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Divorce Financial Settlements Explained
Divorce financial settlement is the process of dividing assets and liabilities between spouses when they separate. It’s essentially who gets what after a couple separates and involves decisions about how assets should be divided.
This process makes sure that both people get a fair share of the things they own together, like property, money saved, businesses, investments, and pensions/retirement funds.
It’s a critical aspect of the divorce process because it determines the financial futures of both individuals and any children involved.
A divorce financial settlement is a legally binding decision and will cover the specifics of your financial situation and assets including any marital home. If you and your ex-spouse or civil partner do not reach an agreement they could make a financial claim against you in the future.
How Divorce Solicitors Can Help
If you and your ex-partner agree on how to settle your finances, our divorce financial settlement solicitors will draft a legally binding agreement for you. If you are unable to agree, we will advise you on negotiations and represent you in court if needed.
We can also help with any financial orders that need to be obtained. If you are not married, we can also help with financial settlements during separation.
We can help create a financial settlement that deals with and/or protects:
- Rights to property.
- Savings.
- Shares.
- Pensions.
- Any international assets.
- Liabilities for debts.
- Businesses and business assets.
- Custody of children and child arrangements – along with any child or spousal maintenance payments, school fees etc.
We offer transparent, up-front pricing and will provide you with a price estimate before starting any work.
Our promise to you
Divorce and separation does not have to be complicated or costly. If you are thinking about separating, or even getting divorced, we offer advice through a range of affordable fixed fees or competitive hourly rate services to give you the advice and support you need at a price you can afford.
The Howells Solicitors promise to you:
No surprises: We will provide a written estimate of costs at the outset of any case and keep you regularly informed of your costs position throughout.
No legal jargon. We will take time to understand your needs and provide clear explanations, so you completely understand what’s going on every step of the way.
Minimise stress. The breakdown of a relationship is invariably one of the most difficult situations anyone can encounter. We will help you reach the best possible outcome for you and your family with the least possible distress. We understand the importance of seeking to find amicable solutions to the issues that need to be resolved during the divorce or separation process. However, we will always have your best interests at the forefront or our actions, and we will strive to get you the best outcome possible.
Fair pricing. We always do our best to minimise cost where possible. Our fixed fees and transparent costings mean you know how much your legal work will cost. Our hourly rates are some of the most competitive across England and Wales.
Our team of divorce financial settlement solicitors are part of one of the largest family law teams in the north of England. The team are accredited in the Legal 500 as one of the top family law firms in the country. They are accredited by Resolution and the Law Society, and have many positive client reviews, earning them a rating of 4.9 out of 5 on Review Solicitors.
Why Are Divorce Financial Settlements Important?
The division of divorce assets (matrimonial assets) is a critical aspect of any divorce. Ensuring a fair and equitable distribution of assets can have a significant impact on both parties’ financial well-being post-divorce. Here are some key reasons why asset division is essential:
Financial Security – Ensuring that both parties receive a fair share of the marital assets helps provide financial security for both individuals. This is especially important if one spouse was financially dependent on the other during the marriage.
Avoiding Future Disputes – By addressing all financial matters during the divorce process, both parties can move forward with a clean slate. This minimises the potential for ongoing legal battles and emotional stress, which can be costly and time-consuming.
Legal Obligations – Family courts have a duty to ensure that the division of assets is fair and in accordance with the law. A divorce financial settlement solicitor can help ensure that all legal requirements are met, and that the settlement is legally binding.
Additionally, a divorce solicitor can provide valuable insights into how the law applies to specific assets, such as a family businesses, international properties, or complex investment portfolios.
Our family teams’ expertise will ensure that your settlement is comprehensive and legally sound, reducing the risk of future legal challenges.
Services Provided by our Divorce Financial Settlement Solicitors in Sheffield, Barnsley, Rotherham, London and Nationwide
There are several ways our divorce team can support you through a financial settlement agreement, including:
- Negotiations.
- Court decision.
- Consent order or financial orders.
- Collaborative law.
- Settlements following a divorce completed online.
- If you are divorced with no assets but want to prevent claims in future.
It is often possible to avoid going to court and to reach a settlement as our divorce solicitors are expert negotiators. We also have a qualified collaborative law team.
However, if an amicable resolution is not possible, our divorce solicitors will support you through any court appearances and reach a fair financial settlement for you.
It’s important to remember that even after a divorce is finalised, it could be still possible for financial claims to be made by or against a former spouse unless a clean break order is obtained.
Contact us or call us on 0114 2235 807 to book your free appointment today with a divorce solicitor.
How Are Assets Split in A Divorce?
One of the judge’s primary concerns when looking into who gets what in a divorce financial settlement will be to ensure the needs of each party are met. If you have children, their needs will always be prioritised.
