Financial Matters

When couples split up, invariably there will be financial aspects that still bind them together and which require unravelling. Understandably couples are likely to be anxious as to what their financial future will be. The main difficulty tends to be the home and where parties are going to live. However there may also be other assets such as savings & investments, pensions and debts that need to be dealt with.

If you cannot agree a financial settlement, whether through solicitors or mediation, then it is likely that the court will get involved through an application made by one of the parties. The court has to take various matters into account when considering what order should be made. The court considers all the circumstances of the case, gives first consideration to the welfare of any children of the family under the age of 18 and, in particular, the court has regard to the following matters:

(a) The income, earning capacity, property and other financial resources which each spouse has or is likely to have in the foreseeable future including, in the case of earning capacity, any increase in that capacity which it would be, in the opinion of the court, reasonable to expect a person to take steps to acquire.

(b) The financial needs, obligations and responsibilities which each spouse has or is likely to have in the foreseeable future.

(d) The ages of each spouse and the duration of the marriage.

(e) Any physical or mental disability of each spouse.

(f) The contributions which each spouse has made or is likely to make in the foreseeable future to the welfare of the family, including any contribution by looking after the home or caring for the family.

(g) The conduct of each spouse, if that conduct is such that it would in the opinion of the Court be inequitable to disregard.

(h) The value to each spouse of any benefit which one spouse because of the divorce will lose the chance of acquiring (most usually pension provision).

In order for the Court to consider these matters, the Court needs to know the current financial situation and background. Both parties therefore have a duty to make full and frank financial disclosure to each other and to the Court. This is an absolute and ongoing duty which continues until an order is approved or made by the court.

The aim of the court is to achieve fairness. Following a landmark decision called White v White in 2000, the court has to consider an equal division of assets built up during the marriage, unless the marriage was of short duration, or the assets are insufficient to satisfy capital needs in particular rehousing. However, often a key and decisive factor is the reasonable needs (especially housing needs) of yourself and your spouse, which often overrides any possibility of an equal division of assets.

In most cases, the courts no longer have power to make orders for child maintenance except by agreement. Instead an application to the Child Support Agency has to be made for child maintenance to be assessed.

Once a financial agreement has been reached, then it is drafted in the form of a Consent Order and submitted to the Court for its approval. The earliest this can be done is at the Decree Nisi stage of the divorce proceedings. It is likely that the financial negotiations and preparation of consent order will be dealt with in parallel to the divorce proceedings.

Link to Divorce Page