In the event of a divorce or dissolution, spouses or civil partners have the right to make financial claims against each other by applying to the Court for orders for any or all of the following:
- Maintenance, called Periodic Payments
- Adjustment of property ownership e.g. transfer of a house from joint ownership to sole ownership
- Sale of property
- Lump sums
- Pension sharing or pension attachment
Applying to the Court for “financial remedies” is usually the last resort. We will advise on the alternatives, such as mediation. However, how the Court might resolve financial disputes is the starting point for achieving a settlement.
The Court is required to take account various factors when considering what order should be made. These are set out in section 25 of the Matrimonial Causes Act 1973. The Court considers all the circumstances of the case but gives first consideration to the financial needs of any children of the family. Then the Court has regard to the following matters:
- The income, earning capacity, property and other financial resources which each spouse has or is likely to have in the foreseeable future including, in the case of earning capacity, any increase in that capacity which it would be, in the opinion of the court, reasonable to expect a person to take steps to acquire.
- The financial needs, obligations and responsibilities which each spouse has or is likely to have in the foreseeable future.
- The standard of living enjoyed by the family before the breakdown of the marriage.
- The ages of each spouse and the duration of the marriage.
- Any physical or mental disability of each spouse.
- The contribution which each spouse has made or is likely to make in the foreseeable future to the welfare of the family, including any contribution by looking after the home or caring for the family.
- The conduct of each spouse, if that conduct is such that it would, in the opinion of the Court, be inequitable to disregard.
- The value to each spouse of any benefit which one spouse because of the divorce will lose the chance of acquiring (most usually pension provision).
The aim of the Court is to achieve a fair outcome. The court will firstly decide what the financial needs of all parties are (e.g. how much is needed to re-house) and assess how those (often competing) needs can be met. This may override any possibility of an equal division of assets. The Court can take account of pre-owned assets or assets obtained after separation, such as bonuses and inherited wealth - often referred to as non-matrimonial assets. Departure from equal division is not automatic and will depend on the circumstances of the case.
In most cases, the Courts no longer have power to make orders for child maintenance except by agreement; an application to the Child Maintenance Service may be required for child maintenance to be assessed, assuming agreement cannot be reached.
In financial proceedings there is a duty of full and frank financial disclosure. This means it will be necessary for the parties to completely and honestly disclose their true financial positions throughout any negotiations or proceedings. If full and frank financial disclosure is not forthcoming, then it is open to the spouse whose position has been prejudiced to ask the Court to re-open the matter at some point in the future which inevitably may lead to legal costs paid by the non-disclosing party.
It is only on the basis of full and frank financial disclosure that we can provide proper advice as to what is an appropriate settlement and how a Court might decide matters if agreement cannot be reached.
Family law solicitors
If you have any queries regarding a financial settlement please contact our family law legal team in Guildford on 01483 451900.