Several factors will be considered when determining how the assets should be divided. This includes how long the parties have been married or in a civil partnership, whether they lived together before they married and how long for as well as, but not limited to, each party’s:
- Assets
- Age
- Earning Capacity
- Reasonable Living Expenses
- Disability (if applicable)
- Liabilities
- Children
A divorce financial settlement drafted by a divorce solicitor can be more likely to meet the court’s criteria than one made without professional guidance.
How is a Divorce Financial Settlement Calculated?
Whilst the aim of the divorce court will be to divide assets in a fair and equal way, this does not always mean being split 50/50. Other factors such as the needs of each party, child arrangements and future earnings potential will all be involved in the decision.
Calculating a divorce settlement can vary depending on the individual’s circumstances. A divorce financial settlement is typically determined by considering several key factors:
Assets and Debts: The court will consider the value of marital assets (e.g., property, vehicles, investments) and debts accumulated during the marriage.
Income and Earning Potential: The court may assess each spouse’s income and earning potential to determine spousal support if applicable.
Child Custody/Arrangements and Child Maintenance: If there are children involved, their well-being is given priority. Factors such as child custody arrangements, visitation schedules, and child support obligations are considered. A financial settlement solicitor can also help you with child custody matters.
Contributions to Marriage: The court may consider the contributions made by each spouse during the marriage, including financial contributions, homemaking responsibilities, and childcare.
Length of Marriage: The duration of the marriage can also influence how assets and debts are divided.
Needs: The financial needs of the parties and any children both now and in the long-term
It’s important to consult with a divorce financial settlement solicitor who specialises in divorce proceedings to understand how these factors apply to your specific situation since laws can differ from one case to another.
Contact us or call us on 0114 2235 807 to book your free appointment today with a divorce solicitor.
Do You Need a Financial Settlement as Part of a Divorce in the UK?
Whilst you can still be granted a divorce without a financial settlement, it is highly advisable to obtain one. This will avoid any complications, delays, or further legal costs.
The family court can approve any financial settlement from the conditional order (formerly known as decree nisi) stage in the divorce. Without a divorce financial settlement, you can run the risk of not receiving what you are entitled to.
Your ex-partner could also try and make a financial claim against you in the future, even years after the divorce is finalised including a share of assets accrued in the years after the divorce has taken place.
It is important that a financial settlement is approved by a court. If it isn’t, it will not be legally binding and could leave you at risk of further disputes later.
What Are Matrimonial Assets?
Matrimonial assets are any financial assets that have been acquired together from the start of a relationship. This includes the time you spent living together before marriage. Matrimonial assets, depending on circumstances, can include:
- Any property purchased, such as the family home.
- Savings.
- Investments, including a family business.
- Possessions, such as vehicles, furniture, electronics.
- Pensions.
Anything purchased prior to the start of the relationship is normally classed as a non-matrimonial asset and the usual position is that non-matrimonial assets are ringfenced from consideration unless they are required to ensure the meeting of financial needs in future.
Financial Orders in Divorce
Financial orders in divorce can sever the financial commitment between you and your ex, meaning neither person can make a claim on any finances in the future. These financial orders will outline what will happen to your assets (including any debt) after you have divorced.
Not only will financial orders deal with the distribution of your assets, but they will also deal with:
- Equalising pensions by way of a pension sharing order or otherwise.
- Transferring or selling property.
- Spousal maintenance.
- Child maintenance.
- If appropriate a clean break preventing financial claims against each other in future.
Which financial order you will require will depend upon your circumstances and these are outlined below.
Consent Order
A consent order will list all assets and outline how these will be divided. It can also include to a clean break order to stop any future financial claims in the future. However, a consent order is only appropriate if both you and your ex-spouse reach an agreement on how assets should be distributed.
Financial Remedy Proceedings
If you or your ex-partner can not reach an agreement about how your assets will be divided, then either of you can apply to court for a judge to impose a financial remedy order. These specific orders are listed below.
Lump Sum Order
This is an order for your ex-partner to pay you a lump sum or a series of lump sums.
Property Adjustment Order
This is an order relating to the matrimonial home or other property within your respective ownership. The Court can order a transfer of property between you or make an order for sale if deemed appropriate.
Pension Sharing Order
This is an order transferring pension provision from one spouse to the other usually to equalise pension provision for retirement.
Legal Services Payment Order
This is an order requiring your former partner to contribute towards the legal costs of your case.
Maintenance Pending Suit
This is an order that your former partner provide you with emergency spousal maintenance whilst your case is ongoing.
