What am I entitled to as my divorce settlement?
When you are splitting up from your husband, wife or civil partner you need to know what you will be entitled to as your divorce settlement. Without that information, you can’t plan for your future or for the future of your children. You should feel reassured that you have an expert on your side who will help and guide you through the divorce and financial settlement process.
I understand that when you are taking the decision to separate it can feel as if you are going into freefall, without a parachute. A good divorce solicitor may not be able to immediately tell you, at your first meeting, exactly what you will get as your divorce settlement.
Who decides on the divorce settlement I get?
When you separate it can feel as if you are totally powerless and that your partner remains in complete control. If that’s how you feel it’s important to get expert legal advice on your financial settlement and to not agree anything without first speaking to a London divorce solicitor.
There are many ways to achieve a divorce settlement:
- Direct discussions – if you reach an agreement your divorce settlement solicitor will draw up a separation agreement or financial consent order for you. Without the right paperwork you may face future financial claims or may not be able to enforce your agreement.
- Mediation – with legal support before you commence mediation you may be able to reach a financial agreement that your divorce settlement solicitor can then convert into a financial consent order for you.
- Financial court proceedings – you may read about ‘ancillary relief’ but that is just another way to describe a financial court application to achieve a divorce settlement. In financial court proceedings a judge decides what you will get as your divorce settlement.
Finding the best way to achieve your divorce settlement is a divorce solicitor’s priority. If you can reach a fair financial settlement, either directly, through solicitor help or in family mediation, then this is likely to be the best outcome for you. However, there are some situations where you may need the family court to decide on the right divorce settlement. For example, if your husband or wife is:
- Refusing to give financial disclosure or
- Selling assets or transferring property to family members or
- Being unreasonable and won’t agree to any sort of sensible financial settlement that reflects your needs, the family wealth and other relevant factors.
Your divorce settlement solicitor will only recommend financial court proceedings (see link below), and take you through the steps or stages, advising what the best option is, after weighing up with you:
- The likely cost of divorce settlement proceedings.
- How long court proceedings will take.
- What you are likely to achieve as a divorce settlement and why that justifies the time and cost of a financial court application.
What am I entitled to in my divorce settlement?
Every married couples personal and financial circumstances are different so I can’t say what you will be entitled to receive in your divorce settlement without first speaking to you and gathering information. What I can say is what types of things you may get in your divorce settlement:
- The transfer of the family home from joint names to your sole name.
- The sale of the family home and a percentage of the equity in the family home.
- The transfer of the family home into your ex-partner’s sole name, subject to mortgage, with your receiving a lump sum if there is equity in the property.
- The continued occupation of the family home with the property remaining in joint names until a predetermined date for sale, such as re-marriage or the youngest child reaching 18. The family home is then sold and the net proceeds divided in accordance with the court order. This is known as a mesher order or a martin order.
- A share of any savings or investments.
- If there is a family business transfer of shares in the business or a lump sum payment to reflect the value of the business.
- Pension provision with the making of a pension sharing order so you get a share of your ex-spouse’s pension fund.
- Spousal maintenance – depending on income disparity you could be ordered to pay spousal maintenance or you could receive it from your ex-partner. Spousal maintenance can be time limited or payable for life.
Can you still get a divorce settlement if there is a prenup agreement?
You may be entitled to a divorce settlement even if you signed a prenup agreement or a postnuptial agreement (after marriage agreement). The best thing you can do is to get specialist early legal advice. To advise you I will need to see a copy of the agreement and talk to you about the circumstances in which the agreement was signed and your current personal and financial position and needs.
Will I get to stay in the family home?
The question ‘will I get to stay in the family home?’ is the most important question to most separating spouses. It is important to carefully assess your best options including:
- Whether you can afford to buy a new family home – this may depend on the value of the family home, the equity in the property and how much you will get of it, your mortgage capacity (if any) and if you will get spousal maintenance and child support (and, if so, for how long).
- Whether you can afford to stay in the family home – this may be your preferred option but we have to check if a transfer of the property into your sole name is achievable, especially if there is a mortgage, as the mortgage company might not agree to a transfer. Even if there isn’t a mortgage, we need to look at the affordability of the outgoings on the property. The affordability may depend on whether you are paying or receiving spousal maintenance or job opportunities.
