Relationship breakdown

Financial issues

Settling your financial arrangements can be a major cause of conflict more complex than the divorce or separation itself. Your emeryjohnson family solicitor can help you identify what might be a fair division, explain the options for achieving this and negotiate on your behalf to reach an agreement.

Financial settlements can take the form of a 'clean break' or an ongoing maintenance arrangement. Even where there is a 'clean break' agreement, maintenance will still be payable for any dependent children.

The starting point for any settlement is a full and honest disclosure of personal assets by both parters. Our easy-to-use template will help to ensure you identify all of your personal assets, as well as your outgoings, to help you identify your needs and budget for your future.

Your emeryjohnson solicitor will advise you in clear terms about property ownership, capital assets, business interests, household outgoings and has the specialist knowledge and experience to advise on the complex area of law around the sharing of pension funds on divorce.

You can negotiate a financial arrangement for the future at any time before, during or after your divorce. However issues such as maintenance may need to be resolved before an overall settlement can be reached.

If you are using mediation services to help you reach an agreement, you will still need the advice of your emeryjohnson solicitor on any such agreement, which she can convert into an order recognised and enforceable by the courts.

Should you need to go to court to reach an agreement, the law is extremely flexible to allow the court to achieve fairness based on your individual circumstances. There are no rules about how much ongoing money, if any, should be paid to either spouse and the law does not, except in extreme cases, apportion blame or penalise either spouse for their behaviour during the marriage.

Under the Matrimonial Causes Act 1973, the court has wide powers to make financial orders as it sees fit and will take into account:

Should you have to resort to the court to settle a financial dispute, you will exchange financial details with your partner within a legal framework. This framework has been designed to encourage more agreements at an early stage to reduce the cost: both emotionally and financially.

The timing and wording of any application for an order is critical and your emeryjohnson solicitor will provide the essential advice you need.

Identifying your assets

The starting point for any negotiations must be a full and honest disclosure of each person's personal assets, to ensure that everything is included in the total to be fairly divided. Click here for an easy to use form to help you calculate your assets.

In most cases, the main asset will be your family home. As the needs of any children are the most important factor, the law recognises the importance of maintaining a suitable home for them. However, it is likely that there will be a number of ways to achieve this and your emeryjohnson solicitor will discuss your options and the wide powers of the courts with you.

In many cases, a pension can be an even more valuable than your family home and the law now allows a pension to be included with the assets to be fairly distributed on divorce. Even where this is appropriate, it is a complex area and the fund will not always be divided equally.

Don't forget to contact your own former employers to ask whether you have any pension provision and check your eligibility for a state pension. In cases involving pensions, family businesses, trust funds and other investments your emeryjohnson solicitor will guide you and call upon specialist expert advice where necessary. She can request documents from your spouse's solicitor or resort to the courts power to order documents to be divulged, if you do not have access to these.

Short term action plan

Your aim at this stage is to keep everything as normal as possible as you adjust to your new circumstances.

Since your family home is likely to be the main asset you will be dividing, you should ensure that mortgage (or rent) payments continue to be made together with any associated policies. If you are unable to keep up the payments, you should always write to the mortgage company or your landlord at the earliest possible time.

When property is owned jointly, mortgages are normally in joint names. This means that you are jointly liable to pay the monthly installments. Your emeryjohnson solicitor will discuss with you severing ownership of the property. This is relevant in the event of death.

If the property is in your spouse's name only, let your emeryjohnson solicitor know and she will advise you on how to register a charge against the property to ensure it is not sold without your knowledge. You should also tell her if your spouse owns any other property so she can ensure that this is not sold before a settlement is agreed.

If your bank account(s)/credit card(s) are in joint names you might consider changing to accounts in sole names or agreeing with your bank to only allow certain sums to be drawn when both of you sign. Freezing accounts is also an option to be discussed with your emeryjohnson solicitor.

As soon as you separate, you will be considered as separate individuals by the Inland Revenue and you should let them know of your new circumstances.

If there is only one adult in the household, you may apply to your local council for a 25% reduction in your council tax. You may also be entitled to state benefits. Let your emeryjohnson solicitor know before you make any claim as the Child Support Agency (CSA) automatically becomes involved when there are children involved and you are receiving certain benefits. This could therefore affect any claim made through the court. As a specialist in this field, your emeryjohnson solicitor can advise what is best in your particular circumstances.

Budgeting for your new life

With an understanding of your assets and an action plan for the short term, you will need to establish your ongoing expenses.

Armed with a complete picture of your financial position, your emeryjohnson solicitor will be able to get negotiations with your spouse's solicitor under way.

Click here for an easy to use form to help you take account of all of your ongoing needs.

As well as monthly payments, remember to include quarterly bills and annual insurance payments. It is also perfectly legitimate to include all of your normal expenditure from home decorating and car maintenance or travel expenses through the cost of keeping pets including vet's fees to regular haircuts, daily newspapers, even birthday presents.

You may need to seek advice from mortgage consultants, IFAs etc or instruct a specialist conveyancing solicitor to deal with any property transfers. emeryjohnson has good business links with such professionals and can, at your request, recommend and refer.

Your divorce settlement

Your emeryjohnson solicitor will talk you through the various options available or possible outcomes from the court; a 'clean break', which ends the financial obligations between you and your spouse, fixed term or ongoing maintenance payments, depending on which is most suitable for your particular circumstances.

In all cases, including a clean break, maintenance remains payable for any dependent child until they reach the age of 17 or 18 or completes their full time education, whichever is later. And the courts can still award a wife (or husband) a share of the other's pension on retirement if no other provision for pensionable age can be made at the time of the clean break.