Settling Finances on Divorce

Whilst for many clients the divorce process can be difficult and emotional, things can often become more challenging when agreeing the financial settlement.  So, how do we go about this?

Every case will turn on different facts but the principle of full disclosure of all financial assets remains the same.  Before we can advise a client on what settlement is in their best interests we need to know the value of all of all assets.  These include property, savings, income, pensions, trust and business assets. Some of the key factors which will influence the final agreement include the length of the marriage, the age of the parties, whether there are children involved and how old they are, the financial needs of each party, contributions made by each party and the family’s standard of living.

The most straightforward way to reach an agreement is via negotiation either directly with your former spouse or through Solicitors.  Provided each client is aware of their rights and options for settlement we would always  encourage direct communication where possible in an attempt to maintain an amicable relationship which is beneficial for the future, particularly if children are involved.  If an agreement is reached out of court then it is advisable to have this put into a Consent Order which will make the agreement legally binding.

If an Agreement cannot be reached out of court then one party will need to issue an Application to ask the Court to oversee the financial settlement.  The Court will then require the financial disclosure process to be completed in a particular format and there will be a First Directions Appointment listed.  Thereafter, once the Court is satisfied that all of the assets have been disclosed and they have been attributed values then the parties will have the opportunity to negotiate a settlement at the Financial Dispute Resolution Hearing.   If a settlement cannot be achieved at that Hearing with some direction from the Judge then a Final Hearing will be listed and the Judge will impose a final order on the parties having heard their evidence.  When dealing with a financial settlement the court will seek to ensure that the settlement is fair and meets the parties reasonable needs, particularly those of the children.  Where possible it is preferable to have clean break settlement which will give the parties financial independence from one another.  This prevents either party trying to revisit the settlement in future.  However, there are often cases where this is not possible to have a clean break because it would be unfair for one party not to receive some ongoing maintenance.

Prior to issuing court proceedings there is a requirement in most cases for the parties to attend mediation to try to resolve matters.  This involves the parties meeting a neutral third party mediator who will help guide them to a settlement which suits their family’s needs. Any agreement reached through mediation is not considered to be binding until it is drafted into a Consent Order.

It is imperative that before you embark upon agreeing a financial settlement you seek advice.  Sarah Crowther is a Partner at Chadwick Lawrence and oversees their team of 7 specialist family lawyers based at their offices across West Yorkshire.  The team offers flexible appointments and an initial free half hour appointment to find out where you stand.  For more information contact Sarah at our Horbury Office on 0800 015 0340.