Reaching a Financial Settlement
While Divorce and the distribution of matrimonial assets may be a stressful time in your life, there are ways of reaching an agreement without the need for confrontation and stress. An agreement can be reached through direct discussions with your partner, mediation, negotiations through solicitors or through the collaborative legal process. It is only once these options have failed that you may wish to consider Court proceedings.
When reaching a financial settlement there are many aspects that need to be taken into account, these include:
Properties, whether in joint or sole ownership.
Any savings/ shares, whether in joint or sole ownership.
Any debts, whether in joint or sole ownership.
Both parties’ pensions.
Childcare arrangements and child maintenance.
Spousal maintenance.
There are many factors that will be taken into account when negotiating a Financial Settlement:
Both parties’ income and earning capacity, both now and in the future.
Both parties’ financial needs and obligations, both now and in the future.
Whether there is any foreseeable change in your or your spouse’s health and how this may impact their ability to work.
The length of your marriage, including any cohabitation periods prior to the marriage.
Both parties’ ages.
Consent Order
If you can reach a financial agreement between yourself and your partner, this will need to be drafted into a legally binding document and sent to the Court for their approval, this is called a Consent Order. You will also be required to provide a ‘Statement of Information’ which includes a brief overview of your finances, this is so the Court has an idea on whether the agreement is fair and reasonable.
Once this agreement is submitted to the Court it will take approximately 6 weeks for it to be approved and returned and you may then apply for the “Final Order” which will dissolve your marriage. It is important to note that the only way to make your agreement legally binding and enforceable is by Court Order. If you do not follow this process and one party seeks to renege from the agreement, you will have to apply to the Court to request that your agreement is upheld. This can be extremely expensive and there is no guarantee that the proceedings will be successful.
Clean Break
A ‘Clean Break’ is a clause included in a Court or Consent Order that prevents either party for making a claim on the other party’s assets in the future. A Clean Break is not automatically granted when you get divorced and the only way to grant a clean break is through an order sealed by the Court. Depending on your finances you may not think it important to have a Clean Break in place, however, it is important to consider any future inheritance you may receive and any increase in pay or business profits you may have.
Even if there are no assets to be distributed it is still highly recommended that you get a Consent Order creating a Clean Break to prevent your ex-spouse attempting to make a financial claim against you in the future when you may have obtained more assets.
How MJP Law can help
Our Family Law experts are experienced in Financial Settlements and where necessary will negotiate with your partner or their solicitor on your behalf. There is no one-size-fits all when it comes to a financial settlement but we can offer expert advice on reaching a fair agreement.
We work with you to ensure that you are kept informed and up to date with your matter.
If you cannot reach an agreement by consent, then you may wish to issue Court Proceedings. For more information, please visit Money and property when you divorce or separate: Get the court to decide - GOV.UK (www.gov.uk)
