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Financial Arrangements
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Finances and you
If you are separating or getting divorced then you are going to need advice on what will happen with your financial arrangements, whether you are just living together or are Man and wife.
You will need to consider the following.
What will happen to our house
Will I get or have to pay maintenance for my spouse
will I get or have to pay maintenance for my children
What happens to our savings and other assets what about our pension rights
what about if one of us should die
Help for your financial matters can come in various guises, from an Accountant, A financial adviser, a Mediator and of course from the lawyer.
You will need to make sure that you have to hand all the facts and figures in documentary form before you proceed to ask for advice.
You will need to contact your bank or building society to inform them about the separation as it is often the case that separate accounts will need to be set up and arrangements made to transfer any direct debits or other payments.
If you own your own home, the lender will have to be told and arrangements made as to who will pay the mortgage and associated outgoings.
If you rent, the landlord or their Agents will have to be told, and what the arrangements for paying the rent will be.
It is advisable that if possible you can make short term arrangements to ensure that the bills continue to be paid while the negotiations for a final outcome are ongoing.
If arrangements cannot be agreed while negotiations proceed, it is often the case that an application for interim maintenance will be made to ensure the household bills can be paid. This is especially important where there are children and a home needs to be secured.
Interim maintenance will not necessarily reflect any final outcome but is a holding position.
Berkeley Solicitors can assist with all these problems. We also have the assistance of a team of Independent Financial Advisors to assist when needed. Call Adrian, a member of the Law Society's Family Panel, on 07000 ANYCLAIM or 07000 269 252 for further assistance. |
Financial Arrangements on Divorce
Settling the financial arrangements can be a major 'flashpoint' during the divorce process - it is usually far more complex than the divorce itself. Berkeley Solicitors will ensure that issues relating to children are dealt with separately from financial matters to try to avoid any disagreements over money and property getting in the way of agreeing arrangements for children.
The settling of financial matters on divorce is called ancillary relief. The law in this area is very flexible to enable courts to achieve fairness depending on the individual circumstances of each case. The main piece of legislation in this area is the Matrimonial Causes Act 1973, which sets out the factors to be considered in deciding what is fair:
- the welfare of a child of the family;
- the income, earning capacity, property and resources of each person;
- the financial needs, obligations and responsibilities of each person;
- the standard of living enjoyed by the family before the breakdown of the marriage;
- the age of each person and the duration of the marriage;
- any physical or mental disability;
- the contribution made by each person to the welfare of the family, including looking after the home and bringing up children;
- the conduct of each person, but only if it is so bad it would be unfair to ignore it; and
- any serious disadvantage to either person which would be caused by ending the marriage.
Because the court has a wide discretion in applying the law, it is better to avoid the uncertainty of a court hearing. Most people are able to agree how their finances should be split with each having the help of a solicitor to advise on what might be a fair division, highlight the options for achieving this, and negotiate on their behalf.
Mediation services can also help couples reach agreement on key issues but a solicitor will be needed to advise on the implications of any agreement and convert it into an order recognised and enforceable by the courts.
The starting point must always be a full and honest disclosure of each person's personal assets, to ensure that everything is included in the 'pot' to be shared. Financial arrangements can be settled through a 'clean break', which ends the financial obligations between the couple if this is appropriate. Some form of maintenance payments may, however, be more suitable. These can be ongoing or for a fixed period. Even where there is a 'clean break' agreement maintenance will still be payable for any dependent children.
Often a family's main asset is the family home. Given that the needs of any children are the first consideration, it will be important to make sure that a suitable home is maintained for them. It may be that the family home can be sold with the proceeds divided between the couple (not necessarily in equal shares). The property could also be transferred to one spouse with the other receiving a greater share of other assets. A less common approach could allow one person to stay in the house with the other keeping an interest in the property, receiving their share when it is sold. This might be when the youngest child has finished full-time education.
The law has recently changed to allow a pension fund to be shared on divorce. Pension sharing will not be appropriate in all cases and, where it is an option, the fund will not always be divided equally. This is a complex area and it is highly likely that specialist financial advice will be needed on how sharing can be achieved in each individual set of circumstances. |
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