THE MARSHALL & GALPIN GUIDE TO FINANCIAL ISSUES ON DIVORCE
It is always advisable to try and reach a financial settlement on a voluntary and amicable basis. Where possible, we will always try to encourage direct communication between the parties in an attempt to achieve a speedy and cost efficient settlement. We are there to offer advice and guidance along the way. If an agreement is reached then we can prepare a formal and legally binding document embodying the terms of the agreement.
If direct negotiations are not possible we can arrange for the parties to attend mediation. There is a separate guide to mediation contained on our website.
If all else fails we can become directly involved with the negotiations or, as a last resort, we will issue proceedings in the court for a Judge to determine how the financial arrangements should be resolved.
Even if negotiations are proceeding on an amicable basis, any agreement must achieve a financial settlement that a Court will find acceptable. In the majority of cases we recommend seeking the Courts approval of the settlement as this is the only way in which absolute certainty can be achieved. Without court approval either spouse may, in certain circumstances, be able to renege from the agreement.
The Court takes various matters into account when considering what order should be made or whether to approve an agreement made on a voluntary basis. The Court considers all the circumstances of the case, gives first consideration to the welfare of any children of the family under the age of 18 and in particular, the Court has regard to the following matters:-
1. 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.
2. The financial needs, obligations and responsibilities which each spouse has or is likely to have in the foreseeable future.
3. The standard of living enjoyed by the family before the breakdown of the marriage.
4. The ages of each spouse and the duration of the marriage.
5. Any physical or mental disability of each spouse.
6. The contributions 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
7. The conduct of each spouse if that conduct is such that it would in the opinion of the Court be inequitable to disregard it.
8. The value to each spouse of any benefit which one spouse, because of the divorce, will lose the chance of acquiring (most usually pension provisions).
Overall, the Courts objective is to achieve a fair settlement .
In most cases the Courts no longer have power to make orders for child maintenance and an application to the Child Support Agency has to be made for child maintenance to be assessed. However, if child maintenance can be agreed, then it can be included in a Court order. We will be able to advise you on the likely level of child maintenance.
Whether negotiations occur voluntarily or proceed through the court, there is an absolute duty for both parties to disclose fully their financial positions. Failure to do so could invalidate any agreement or order.
Applying To The Court
If a voluntary agreement cannot be achieved, the next step is to make an application to the Court . Making the application is relatively straight forward and involves a modest court fee. Just because an application to the court has been made does not mean a settlement cannot be achieved voluntarily. Often the issuing of proceedings can help to break the deadlock by putting pressure on both parties and focusing the mind.
Once the application is made, the Court will apply a strict timetable. The Court will initially set a date for a First Appointment approximately 12 to 16 weeks after it issues the Application for Financial Provision. You will have to attend that hearing. Sometimes, where appropriate and following an application by either party, the court may make an interim order, for example, providing for one party to pay maintenance to the other.
Full disclosure of each party’s financial circumstances must be given before the first appointment and the Court must be given a statement of the issues relevant to the financial application.
Financial disclosure is achieved by simultaneously exchanging a document called Form E. This must be done at least 35 days before the First Appointment. Whether disclosure is made during amicable and voluntary negotiations or as part of the Court process, the sort of information that has to be disclosed is as follows (although this list is not exhaustive):-
1. recent mortgage statements;
2. copies of any valuation obtained on any house or other property in the last 6 months
3. copies of statements covering the last 12 months in respect of every Bank, Building Society or National Savings Account which are held, either in your sole name or jointly with another;
4. surrender value quotations for all insurance policies;
5. copies of your last 3 payslips and your most recent P60;
6. pension valuations; including the Cash Equivalent Transfer Value
7. copies of the last 2 years accounts for any business.
8. details of any debts or liabilities
9. copies of credit/store card statements.
10. details of all other assets/investments.
11. details of inheritances likely to be received in the foreseeable future.
The first hearing is usually used as an opportunity for the Judge to identify the issues and to decide how the case will proceed. The Judge may, for example, require the parties to obtain further information about assets or liabilities. The Court will then usually fix a date for a Financial Dispute Resolution Appointment. Both parties must attend that hearing as well. The purpose of the hearing is to see if the case can be settled without going to a full trial. The Judge will try to assist the parties in reaching an agreement and will usually give an indication about how he believes the Court will deal with the case if it went to trial.
If no settlement is reached then the Judge will give directions for a final hearing which, again, both parties must attend and at that hearing the Judge will make a final order which will resolve the financial dispute between you.
As you can see, there is quite a lot involved and the earlier you can get advice the better.
For further information, please contact:-
James Stonham (Thame) 01844 219102 email - mailto:james.stonham@marshallgalpin.com
Simon Bassett (Abingdon) 01235 557008 email - mailto:simon.bassett@marshallgalpin.com
Mark Phillips (Oxford) 01865 268630 email - mailto:mark.phillips@marshallgalpin.com
Angela Davies (Thame) 01844 219110 email - mailto:angela.davies@marshallgalpin.com
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