- Continued joint ownership of the family home – if one of you can’t afford to buy the other out then continued joint ownership with one of you having permission to live at the family home until a specified event may be an option. On the predetermined event the family home is sold and the net sale proceeds are shared in accordance with the terms of the financial court order made at the time of the divorce settlement. This is known as a mesher order or martin order. It can appear attractive but it is best to look at the drawbacks of this type of arrangement and compare it to downsizing, if that is an alternative option for you.
Will my ex be able to sell the family home?
If the family home is owned by your estranged husband or wife, you may be concerned that you have no rights over it or that your ex will be able to sell or mortgage the property. As a spouse you have rights over a family home that can be protected by a matrimonial homes rights notice. This notice can protect the interests of a non-owning spouse until a financial court order is made.
Will all assets be shared in a divorce settlement?
You may want to try to ringfence some assets and stop them forming part of the divorce settlement. For example, you may want to ringfence:
- An inheritance.
- A gift from a family member or money received through a family trust.
- A family business that was built up prior to the marriage.
- A property that was transferred into your name by an elderly relative.
Whether your ex-spouse or the court will agree to assets being ringfenced will depend on:
- Whether you signed a prenuptial agreement or postnuptial agreement to ringfence the assets – even if you didn’t do so the assets could still be ringfenced. If you signed a prenuptial or postnuptial agreement the court will carefully consider the weight to be given to the agreement. The court should only depart from the settlement recorded in the prenuptial agreement if the agreement didn’t meet legal safeguards or the settlement doesn’t meet reasonable needs.
- Whether the assets are marital assets or non-matrimonial assets. If an asset is a non-matrimonial asset, it is only normally shared as part of the divorce settlement if your needs are such that a fair financial settlement can’t be reached without recourse to the non-marital asset.
How are needs assessed in a divorce settlement?
When I am advising on what is a reasonable divorce settlement, or the court is making a financial court order, reference is made to the statutory criteria contained in section 25 of The Matrimonial Causes Act 1973. This Act contains a list of what a family judge has to consider when deciding on the appropriate financial settlement.
Section 25 says that the court has to give first consideration to the welfare of any child of the family who is under the age of 18. In addition, the court considers matters such as:
- The personal circumstances of the husband and wife – such as the length of the marriage, ages, health and needs.
- The financial circumstances of the husband and wife – this includes assets owned as well as income.
- Contributions to the marriage – the contributions of a homemaker and the main income earner are equally valid.
Early assessment of the section 25 factors, and considering if assets should be classed as marital assets or non-matrimonial assets, is crucial to help you reach a divorce settlement through solicitor negotiations without having to start financial court proceedings.
Can my ex hide assets so I don’t get a fair divorce settlement?
You and your spouse are under a duty to give full and frank financial disclosure of all your assets. This includes assets that you own with a third party or assets that you owned before the marriage or assets that you think should be classed as non-marital assets.
If full financial disclosure isn’t given on a voluntary basis, then you or your spouse could start a financial court application. The court will require both of you to complete a lengthy Form E financial disclosure document and provide supporting paperwork . If necessary, additional questions can be asked and documents requested.This court process is designed to ensure assets aren’t hidden.
If an asset isn’t disclosed before a financial court order is made then an application can be made to set aside the financial court order and for a costs order. That is a powerful deterrent to hiding assets in a divorce settlement.
If I have a financial agreement, do I need a financial court order?
It is best that any agreement reached is made into a financial consent order to protect you. Without a financial consent order in place your ex-spouse might be able to argue that no agreement was reached and therefore bring a further claim.
Therefore, if you reach an agreement directly with your spouse, in mediation, or through my help as your divorce settlement solicitor, I recommend that we secure a financial consent order from the court. This simply means that I file an application , draft a consent order and supporting paperwork and send it to the court. The court will usually grant the order without the need for a court hearing.
If I have a financial court order will this stop any further financial claims?
A financial court order can be made by:
- Agreement – this is known as a financial consent order. The order is drawn up by a divorce solicitor and a judge is asked to approve it and make a financial consent order.
- After a contested court hearing – this is referred to as a financial court order. The judge decides how your assets are divided and what the financial court order should say.
Whether an order is made by agreement or after a contested court hearing, it will only stop all future financial claims if it is a ‘clean break order’ that stops a husband or wife applying back to the court for spousal maintenance at a later date or for capitalisation of spousal maintenance.
It is normally best to achieve a clean break to give you financial security and peace of mind , knowing that your ex-spouse can’t start further financial court proceedings.
You are likely to have lots of questions about your divorce settlement. I provide expert financial settlement advice at an affordable price and can help you secure your divorce settlement.