Financial matters on Divorce
Financial matters on Divorce can range from being straightforward to extremely complex. The more complicated a case is the longer it may take to finalise and the greater the costs which is why it is so important to obtain legal assistance.
Cases can include:
Division of property and savings
Pre-marital and inherited wealth
Value of the family or Business assets
Spousal maintenance Claims and variation
Emergency injunctions and protection orders
The factors are taken into account when deciding financial issues:
When considering financial settlement either by negotiation or through the court we take into account the factors in Section 25 of the Matrimonial Causes Act 1973 (as amended) which states:
S25(1) it shall be the duty of the court in deciding whether to exercise its powers…to have regard to all the circumstances of the case, first consideration being given to the welfare while a minor of any child of the family who has not attained the age of eighteen.
S25(2) As regards the exercise of the powers of the court… the court shall in particular have regard to the following matters:
(a) 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 including in the case of earning capacity any increase in that capacity which it would in the opinion of the court be reasonable to expect a party to the marriage to take steps to acquire;
(b) the financial needs, obligations and responsibilities which each of the parties to the marriage has or is likely to have in the foreseeable future;
(c) the standard of living enjoyed by the family before the breakdown of the marriage;
(d) the age of each party to the marriage and the duration of the marriage;
(e) any physical or mental disability of either of the parties to the marriage;
(f) the contributions which each of the parties has made or is likely in the foreseeable future to make to the welfare of the family, including any contribution made by looking after the home or caring for the family;
(g) 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;
(h) in the case of proceedings for divorce or nullity of marriage, the value to each of the parties to the marriage of any benefit… which, by reason of the dissolution or annulment of the marriage, that party will lose the chance of acquiring.
The court also has to consider if a clean break is achievable i.e. neither party can make a future claim against the other.
Settlement without court proceedings
To try to avoid protracted proceedings, court costs and animosity it is always sensible to try to reach a negotiated agreement. At the commencement of the case normally at the same time as issuing the Divorce proceeding we will consider the assets in the case with a view to giving initial advice on financial division and settlement.
It is usual to request voluntary disclosure of financial documents by way of the financial form E as there is under a duty to give full and frank reciprocal disclosure of your financial position and documents. Often after such disclosure a settlement can be agreed and a consent order setting out the financial document prepared together with supporting documents and sent to the court.
If no agreement is reached, we would recommend a referral to Mediation, which is mandatory prior to an application to the Court in any event. Mediation will incur fees which will be discussed with you at the time of referral. If agreement is reached in mediation the matter will be referred back to us to enable us to advise and prepare the Consent order for forwarding to the Court.
Settlement with Court proceedings
If a negotiated agreement cannot be reached, we will advise you to make an application to the court. Whilst a court application should be seen as a last resort if a matter cannot be agreed an application enables your case to be timetabled to avoid matters dragging and costs being incurred without any prospect of success and should in some cases therefore be seen as a positive step.
An application on Form A is made to the court with a court fee of currently £255. The court will issue the application and fix the first appointment 12-16 weeks after the application is made. The application is served on your Spouse and mortgage companies and pension providers.
5 weeks prior to the first appointment there will be exchange of financial documents on Form E.
2 weeks before the first appointment each party exchanges case chronology, questionnaires and statements of case, a cost estimate and notice to say if the matter is capable of settlement at the first hearing.
At the first appointment, the Judge will consider the case and what actions need to be undertaken such as response to questionnaires and valuations to enable the matter to be further considered.
The case will normally be listed for a Financial Dispute Resolution Appointment (FDR) unless the issues are so disputed or that a Final hearing should be listed. Prior to the FDR questionnaires should be answered and valuations if ordered obtained. Each party is required to put offers to settle prior to the hearing. At FDR if settlement is reached a consent order can be approved by a Judge if not the case will be listed for a final hearing.
Prior to the final hearing each party should put forward open offers to settle and an estimate of costs. If at court no agreement can be reached the matter will be considered by the judge who will hear evidence from both parties and consider all the factors in the case before making a Final order.
Financial matters are often complex and confusing, it is essential to obtain legal assistance.