Unfortunately, the financial side of separation can also be the most contentious. Couples often can't agree about who should get what, and it can lead to messy, strung-out legal proceedings.
Having a better understanding of how financial settlements work can ease the process, potentially avoiding disagreements. With sound legal advice and a willingness to cooperate and compromise on both sides, it’s perfectly possible to reach a fair agreement quickly.
So, let’s take a closer look at financial settlements during divorce, including how courts make their decisions in situations where you can’t agree.
Taking stock of assets
One of the first things your divorce solicitor will discuss with you is your assets. You’ll need to list everything you own, co-own or which was built up over the course of your marriage. This may include:
· The marital home – the value of the home you lived in together, regardless of who legally owns the property
· Other property – for example, holiday or second homes
· Money – held in current, savings and investment accounts, from both individual and joint accounts
· Pension savings – private, workplace and state pensions for both parties
· Personal assets – for example, motor vehicles, jewellery, antiques
· Anticipated assets – this means assets you except to acquire in the future, such as an inheritance or a redundancy package.
Crucially, the assets listed above will only be included in ‘the matrimonial pot’ if they were acquired after the relationship began. There are exceptions to this, but generally speaking - assets you already had before you were married are not divided up during a divorce, unless the parties’ needs require it.
The other important point to remember is that debts should also be listed alongside assets. You have joint responsibility for money owed, so it’s only fair that debts should be taken into account too.
Making a financial agreement between you
The best, quickest and easiest way to sort out financial matters during a divorce is by agreeing a settlement between you. With the help of your divorce solicitors, you and your ex-partner can choose how you’d like assets divided up.
Provided you can agree on everything and the arrangement is fair, you can make the agreement legally binding. This saves the need to go to court or have a third party intervene in the decision.
If you struggle to agree on a few points, mediation can help.
Can’t agree? How the courts divide assets
If you’ve been trying to thrash out an agreement with your ex and aren’t getting anywhere, the courts will decide how assets should be split. The court will make a financial order, stating who will get what and how the arrangement will be carried out.
Courts make their decision based on many factors, including:
· The length of the marriage
· Each of your ability to earn
· The amount of property and money
· Your ages
· Your current standard of living and living expenses
· Each person’s role in the marriage (i.e. primary carer, breadwinner).
Their aim is to make the fairest agreement for all parties, which includes any children you have together.
Financial issues during divorce can be difficult to resolve, but you don’t have to face them alone. Rely on the expert advice of Liverpool divorce solicitor Tracey Miller – call us on 0151 515 3036 to see how we could help.