Finances on Divorce
If you do decide to proceed with a divorce or you just wish to separate then it will be crucial to consider how this will affect you financially. However, these issues need to be resolved taking into account your individual circumstances and the law.
Case law has established that assets should be divided equally between parties wherever possible. However, there are circumstances when the Court can be persuaded otherwise. Catteralls family law team are experienced to be able to advise you about financial issues and the best approach to suit your own needs. We are also equipped to guide you through the Court process should this become necessary.
The best way to resolve the financial aspect of the divorce is for both of you to provide full details of your financial circumstances, supported by documentary evidence, and to come to an agreement concerning financial matters. The information you need to disclose is as follows:-
- P60 for last financial year;
- Last three months wage slips;
- Business accounts for the last 2 financial year, if you run your own business;
- Mortgage redemption statement;
- Current surrender value for any endowment or other policies;
- CETV (cash equivalent transfer value) for all pensions;
- Documentary evidence regarding all debts and loans;
- Copy bank statements for last twelve months for all accounts held;
- Documentary evidence of any other savings or investments.
After an agreement is reached, it can then be confirmed by a Court Order known as a Consent Order making it final and binding. The procedure for obtaining such an order is very simple. It is simply a matter of sending some agreed paperwork to the Court which then makes the order without anyone having to attend.
In some cases it is appropriate for one spouse to pay maintenance to the other, particularly if there has been a long marriage or there is a large difference between your respective incomes. In those circumstances maintenance can be payable until either party dies or sometimes for a limited period, with an option for it to be extended at a later date. The Court may also consider it is appropriate to capitalise maintenance. This would mean that the Court may order one party to pay a lump sum in lieu of maintenance so that the receiving party can invest the capital and receive an income from it in the future.
The level of maintenance payable depends on your individual circumstances. In any event the Court will always consider whether or not a maintenance order should be made at all.
The Court is under a duty to consider a clean break in every case. A clean break is an order which prevents either party returning in the future to make a claim against the other party in relation to their income, assets or pension entitlement. Even if there are no assets, a clean break order is usually advised.
It will be necessary for the Court to consider each party’s pension entitlement and how this should be divided. This area of law is very complicated and requires careful consideration within the context of the other assets of the marriage. It is often necessary to consult an independent expert known as an Actuary if the pensions are valuable. The Court is able to deal with the pension using various methods. They include the following:-
- Pension sharing
One party’s pension fund can be split to enable the other party to receive whatever percentage can be agreed or what the Court feels is appropriate. This percentage is then transferred into the recipients own pension fund, either within the existing scheme or to another scheme.
This method is rarely used but is a method whereby one party can claim a percentage of the other party’s pension upon their retirement. This can be unpopular as should you successfully obtain a percentage you would no longer be entitled to receive it, should your spouse die.
This is often used where there are smaller pension funds. Often, it can be agreed one party will receive a larger share of the capital assets to compensate them for the difference in the respective pension funds.
Please telephone Rebecca Baker or Lisa Sunderland on 01924 291122 to arrange you free half hour appointment.