first directions appointment the parties are required to file and serve a concise statement of issues, the chronology and the questionnaire requesting any further documents or information that either party may require.
A form E is fairly complex and 25 pages long, so it is strongly recommended to have a solicitor experienced in financial settlements for divorce handle the paperwork for you.
How do court proceedings for a divorce settlement work?
The process beings with a first directions appointment, which is intended to give both parties and the court an opportunity to define the issues and attempt to save costs. Both parties are required to attend.
At such a hearing the district judge will decide which questions need to be answered by the parties, any issues on valuations and the judge may give further necessary directions in the conduct of the ancillary relief application.
Following a first directions appointment the matter will be listed for a financial dispute resolution appointment, although sometimes the court may treat the first directions appointment as a financial dispute resolution appointment.
A financial dispute resolution appointment is usually listed within eight weeks of the first directions appointment, and the purpose of this appointment is to reach agreement, if possible.
The matter will be heard by district judge, who will exclude themselves from any future hearings in the case if the matter is not settled. The judge will try to reach a settlement between the parties and give their views as to why they adopt that particular stance on the settlement.
If the matter is not settled at this point it will proceed to a final hearing. If a final hearing is required, the legal costs for both parties will typically be high, so it is usually in both parties’ best interest to resolve the matter at the earliest opportunity if at all possible.
In the event a settlement is reached, the parties will normally draw up an agreement that, once approved by the judge, will stand as the final ancillary relief consent order. This will make the agreement legally binding on both parties.
When does a divorce settlement take effect?
The various orders a court can make with respect to financial settlements for divorce are available to the parties on application for them at anytime after the filing of the divorce petition. However, with the exception of maintenance pending suit, the application cannot be heard until the decree nisi is issued and no order will take effect until the decree absolute is issued.
If you are agreeing a settlement voluntarily, it can take effect as soon as you and your former partner are able to agree the details, although you may want to wait until you have a consent order in place before making arrangements.
What happens if you need money to live off while waiting for your divorce settlement?
An order for periodical payments for a spouse cannot take effect until the decree absolute is issued. However, a spouse may be in urgent need of money before then. Such clients may wish to apply for maintenance pending suit.
A maintenance pending suit can make provision for regular payments to tide the receiving spouse over until the divorce is determined. A maintenance pending suit order ends on the pronouncement of the decree absolute.