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Financial Concerns Following Divorce

Fantastic: enthusiastic and compassionate

Chambers & Partners, 2017

Fantastic: enthusiastic and compassionate

Chambers & Partners, 2017

We know that if you’re going through a divorce, you’ll have concerns about your finances – both in the short and long term. Our lawyers have helped thousands of people through the divorce process, so we’ve brought together the answers to some of the common questions we get asked.

If you can't find the answer you're looking for, or want clarification on any aspect of divorce, feel free to give us a call on 0345 604 4911 or contact us online and we’ll get back to you as soon as we can.

What Is Considered When Agreeing A Financial Settlement?

There are a number of factors that should be taken into account when agreeing a financial settlement following divorce, including:

  • Whether you have children (their interests come first)
  • How long you’ve been married for
  • Your age
  • Your financial needs
  • Your home, other property and income
  • Your pension position
  • Whether you own a business
  • The contribution each of you has made

All of the above needs to be considered in order to arrive at a settlement that is fair to you both. It’s important to be completely honest about your financial situation throughout the process. If at any point you doubt that your former partner is being truthful about their finances (even after the divorce), then please contact our specialist lawyers for advice on your options.

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How Is The Financial Settlement Agreed?

There are a few different ways that your financial separation can be decided – you don’t necessarily have to go to court.

It’s usually quicker and more cost effective if you can agree the details of your divorce between you. However, there are several ways you can agree your divorce settlement (although court should only be considered as a last resort):

  1. Directly between you and your former partner
  2. Solicitor negotiation on your behalf
  3. Through an out of court process such as mediation
  4. The family court decides for you

Once agreed, your financial agreement should be made into a court order. In cases where you have agreed things between you or out or court, the financial order can be submitted to the court for approval once you have your decree nisi.

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What Happens To Our Home Following Divorce?

Your marital home will be taken into consideration when agreeing your financial settlement, although what exactly happens to it will depend on your individual circumstances.

It may be the case that:

  • One of you buys the other out
  • Your home is sold so that you can both start again in a new property
  • Other property can be offset to allow one of you to remain in your home (by not making a claim on a pension for example)

If you have children together, their needs come first. However, this does not necessarily mean that the parent who the child lives with most of the time gets to remain in the home. Equally though, if that’s in the child’s best interests and it is a practical and financially workable option, then that may be what is decided.

If you’re worried about what will happen to your home following divorce, it’s important to get specialist legal advice on your options. Please call us on 0345 604 4911 or contact us online and we’ll get back to you as soon as we can.

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How Is Spousal Maintenance Decided?

Spousal maintenance is where one partner makes regular payments (usually monthly) to the other following divorce. This is agreed as part of the wider financial settlement, and can be for a set term or for life depending on your age, income and earning capacity. Wherever possible, spousal maintenance should be seen as a temporary arrangement, so that both partners can eventually become financially independent.

When seeking spousal maintenance, you must be able to demonstrate that you:

  1. Have a clear financial need for maintenance. This is often the case when you would not be able to pay your bills from your income (if you’re a full time parent for instance).
  2. Have maximised your income. For example by increasing your hours at work, seeking better employment or claiming any state benefits you’re entitled to.

Maintenance payments for children are considered separately – please read our child maintenance page for more information.

How And When Is Spousal Maintenance Agreed?

Spousal maintenance is usually decided as part of the divorce settlement. Please see our question on how the financial settlement is agreed to find out more.

If you need maintenance payments while your divorce is going through, and your former partner does not agree, we can apply to the court for a fixed amount to be paid to you while your divorce is ongoing. Once your divorce is complete, and the longer term maintenance payment is decided, you will then receive that amount.

Can Spousal Maintenance Be Changed?

If you or your former partner’s financial situation changes, then the maintenance agreement can be changed to reflect this. For example, the claiming partner might get a new job that means they can no longer demonstrate a financial need, or the paying partner might lose their job and no longer be able to pay.

If you have made the agreement between you then you can renegotiate what is paid, or if it was made as a court order, you can apply to the court for a variation to the order.

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How Is Child Maintenance Decided?

Child maintenance is paid by the parent who the child does not live with for the majority of the time. Please see our page on child maintenance for more information on how it’s decided and what to do if payments have been stopped or withheld.

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What Will Happen To Our Pensions?

Next to owning a home, your pension is often the largest financial asset you have. If your pension has been built up during your marriage, it has to be considered when your marriage comes to an end (together with the rest of your money and property).

It’s often the case that one partner will have built up a larger pension pot than the other – for instance if one of you gave up work, or works part time to raise your children. In these cases the other partner may be entitled to a share of the pension pot.

When deciding how much of a pension should be shared with a former partner, the calculation should take into account:

  • Your age, and the age of your former partner
  • The length of your marriage
  • The number of years the pension has been running
  • The potential value of future contributions

Sometimes it’s possible to offset a claim against a pension by considering other property instead. For example, you might agree to take a lower proportion of the value of your home, rather than share your pension.

Agreements over pensions following divorce can be a complicated area, so it’s best to seek the advice of a specialist family lawyer. Please call our experts on 0345 604 4911 or contact us online and we’ll get back to you as soon as we can.

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What Will Happen To Our Business Interests?

Protecting Your Business With A Pre Or Post Nuptial Agreement

Many business owners now try to protect their business interests by entering into a pre or post nuptial agreement, to ring fence those assets in the event of divorce. However, it’s important to get specialist advice about this, as the court will only uphold these types of agreement if certain conditions have been satisfied.

Business Interests & Divorce

If the business was built up during the marriage and the income from it has been used to support your family, then this will be taken into account – along with the rest of your money, property and pensions. It doesn’t matter whether the other partner was ever directly involved in the business.

Most of the time the court would try to find a settlement that allows the business to continue, but there are a number of potential options, depending on your situation. The court could order that:

  • Income from the business is paid to the other party as spousal maintenance
  • A lump sum is paid to the other party – either in a single payment or over instalments
  • The other party receives a share of the business (this is rare but can happen)
  • Business property or shares are sold to provide for the other party
  • The other party gets a share of the future growth of the business

Our specialist divorce lawyers have experience in high value, complex cases involving businesses – including cases which have an international element to them. We work with independent financial advisors and accountants to get an expert view on you and your former partner’s business interests.

Please call our team on 0345 604 4911 or contact us online to arrange an initial consultation about your case with one of our experts.

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Useful Links

  • Coping With Divorce
    Divorce is an emotional process; our guide provides useful information on the how to make it run as smoothly as possible.
  • Guide To The Divorce Process
    Answers to the common questions we get asked about the divorce process – from the grounds you can use to divorce your partner, to the likely cost.
  • Financial Settlements
    Find out how we can help you negotiate a fair settlement for your financial separation.
  • Out Of Court Divorce
    Divorcing out of court can be quicker, cheaper and less stressful. It also encourages a better working relationship with your former partner too.
  • Child Maintenance
    Our solicitors can help you agree child maintenance arrangements with your former partner.
  • Make A Will
    Once you’re divorced you should review your will. Visit our wills page for information on making a new will, or changing an existing one.

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