Divorce and the break up of any relationship, family and home is traumatic and stressful. Concerns about finances can soon make the process adversarial and more complex. You should aim to negotiate a divorce settlement that provides for each party and any dependents, with any assets divided 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 bills even if you have left the marital home.
Reasonable payments should not affect the final agreement adversely, but failing to provide necessary support is likely to provoke hostility.
Conversely, if you are financially dependent on your spouse, ask for suitable arrangements to be made. If your spouse refuses, you can apply to the court for an interim financial order, requiring them 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, more specifically, children under 16 and older children who are in full-time education or have special needs.
Children's needs include having a home. In practice, this may mean they and one parent continue to live in the family home, but this is not automatically the case – particularly where limited total assets are available. To meet both parents’ financial needs and the children's, 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 involve the Child Maintenance Service.
Whether one party is responsible for a marriage's breakdown or ‘at fault’ (eg: has committed adultery) rarely impacts 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.
The process will be easier and less expensive if you and your spouse cooperate to negotiate a fair agreement.
Options include negotiating directly between yourselves, using a family mediation service or collaborative law, or involving your lawyers.
For example, you might use a lawyer’s advice on what to reasonably expect as a benchmark for your negotiations, before later involving them in the final details. Drawn-out legal arguments should be avoided because they are expensive and both spouses can end up worse off.
As a starting point, you should both fully disclose your financial positions. Failing to do so may mean that agreements are later overturned.
You will also each need to work out your key objectives. For example, one of you might be 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 and you can get divorced 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 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 circumstances and objectives. Any agreement must take into account all assets and sources of income, and balance the different interests of the parties involved. Issues to consider include:
If you expect to receive maintenance, you should understand the potential risks:
As part of the overall negotiation, you can protect yourself against such risks, for example, by requiring your former spouse to take out appropriate life insurance (for your benefit).
Before finalising any agreement, make sure you clearly understand its overall effect on your long-term financial position.