Divorce Finances
Following the breakdown in your marriage, you should address the financial issues and ensure a financial settlement is agreed, where possible. There are many factors that have to be addressed. You may jointly own your home and you may have dependent children residing in the property. The future of your property therefore needs to be addressed as part of any financial negotiations following separation. You may have second homes that need to be sold or transferred.
If you own a business, the future of the business will need to be considered.
There are many concerns and advice should be sought as soon as possible post separation (if not before) to discuss where you stand and to understand the steps that need to be taken.
A Consent Order
If you agree a financial settlement with your spouse, following separation, you should make arrangements for a Consent Order (also known as a Financial Order) to be prepared, detailing the terms of your agreement. A Consent Order is a document detailing the terms of a financial settlement, willingly entered into by both parties and filed with the Court for approval and sealing during the divorce process. Once sealed by the Court, a Consent Order becomes a legally binding Order of the Court.
A Consent Order can also be approved by the Courts after divorce proceedings have concluded. It is not uncommon for people who have been divorced for several years to invite the Court to approve a Consent Order, detailing the terms of their financial agreement, long after the divorce proceedings were concluded.
Why should a Consent Order be approved by the Court?
Many people are not aware that applying for a divorce does not automatically address all financial issues, and finalising the divorce does not automatically close the door on financial claims. Often, people find themselves on the receiving end of a financial application made by their ex-spouse long after the divorce proceedings have been finalised.
You should therefore ensure that a solicitor prepares a Consent Order, detailing the terms of a financial agreement. This ensures that the Order closes the door on future financial claims, where appropriate, and does not leave you exposed to future financial claims.
Additionally, if your financial agreement includes pension sharing provision, only the Court can make a pension sharing Order and, without a sealed Order and Pension Sharing Annex, the pension company will refuse to implement pension sharing. Therefore, if your agreement includes pension sharing, the Court will need to Order that so that it can take effect.
You should, however, be aware that, in some instances, it is inappropriate for a Consent Order to completely close the door on some financial claims, in particular, where one party is paying spousal maintenance to the other party. In those cases you should seek the advice of a Solicitor if you are the paying party or the party in receipt of spousal maintenance.
What if we can not agree the terms of a financial settlement?
If you and your spouse cannot reach an agreement regarding your finances, an application to the Court may be necessary. The Court would order both you and your spouse to provide full details of your finances to the Court and to each other. If your spouse is obstructive and refuses to provide their financial disclosure, the Court can order the other party co-operates and penalties may be imposed in some instances.
Prior to making an application to the Court for a financial settlement, unless you are covered by an exemption (an example of an exemption would be where there has been domestic violence), the Court will have expected you to have explored Mediation as a means to resolving your divorce finances, with a view to reaching agreement away from the Court.
There are other alternative dispute resolution options available and we have experienced an increase in cases being resolved in Arbitration. Provided both you and your spouse agree to your case being resolved in Arbitration, it is proving to be an option for reaching a financial resolution swiftly, avoiding the extensive delays that can arise in Court proceedings. Please contact us for more information regarding alternative dispute resolution options.
Urgent financial applications
If, for example, your spouse has stopped assisting you financially and you are struggling to meet your financial obligations, you may need to make an urgent application to the Court to seek an Order for interim spousal maintenance (also called an application for “Maintenance pending suit”).
We can represent you in Court proceedings relating to divorce finances.