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UNDERSTANDING PERSONAL FINANCES IN DIVORCE LAW
Joanne Raisbeck , partner in Hill Dickinson ’ s family law team , talks us through resolving financial issues in divorce .
When a couple separates , resolving financial issues usually involves more time and cost than any other aspect of divorce .
Joanne Raisbeck , partner in Hill Dickinson ’ s family law team , talks us through this complex and discretionary area of the law .
Do I need a financial remedy court order if I get divorced ? The short answer is yes . Ending your marriage does not automatically dismiss the ability of your former spouse to bring a financial claim against you either now or at some point in the future . Marriage creates wide ranging financial responsibilities between spouses , and these can only be ended by a separate financial remedy court order , even if you have little or no assets to share between you . Without an order , there is a risk your former spouse could make a financial claim against you , even if your divorce were concluded many years earlier .
Do I have to tell my spouse about my financial position ? Yes , and your spouse must also provide you with full and frank information about their finances because in matrimonial law there is a duty of financial disclosure . This duty continues until a settlement is reached . In most cases , spouses freely cooperate with this obligation and the process is voluntary .
Often spouses agree to complete financial disclosure in a standard form called a Form E . This detailed document requires complete transparency to be provided about each person ’ s assets , pensions , liabilities , and income .
Do I still need a financial court order if we are able to reach direct agreement ? Yes . An informal agreement does not dismiss your mutual financial claims arising from your marriage . You will still need a financial remedy order albeit it is possible to obtain this by consent .
What services are available to assist me to reach a financial settlement ? Even in the most amicable of separations , often couples need guidance to resolve the financial consequences of their divorce . There is an array of services available to assist couples navigate the process and reach agreement . Some of these include mediation , collaborative law , solicitor negotiation and arbitration . As a last resort you can issue formal court financial remedy proceedings .
If I need to make an application to the court what is involved ? An application to the court will result in an immediate timetable to ensure progress . The process is settlement orientated and most couples find
a compromise along the way which then results in settlement between them . It is rare for a court to have to decide at a final hearing , although this can happen .
Before proceeding you will need to attend a meeting with a mediator called a MIAM . If your case is not suitable for mediation , then you can start the court process . Initially the court will fix a timetable to exchange financial disclosure in Form E as well as directing the preparation of other important documentation in readiness for the first hearing .
The first hearing is procedural and will examine what needs to happen to enable a clear financial picture . Sometimes there are questions arising from the disclosure process or expert valuation evidence is needed . The second hearing is then a negotiation hearing . To assist the couple in negotiations the court will provide an indication as to the possible outcome of the case . If despite all efforts a compromise cannot be reached , then the last stage is a final hearing .
How does the court decide what is a fair outcome ? In matrimonial law the court has wide discretion in deciding how to fairly distribute assets upon divorce . The court will take into account statutory criteria to include : income and earning capacities , financial needs , obligations and responsibilities , the standard of living in the marriage , the ages of the parties and length of the marriage , any mental or physical disabilities , contributions made to the welfare of the family and conduct ( although this latter factor applies in limited circumstances only ).
Who pays the costs ? In most cases each spouse is expected to pay their own costs of obtaining a financial settlement , but there are exceptions to this . Sometimes it is also possible to obtain an order for your spouse to provide assistance with your legal costs but again this is case-specific and applies in limited circumstances .
Before deciding to separate , take legal advice to see what approach is best given your personal circumstances .
If you would like to discuss financial remedy court orders or any other issues arising from relationship breakdown , please contact Joanne Raisbeck at joanne . raisbeck @ hilldickinson . com .
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