Financial Settlements: Who Gets What?

When it comes to dealing with money and family property, your divorce solicitor will see that all assets are taken into account. They will explain what powers are available to ensure fair divorce financial settlement decisions are made.

 

Lawyers for Financial Settlements on Divorce

Divorce is inevitably an emotional and stressful process and not every couple will need to go to court to reach a financial settlement. However, by seeking reliable, experienced legal advice, you will give yourself the best possible chance of reaching a financial settlement in your best interests and of avoiding any unnecessary stress or contention.

At Wellers, we are committed to making the divorce process clearer, simpler and as amicable as possible. Talk to our divorce lawyers today about your situation, your aims, so we can discuss how we can help you through the process.

Contact our office in Bromley today to arrange an appointment with a family law solicitor on 020 8464 4242. For our Surrey team call on 01372 750100, for Sevenoaks the number is 01732 457575 and for central London please call 020 7481 2422.

 

Court approach to dividing Property and Assets Following Divorce

The Matrimonial Causes Act 1973 creates the framework for the court to adjudicate on finances and the division of assets and property accumulated during a marriage.

The starting point is always to give primary consideration to the welfare and needs of any dependent children involved. Section 25 of the act also lays out other matters to be taken into consideration by the courts.

These are the following:

  • 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;
  • The financial needs, obligations and responsibilities which each of the parties to the marriage has or is likely to have in the foreseeable future;
  • The standard of living enjoyed by the family before the breakdown of the marriage;
  • The age of each party to the marriage and the duration of the marriage;
  • Any physical or mental disability affecting either of the parties to the marriage;
  • The contributions made by each of the parties to the welfare of the family, including any contribution made by looking after the home or caring for the family;
  • In the case of proceedings for divorce or nullity of marriage, the value to either of the parties to the marriage of any benefit (for example, a pension) which, by reason of the dissolution or annulment of the marriage, that party will lose the chance of acquiring.

Possible outcomes in a financial settlement or court order

There is a lot of flexibility, whether finances are resolved by out of court settlement or at court. It is useful to note that the courts do not assume a 50/50 split of assets to be the starting point in a financial settlement and each case depends on the individual circumstances.

Additionally, the court can order the ownership of  property to be transferred from one divorcing party to the other to form part of the financial settlement.

Other than a clean break, it is not unusual for an outcome to include 1 or a combination of the following :-

  • Spousal Maintenance – regular payment made by one former spouse or civil partner to another who is otherwise unable to live a financially independent life. Spousal maintenance may not be paid at all if the marriage or civil partnership lasted less than five years. If it is paid in this situation it will only be paid for a specified period; this is known as a “term order”.
  • Clean Break – some divorcing parties may wish to obtain the finality of a “clean break” settlement on divorce, whereby all financial obligations are ended. A clean break settlement cannot take account of child maintenance payments – these are a separate matter.
  • Division of Property – courts have the power to order both the sale of property and to determine how the proceeds of a sale are to be divided. . In England and Wales, courts can apply a ‘Mesher’ order which allows deferral of the sale of the home until a trigger event, such as when the youngest child turns 18 – this then enables one party to stay in the family home to bring up the children in the knowledge that following the date of the trigger event, the house will then need to be sold. A court may also make a ‘Martin’ order, typically when there are no children involved, which will defer the sale of a property and entitle one party to remain living in the house for life or until they remarry.
  • Pension Sharing – because pension assets are split immediately this can help form part of a clean break settlement. Division of the pension pot can be sought from the court as part of a Pension Sharing Order. Pensions are divided as a percentage of a stated amount determined by the scheme managers, with the amount to be transferred calculated the day immediately prior to the date on which the pension sharing takes effect. In exceptional cases, courts may make a Pension Attachment Order instead of a Pension Sharing Order. However, in contrast to pension sharing, a Pension Attachment Order obliges a pension scheme to pay the non-member’s former-spouse or civil partner a stipulated percentage of monthly payments or cash lump sum upon the member’s retirement.

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