Divorce and the subsequent break-up of any relationship and its associated family and home is a traumatic and stressful situation. Concerns about finances means it can become an adversarial and hostile process. Your aim should be to negotiate a divorce settlement that provides for each party and any dependents and which divides any assets fairly
If you are the main or only earner in a marriage, you may need to continue providing financial support to your spouse before reaching any final agreement: for example, paying the bills (even if you have left the marital home). Reasonable payments of this kind should not have any adverse effect on the final agreement, while failing to provide necessary support is likely to provoke hostility.
Conversely, if you are financially dependent on your spouse, you should ask for suitable arrangements to be made. If your spouse refuses to make adequate provision, you can apply to the court for an interim financial order, requiring your spouse to meet your financial needs until final agreement is reached.
At the same time, there are some immediate steps you can take to protect yourself financially.
The first priority is to look after the welfare and financial needs of any children: specifically, children under 16 and older children who are in full-time education or have special needs.
The needs of the children will include having a home to live in. In practice, this may mean that the children and one parent continue to live in the family home, but this is not automatically the case - particularly where limited total assets are available. In order to take into account both parents’ financial needs as well as the children, it might be necessary to sell the family home.
In addition, the parent who no longer lives with the children will normally provide financial support. You can negotiate an agreement on child maintenance between yourselves, or you may involve the Child Support Agency.
Whether one party is somehow responsible for the breakdown of the marriage or ‘at fault’ (eg has committed adultery) rarely has any impact on what is legally considered to be a reasonable financial settlement.
Instead, key factors to be taken into account (apart from the needs of any children) include:
Your lawyer can advise you what would be reasonable in your circumstances.
As with other parts of getting divorced, the process will be easier and less expensive if you and your spouse can co-operate in negotiating a fair agreement. Options include negotiating directly between yourselves, using a mediator or collaborative law, and involving your lawyers. For example, you might use your lawyer’s advice on what you can reasonably expect as a benchmark for your own negotiations, before again involving your lawyer in tying up the final details. Expensive and drawn out legal arguments should be avoided if at all possible, as both spouses can end up worse off.
As a starting point, you should each fully disclose your financial positions. Failing to do so may mean that any agreement you reach can later be overturned.
You will also each need to work out what your key objectives are. For example, one of you might be particularly keen to retain the family home or the family business, while a non-earner’s priority might be to secure a regular monthly income through maintenance payments. Negotiating agreement between yourselves is more likely to deliver a reasonably satisfactory outcome than if the court imposes a solution.
There is no set time limit on the financial negotiations – you can get divorced (ie end your marriage) without having reached a final agreement. However, if you remarry without having reached agreement, you may lose your right to make any financial claims.
Once you have reached agreement, you should apply to the court for a ‘consent order’. This allows the court to check that the agreement you have reached is fair. It also limits the ability of either spouse to later ask the court to change the financial arrangements, and makes it easier to take action if your former spouse fails to honour his or her commitments.
The right agreement for you will depend on your particular circumstances and objectives. Any agreement needs to take into account all the different assets and sources of income available, and balance the different interests of the parties involved. Issues to consider include:
If you expect to receive maintenance, it is important that you understand the potential risks:
As part of the overall negotiation, you can take steps to protect yourself against risks like these – for example, by requiring your former spouse to take out appropriate life insurance (for your benefit). Before finalising any agreement, you should ensure that you clearly understand its overall effect on your long-term financial position.
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