10 January 2019
Stage Four of the Divorce Process: Divorce and Finances
Each year in January our team sees a spike in divorce following the festive season. This year we’re taking you through the stages of divorce so you know what to expect if you find yourself in this situation. Stage five focuses on finances, with the following looking at what you need to consider at this point in the divorce process and what information you need to provide.
By now you may have come to the conclusion that your marriage is over, or you may have already separated. Often one of the most daunting subject matters for people to consider is the finances. Whether you have been in the marriage for decades or still within the early stages of the relationship, the basic steps people should take are simple and following our guidance can not only result in an improved prospect of maintaining an amicable relationship with your former partner, but also keep your legal costs down to a minimum.
There is a misconception in the public concerning divorce and the result of finalising your divorce. Whilst obtaining your decree absolute, the document you receive from court which legally ends your marriage, is the ultimate goal in a divorce, this does not deal with the matrimonial finances. There is an entirely separate process that must be followed to ensure no further claims may be made by your former spouse against your finances. The divorce process is instigated by the presentation of a petition to the court, however any application for a financial remedy will require a separate application.
Keep Open Communication
This sounds obvious, and in reality can be incredibly difficult. The biggest downfall is often discussing all issues at once, leading to confusion and frustration over what the purpose of the conversation is. There is a reason why every legal advisor recommends that you maintain open and amicable communications with your former partner. It can make the process less stressful and retains a foundation for a more cooperative relationship moving forward. If assistance is required to maintain that communication then support can be provided through Collaborative Law or Mediation.
In addition it is important that communications are focused upon what it is you are seeking to resolve. Often the family home is the biggest priority for individuals, particularly where children are involved. Do not go into any discussion prepared for battle, as you may set off on the wrong foot and end up in a falling out. You may be surprised to find that you are both on similar tracks and have the same goal in mind. A significant amount of time and resources can be saved if you narrow down the issues.
Gather Information Early
There may come a point where there will be a need for full and open disclosure of your respective finances. This would require the gathering of documents, such as bank statements and pension details, which can take time. Some pension providers can take months in providing a value of your pension, often a key factor for discussion. There is little merit in waiting until the last minute to gather the information as it can result in additional stress and uncertainty. Whilst gathering the financial information together you may come across transactions that you were previously unaware which you would want further clarification upon. It’s not worth leaving this in your locker until the last minute. Raising any potential issues of dispute at the outset is essential in reaching a resolution.
There may be historical contributions made towards the family or the finances that you consider to be important. For example, the payment of the deposit for the family home or the use of inheritance during the marriage. It’s easy to forget what has happened during the course of the relationship, especially one of 20+, years and you may come across an important reminder which can prove pivotal to the division of the matrimonial assets.
Every Case is Different
Who doesn’t take the opportunity to discuss their personal life with a friend, or know of someone else who has been in a similar situation? Quite often we hear comparisons being made to someone else’s relationship breakdown and this is used as a guide for what an individual believes should happen in their own case. This will not achieve anything. The legal principles for how the court will divide the matrimonial finances are contained within the Matrimonial Causes Act 1973. The court has a wide discretion when attempting to reach what ultimately is deemed to be a fair outcome, which is always the goal of the court. People have different viewpoints on what is fair, so comparing like for like will not provide you with the answer that you are looking for. Getting legal advice early and providing them with all the relevant information will arm you with the knowledge that you need to progress towards a successful resolution.
Remember not to dwell upon what steps to take. It’s easy to put off any difficult conversations and maintain the status quo for the sake of keeping the peace. However, you can inadvertently lead yourself down a path that can be difficult to turn back on. For example, whilst you may consider continuing to pay all the utilities on a property that you no longer occupy as being the right thing to do, this may be to your detriment.
Court is Not Compulsory
It is possible to go through the entire divorce process and resolve the matrimonial finances without once setting foot in a court building. If you reach an agreement on the finances a document referred as a consent order can be sent to the court setting out the terms of your agreement. The document will be considered by a Judge for approval. At the same time the court will need to consider a separate document known as a Statement of Information, which sets out the headline figures and the basis upon which an agreement was reached. Those who manage to reach an agreement by consent can save significant legal costs, even those that require a little more negotiation than others would save compared to having to attend court with legal representation. A pragmatic approach to reaching a resolution can be the difference between reaching an amicable agreement compared to contested and costly court proceedings.
Whether you are recently separation or divorced a number of years ago without a court order we can advise you in relation to any financial claim that may still be open. Contact us today online and we will be happy to assist.
Ben Evans is a Senior Associate and family law solicitor at Slater and Gordon Lawyers based in Cardiff.
If you’re going through a divorce, it’s important to understand each stage as you go through the process. You can find out more about each stage in the links below:
Related PostsRSS feed
Friday 11th January 2019
Wednesday 9th January 2019
Tuesday 8th January 2019