Spousal Maintenance/Periodical Payment Orders
Spousal maintenance is an arrangement where one spouse provides financial support to the other after a separation or divorce. These arrangements can be made on a short term or long term basis or be paid in a lump sum. Spousal maintenance can be arranged as part of a financial settlement.
Clean Break Order
A clean break order prevents any future financial claims between both spouses. The agreement draws a line under the division of any assets. This means any future windfalls or inheritance cannot be claimed by an ex-spouse.
It is strongly advised to speak with a divorce solicitor regarding a consent order or any financial orders in a divorce to ensure the best outcome for your situation. It’s important to remember that even after a divorce is finalised, unless terms of settlement are properly finalised it could be still possible for financial claims to be made against a former spouse. A solicitor can also help negotiate the best financial settlement for your family.
What Happens to the Family Home in Divorce?
There is no straightforward answer to determining what happens to the marital home after divorce. A range of factors will be considered, and the most important one is usually each party’s housing need where the children will live in future. The economically weaker party might need a larger share of the assets to meet their need. Every case will depend on its individual circumstances.
If you own the property jointly, this could either be as joint tenants or as tenants in common. It is important that you establish which it is, and our divorce solicitors can help you with this.
Joint Tenants in Divorce
In a joint tenancy, it is assumed that you own the property equally, although the court may adjust the shares based on the circumstances. When one joint tenant passes away, their share automatically transfers to the surviving tenant, regardless of what is specified in your will.
Tenants in Common in Divorce
As tenants in common, each of you holds a distinct percentage of the property, such as 70/30 or 50/50. If you own a property this way, your share will not automatically transfer to the other co-owner upon your death.
Business Assets in Divorce
A Family Business: If you and your spouse or partner are in business together, there are things you will need to consider if you get a divorce or separate. When deciding how to divide up a family business the court will consider several factors, such as how the business was set up, contributions made by each owner, commercial prospects and any assets involved in the business.
This will determine how the family courts will determine any financial settlement or distribution of assets from the business.
Ownership or Shares in a Business: It is often thought that a business will not be considered in a divorce, but that is not the case. Any shares you have in a business will be considered an asset. Your share of any value in the business (or that of your spouse) will be considered when calculating the overall matrimonial pot to be divided between spouses.
Its is best to discuss your business assets with your divorce solicitor who can help you protect your business interests.
Divorce Financial Settlements Frequently Asked Questions
How is financial settlement calculated in a divorce?
The family court will consider how parties’ assets can be divided in the fairest way, meeting each party’s needs and those of the children and considering the factors listed above. Earnings and potential future earnings will also be considered.
How long does it take for a financial settlement in divorce?
Typically, a divorce settlement will take between 9 and 12 months. If an application is made to the court this could be longer, depending on when the application is made. Factors such as the length of the marriage, the contributions of each spouse, and future financial needs are considered. Properly managing these factors can result in a settlement that provides stability and security for both parties. This is where a divorce financial settlement solicitor can help.
What happens to the mortgage after divorce?
If the mortgage is joint then your divorce is irrelevant and you both remain as liable for paying it as if you were still together. You can continue paying off the mortgage together or may agree something else, whether you both live in the house, one party lives in the house, or even if neither you nor your ex-partner does.
What happens to a pension in divorce?
Pensions are often one of the biggest financial assets in divorce for consideration and the Court would normally consider that any pensions accrued during the marriage should be shared. It is vital that the issue is not overlooked to ensure that needs in retirement will also be met. How a pension is shared will depend on the type of pension you have. The options available will be a pension sharing order, pension offsetting or a pension attachment order. Your divorce financial settlement solicitor can discuss your pension options with you.
What should I ask for in a divorce financial settlement?
It is essential to obtain specialist legal advice from a lawyer who has experience in dealing with financial settlements on divorce and who can guide you through the process, be it providing advice on an agreement you may have reached directly with your spouse already, or full advice confirming what financial settlement you should be looking to achieve.
Our Divorce Financial Settlement Solicitors
Our divorce financial settlement solicitors represent clients in:
- Sheffield
- Barnsley
- Rotherham
- Chesterfield and Derbyshire
- Other South Yorkshire areas
- London and surrounding areas
- Nationwide (throughout England)
The divorce team also offer a free 30-minute consultation on your first visit, which can be made face-to-face, on the phone or by video call.
Contact us or call us on 0114 2235 807 to book your free appointment today.
Our Divorce Financial Settlement Fees
Our divorce solicitors offer transparent and affordable prices to suit all financial circumstances. You will always be kept up to date with costs and they offer fixed fees for most areas, so you are always in full control.
Find a full list of our fees here.
Free Legal Consultation
Our family law team offer a free legal consultation to new clients. You can book an appointment by telephone, video call or in person.
Contact us or call us on 0114 2235 807 to book your free consultation today.
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