Divorce Settlements

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Divorce finances

For experienced and effective legal advice on all financial aspects of divorce, we are an ideal choice for clients in North London and London generally. Please do call or email to discuss your needs and find out why we are a good choice for you.

The first thing to say on financial settlements in divorce is that if possible, the parties should try and come to an agreement between themselves.

This can then be put into a Consent Order by the parties solicitors and sent to the Court for approval. Coming to a settlement this way will save the party’s time, money and a lot of aggravation. However, divorces are rarely amicable and often the assistance of the Court is required from the outset.

Financial settlement division on divorce – how it works

The Courts have wide powers when it comes to making a financial settlement in divorce and this includes the power to make various maintenance arrangements and orders, some of which are considered below. There is not set formula for how much the Court will order under a financial settlement and it will depend on the party’s individual circumstances taking into account the party’s capital and income as well as their liabilities.

The Court will always have regard for each party’s future earning potential or any plans to remarry in addition to the standard of living the party’s enjoyed, their ages, any physical or mental disabilities, the contributions each party has made to the welfare of the family and the party’s conduct.

Maintenance Payments

After calculating child maintenance, the Court will usually turn its attention to spousal maintenance. Spousal maintenance is usually paid over a fixed period of time but can be paid until death, remarriage (not cohabitation) or until the Court orders for it to stop. As with child maintenance, spousal maintenance is also expressed as an annual sum which is then paid monthly or weekly.

Ultimately, the Court’s objective will always be equality (for both the husband and the wife) , that is each party should be left financially independent of the other so that they can move forward with their lives, although this is not always possible. In some cases a “clean break” can only be achieved after a specific period of payments.

What is a clean break?

In its simplest form it draws a line under any financial ties between 2 parties, and once the break occurs, neither party can make any further claim against the other. Effectively ending any financial interdependence.

So when is it appropriate to have a clean break?

An immediate clean break will only be appropriate where both parties, upon financial settlement, are and will continue to be self sufficient.A clean break is usually not appropriate where there are children and there is a continued obligation on one party to pay spousal and/or child maintenance.

However, if a periodical payments order is made for one party to pay maintenance to the other then the Court or if by consent, the parties, will need to consider how long these payments are to continue. It might be that such payments are limited to a certain time span, at which point the receiving party will be self sufficient. If there is enough evidence to support this then a deferred clean break order may be imposed.

This delay might be 6 months to enable the receiving party to get a job, or for a few years to allow for studies an/or retraining. Or if there are children the term might be a lot longer until the children are less dependent.

It is not usually appropriate to impose a clean break on someone in their late 40’s or 50’s as their earning capacity is quite often limited, there are obviously exceptions if that party has substantial capital assets to sustain them going forward.

It is more likely, however, for there to be an order for nominal maintenance to be ordered or agreed which keeps the spouse’s claim for maintenance ‘alive’ so that in the future it can be varied if necessary.

If the date for the delayed clean break doesn’t seem to be workable in the future then the receiving party would have to make an application for it to be extended, evidence will be needed to show why that person has failed to become self sufficient as initially intended.

Disclosure of assets and information on divorce settlement

It is always advisable to seek to resolve divorce issues without resorting to courts but regrettably, it is not uncommon for one of the parties to try and hide assets. The other spouse may not even know about some business assets and this makes the process of disclosure a vital aspect of financial claims on divorce. Disclosure generally is often and key and hotly contested area of legal disputes. The party resisting disclosure will often claim that the other party is simply “fishing” for documents and evidence of the requesting party cannot clearly define what they are seeking. The court will also need to take into act proportionality, since in some cases, disclosure can be very time consuming and involve thousands of documents or emails or other data.

Child maintenance on divorce

Where children are involved there can never really be a “clean break”. Child maintenance payments are usually expressed as an annual sum for each child, which is then to be paid monthly or weekly. Child maintenance payments are usually made up until the child’s seventeenth birthday, but can continue further to cover their education.

Legal Advice on divorce finances

Regardless of how amicable a divorce might be, you should always obtain independent legal advice as solicitors are experienced in dealing with financial settlements and they will be able to make sure that you are receiving a fair share.