What is the first stage of reaching a financial settlement?
The first step involves you and your ex-spouse providing full disclosure of your finances. This disclosure needs to cover all the income and capital resources you have, including:
- Salary
- Bonuses
- Savings
- Investments
- Pensions
- Property
If you have any outstanding debts or liabilities, these will also need to be disclosed. You might need to provide expert evidence in relation to any pensions or business accounts you have so that a clear picture can be given of their value, and so that this can be taken into account when a final settlement is reached. This information is recorded and submitted in a document called a Form E.
What happens after both parties have disclosed their finances?
After this has been done, negotiations about a fair and workable final settlement can begin. In deciding what a fair settlement will look like, it is important to remember that each case will be looked at individually. While it is possible to look at previous cases that have gone to court, as well as the guidance that is found in the Matrimonial Causes Act 1973, it is generally accepted that what works for one couple will not necessarily work for another. The approach that is now taken by English family law involves looking at “needs”, rather than a “reasonable requirements test” as was previously the case.
How will it be decided who gets what when dividing up assets?
This can be a complicated process – it needs to be decided what are to be considered ‘marital’ and ‘non-marital’ assets. If something is considered a marital asset it will be shared equally between the spouses unless it is required by one party to meet a “need”. ‘Non- marital’ assets are dealt with in the opposite way – they will not be shared, unless it is decided that this should happen so that a particular need is met.
How is it decided what is marital and non- marital property?
Again, this can be complicated. The parties, with the help of their divorce solicitors, will have to negotiate which assets should be considered when reaching a financial settlement. If it is decided an asset should be added to the pot for distribution between the spouses, there may also have to be negotiations on how much of that asset should be put into the pot. The length of the marriage and the nature of the asset in question can be relevant considerations when it comes to deciding this. Having the support of an experienced divorce solicitor at this time can be vital in making sure your personal position and assets are protected.
What about maintenance payments?
There has been a recent shift away from the idea that one spouse should pay the other maintenance for life. Instead, maintenance is more likely to be paid for an agreed term so that the divorcing couple can make a clean break as soon as is practicably possible. What these payments will be, and for how long they are paid, will often be decided based on the information disclosed in the Form E.
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