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The Financial Settlement

You can obviously save money if you can resolve your differences yourselves rather than going to court. If you do reach agreement without lawyers or getting the agreement made into a court order, this does not stop your spouse or civil partner going to court later on to change your agreement and seek a different outcome.

This section explains the things to think about when working out what the future financial agreements should be, and how best to protect that agreement from being changed in the future.

Reaching an agreement between you

If you do reach an agreement yourselves make sure you record everything you have agreed in writing and each sign and date it and keep a copy. That way, you have good evidence of your original agreement if your spouse or civil partner tries to change it later. The best way of preventing them from trying to do so is to formally record its terms in a consent order, which is signed by both of you and sent to your local county court and approved by a judge. To increase the likelihood that the court approves the agreement there should be:

  • good, full and frank financial disclosure
  • no suggestion of any pressure put on either of you to agree
  • no misinterpretation
  • legal advice given to each of you (or evidence that you chose not to take it)
  • terms that are clear and complete
  • an outcome that is generally 'fair'

Reaching an agreement with help

If you and your partner cannot agree, or your affairs are complicated, you may need to seek advice from a solicitor and/or use court proceedings. You can get help from a mediator (a professional skilled in helping people to negotiate with each other), or a family lawyer – see Useful links.

What a court would decide

If you decide to make an agreement between yourselves it can be useful to know what a court might decide. This is what a solicitor will do to negotiate a settlement for you. A court will focus on the needs you each have and make a decision that is fair in all the circumstances. See If you have children, Living arrangements and Splitting the things you own for details on how the different parts of your and your spouse or civil partner's affairs may be dealt with. This section explains the types of orders that a court can make. Which of these elements are right for your situation will depend on your individual financial circumstances.

A judge in England and Wales will look at the whole situation before deciding what would be a fair outcome for you and your spouse or civil partner. First and foremost, they will bear in mind the welfare of any children and will try to ensure that the housing and maintenance needs for them is met. The other things that a judge will consider include the following:

  • The length of the marriage or civil partnership.
  • Your ages.
  • Your earning capacities.
  • Any property and other financial resources you each have or will have in the future.
  • Your financial needs, obligations and responsibilities.
  • The standard of living you had during the marriage or civil partnership.
  • Any physical or mental disability that someone in the family has.
  • The contributions that have been made, including non-financial ones such as looking after the family.
  • Any bad behaviour (although this has to be exceptional).

A judge will then decide what the fairest solution will be, making sure that the family's needs have been met as far as possible. If there isn't enough to meet everyone's needs, then those of any children will be met first. This means that, for example, the parent who has main day-to-day care of a child may receive a greater share of the proceeds of sale of the family home or be able to stay in it if that is the only way to make sure any children have a home.

If possible, a court will try to make a clean break between you and your spouse or civil partner. This means that the capital (property, savings, investments and pensions) are shared between you and there is no ongoing financial relationship between you. However, for the majority of people there will not be enough to provide for you both to have somewhere to live and enough to live on. In these situations there will be an order for the person who has the higher income to pay some of it to the other (called maintenance).

If there is income and other assets left over after your needs and those of your spouse or civil partner and your children have been met, a judge will look to see whether any of the circumstances of your relationship mean that it would be fair for that extra to be kept or given to one of you as compensation for any disadvantages that they have experienced as a result of the marriage (for example, giving up the chance of having a highly paid career to bring up children).

Maintenance
Maintenance

The amount of income you receive from a former partner depends on a number of factors.

Find out more about maintenance
Financial support for children
Financial support for children

If you need help either you or your partner can apply to the Child Support Agency which can decide the amount of maintenance and make sure the payments are made.

Find out more about financial support for children
A lump sum
A lump sum

The settlement could include an agreement for one of you to pay the other a one-off lump sum.

Find out more about a lump sum
Property and possessions
Property and possessions

The settlement may include agreements to transfer property from one of you to the other or from joint names into one of your sole names.

Find out more about Property and possessions
Pensions
Pensions

A court must take into account any pensions and pension rights that you or your partner have in work-based schemes and personal pension plans.

Find out more about Pensions
Enforcing a settlement
Enforcing a settlement

If a problem arises and the settlement is not being abided by you may apply to a court to enforce the terms of your agreement.

Find out more about enforcing a settlement

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