RODNEY KING & PARTNERS
Call Free on 0800 069 9503
Divorce Settlements and Finances - FAQs
Below are some of the most frequently asked questiona about divorce settlements and finances. Click on a link to jump to that question.
- Will we have to go to Court to reach a financial settlement?
- How is a divorce settlement arrived at?
- What is a clean break financial settlement?
- Who pays the legal fees for a divorce settlement?
- What happens to the family home?
- Am I entitled to spousal maintenance after a divorce?
Will we have to go to Court to reach a financial settlement?
A settlement can be negotiated between the parties, with the assistance of their solicitors, without the need to go to Court. This can help to minimise the legal fees incurred by both sides.
If an agreement is reached in this way it will then be check
ed by the Court to ensure that it is reasonable and endorsed by them to make it a legally binding order.
The majority of cases can be agreed in this way.
If an agreement cannot be reached in this manner, either due to one or both parties being uncooperative or unreasonable, then it will be necessary to go to Court to achieve an agreement. But the potential outcome of the Courts ruling on a settlement is that a degree of control is lost by both parties as to the eventual terms of the settlement.
Back to top of Divorce Settlements FAQ
How is a divorce settlement arrived at?
An agreement can be reached either by negotiation between the parties and their solicitors, or through the Court process if necessary. The Courts will assess how any capital should be divided as well as whether or not income should be shared.
The negotiation of a financial settlement will take into account the following factors:
- Children – their financial needs as well as other factors that may affect their future wellbeing
- The length of the marriage
- The current earnings of each party
- The potential earning capacity of each party in the future
- The assets of each party including pensions
- The standard of living the couple have enjoyed during the marriage
- The financial contribution that each party has made to the marriage
- Other contributions that each party has made to the marriage (non financial), such as caring for the children and running the house
Back to top of Divorce Settlements FAQ
What is a clean break financial settlement?
A clean break is where no ongoing financial commitments remain between the parties. A clean break can even be achieved in cases where ongoing spousal maintenance would normally be payable, if enough assets exist to enable the liable party to transfer a suitable amount to offset the future maintenance liability.
A clean break is only possible in relation to your spouse and not your children. It is not possible to achieve a clean break in terms of financial responsibility for children.
Back to top of Divorce Settlements FAQ
Who pays the legal fees for a divorce settlement?
In most cases, both parties will have their own solicitor and will be responsible for their own legal fees.
In certain circumstances it may be possible to include the payment of legal fees as part of the financial settlement if this is included in the negotiations.
Back to top of Divorce Settlements FAQ
What happens to the family home?
The family home will usually be an asset of the marriage and will therefore be included in the financial negotiations. Divorce settlement negotiations start from the point of an equal division of assets between the parties. If one party wishes to retain the family home then they will need to have enough other assets to be able to offset the value of their partners share of the home by transferring assets of that value to their ex-spouse.
If not enough assets are available to achieve this then the family home may have to be sold so that the equity contained in it can be split between the parties.
If the couple have children then this can sometimes mean that one party can stay in the family home with the children. The Courts always place a high level of importance on the needs of the children. However, the Courts will not allow an unfair settlement to either party, so this type of arrangement will depend on the other parties financial circumstances and their ability to afford a second home to live in. The partner leaving the home can maintain a financial share of the family home, which they will realise at an agreed future date upon the eventual sale of the property.
Back to top of Divorce Settlements FAQ
Am I entitled to spousal maintenance after a divorce?
This will depend on many factors including:
- How long you were married
- The standard of living you enjoyed before the divorce
- Your respective financial needs and the financial needs of any dependent children
- The current earnings of each party
- The potential earning capacity of each party in the future
- The contribution made to the marriage, either financial or by caring for children and looking after the family home
For example, if a young couple with no children have been married for only a short time and both are working, then it may be fair
for them both to leave the marriage with no ongoing financial ties and taking with them what they brought into the marriage.
If a couple have been married for 25 years and by agreement the wife gave up a career to bring up the family at home, while the husband became the sole bread winner, then the wife’s future earnings capability may be severely compromised.
In these circumstances the wife should not be penalised for her lack of earnings ability and may be entitled to ongoing spousal maintenance.
Back to top of Divorce Settlements FAQ
