Financial Settlements

How to deal with the future ownership of property and other assets on divorce, including pensions and business assets can be a difficult, overwhelming and sometimes complex matter. Consideration also has to be given to income needs and how each party will support themselves and their children in the future. Obtaining effective legal advice at this time is essential.

Many couples are able to resolve such matters between themselves to a large extent and require legal advice at the beginning and to prepare the documents necessary to make their decisions binding; others may want the help of a neutral mediator; others will require detailed legal advice and assistance throughout the process.

There are several ways in which couples can resolve the financial aspects of their divorce:

  1. Face to face, round their own table
  2. Through mediation – where an impartial mediator helps couples explore the issues and find solutions – for more information please see the mediation services page.
  3. Through the collaborative law process – the entire case is dealt with by the couples and their collaborative solicitors sitting round the table – for more information please see the collaborative law services page.
  4. By their solicitor negotiating on their behalf – for more information see below
  5. By asking the court to decide – for more information please see the court process article in Resources

Deciding on which option is likely to be the most effective and suitable in your particular case is something you will need to decide. Most people do find it helpful to arrange an appointment with a specialist divorce lawyer simply to discuss the different options that are available in depth so that they can then decide on the best way forward.

Resolving matters between yourselves, or by using an alternative to court process (such as mediation or collaborative law) will mean that you and your spouse have control over the outcomes reached and the time frame taken. There is also far more scope for flexibility and creativity. In addition, you will keep your legal costs down. Using mediation and/or seeking legal advice from your own solicitor are best seen not as an “either or”. They are two different services that together offer a cost-effective and quicker resolution.

If you would be uncomfortable sitting in a room with your spouse to talk about finances, even with your divorce lawyer at your side, or have serious concerns as to whether full details of all the assets will be properly made available, then it may be that you will need to ask your solicitor to negotiate for you, or you may need to issue court proceedings, so as to have the benefit of the court timetable and powers. The court requires that before issuing an application that everyone, except in certain specified circumstances, gives full consideration as to whether mediation or other forms of alternative dispute resolution may be suitable for them and attends an assessment meeting with a mediator, either on their own, or with their spouse or partner to find out more about the mediation process. For more information please see the mediation information and assessment meetings article in Resources.

If you start off using one option, you can change to another if resolution is not achieved.
Whichever means you use to resolve the financial aspects of your divorce, you will need legal advice from a family law specialist, on whether the solution is fair and reasonable and also to prepare the paperwork to make your settlement effective and fully binding.

Solicitor negotiation outside the court process

The first stage in dealing with the financial aspects of a divorce, will be to deal with “disclosure”. This involves both parties providing full and frank details of all their assets and income, with documents in support.

This enables a true picture of the finances to be provided. There is a duty on each party to provide full disclosure of their finances and living arrangements and to up-date this when there are changes. Failure to do so can result in any agreement reached, or order made being set aside and an order that the offending party pay the other person’s costs.

The Law Society has developed a “protocol” to help parties and their solicitors try to deal with cases by agreement, without the necessity of issuing an application to the court. Under the protocol the parties agree to make voluntary disclosure by completing a standard comprehensive form, known as a Form E. Form E is also used in the court process and often used by couples participating in mediation or the collaborative law process.

Once disclosure has taken place and any questions arising out of the Forms E resolved, negotiations can then take place with a view to an agreement being reached. Such an agreement can then be incorporated into an order of the court to become effective and binding.

To contact Kim Finnis call 01483 539100.