When couples divorce or partners dissolve their partnership it is not only the ending of the marriage or partnership that needs to be resolved. The future financial arrangements of both parties need to be considered and a decision made in relation to all of the assets of the relationship including in particular where each party and any children of the marriage or civil partnership will live and what income they will have to live on. Financial affairs can often be complex and consideration may have to be given to a variety of assets including those of a capital nature (the marital home, other property, savings, investments, shares and vehicles) as well as pensions.
It is the area that many couples find most difficult to reach agreement on. Often you will have different views as to what is a fair split, what should be included in any division and whether money brought into the marriage or civil partnership either at the outset or during the course of being together (for example inheritances received) should be ring fenced or taken into consideration. There may be discrepancies between you in your income positions perhaps because one of you has not worked but looked after the children or one of you has a disability; one of you has been able to build up a pension and the other hasn’t or not to such a great extent or one party has dealt with all the financial affairs of you both during the relationship and there is suspicion as to whether everything has been disclosed.
The first step is always seeking full financial information from both parties supported by documentary evidence, a process referred to as full and frank disclosure.
Within divorce proceedings any financial agreement reached should be contained in a court order (a Financial Remedy Order). Only a court order will ensure that there is a final settlement and will dismissal of all future claims in relation to capital and pensions. The order can also finalise income claims if no spousal maintenance (for your wife/husband/partner) is to be paid or if the claim is paid as capital instead. This would be called a Clean Break Order. If spousal maintenance is payable for any length of time (maintenance for children is separate and not relevant for this purpose) then a clean break is not possible until the maintenance ceases. The aim is to obtain a Financial Remedy Order by agreement (a Consent Order). If an agreement is not possible then financial remedy proceedings can be issued and the court asked to make an order. It is recommended that even where you are fully agreed as to how the financial aspects of your situation are dealt with, you obtain an order to protect you against claims in the future. Without such an order, a financial claim can be made against you at any time in the future including upon death even after you are divorced. Of course, the same applies to you making a claim but most people wish for certainty when dealing with their financial affairs without the risk of possible future claims.
Guidance on seeking financial disclosure, making representations on your behalf to reach an agreement or making an application to court and support throughout the process is provided in accordance with your particular circumstances.
If you would like more information and/or a written guide in relation to this please contact us.