Divorce and Finances

 The ‘financial remedy’ procedure is a process where you ask the court to help you decide how you will split up your money, pensions, property and possessions. The process will take some months and can end with usually a district Judge deciding how everything will be divided.

Here at Vincent’s our approach is to facilitate agreement, protecting you and your children's futures without prolonging matters and without hostility and needless wrangling.  If you have any queries regarding divorce and finances give us a call today.

There is a statutory criterion which provides guidance to the Judges as to how they should divide the marital assets and as to what constitutes marital assets as set out below:

Section 25 Matrimonial Cause Act 1973
(a) the income, earning capacity, property and other financial resources which each of the parties to the marriage has or is likely to have in the foreseeable future;
(b) the financial needs, obligations and responsibilities which each of the parties to the marriage has or is likely to have in the foreseeable future;
(c) the standard of living enjoyed by the family before the breakdown of the marriage;
(d) the age of each party to the marriage and the duration of the marriage;
(e) any physical or mental disability of either of the parties to the marriage;
(f) the contributions made by each of the parties to the welfare of the family, including any contribution made by looking after the home or caring for the family;
(g) in the case of proceedings for divorce or nullity of marriage, the value to either of the parties to the marriage of any benefit (for example, a pension) which, by reason of the dissolution or annulment of the marriage, that party will lose the chance of acquiring;

The overriding objective of the above is the welfare of any child or children.

As can be seen the courts take a large range of factors into account. We will advise you on how those factors apply to your situation.

The family’s financial resources are looked at in detail. That is why financial disclosure is always the first step in any discussions. Both parties are required to give full and frank disclosure of all their assets, capital, income and pensions. Failure to be frank and open could lead to the court drawing adverse inferences against you.

What should be disclosed?

You should start to gather together your financial information as soon as possible. This should include the following:

•  A valuation of the matrimonial home and any other property or buildings owned by you, or in which you have an interest, and a recent mortgage statement in respect of each.
•  Bank and Building Society statements for the past 12 months, for accounts held by you in your own name or jointly with another person.
• Details of all life insurance policies and the surrender values, if any.
•  Full details of all other assets and investments.
•  If you have an interest in any business, a copy of any document on which you base a valuation of your interest, and business accounts for the last 2 years. DO NOT go to the expense of a valuation as one may not be necessary.
• An up to date valuation of your pension from your pension provider. You need to request the “cash equivalent transfer value” or “CETV” and it is particularly important that you request this at an early stage as pension providers can sometimes take a long time to produce this information.
•  Full details of any liabilities you have. You should retain your credit card statements as you may have to produce these.
•  Your last three pay slips and your P60 for the last financial year. You will normally also have to produce copies of your Inland Revenue tax returns.

You should also provide a detailed financial history of the relationship such as asset previously owned prior to the marriage that is still owned. Any Inheritance received that has not been subsumed into the family pot.

The court document prescribed for such disclosure is known as a Form E and is often used as a vehicle for providing voluntary disclosure to the other side.

The Court Process

The First Directions Appointment

The applicant begins by filing an application on a standard form, "Form A”. The court then lists a "First Directions Appointment" ("FDA"), a preliminary court hearing, 12-16 weeks after the application is made.

At least 5 weeks before the FDA, both parties exchange details of their finances on the standard form, Form E. Various documents need to be attached to this form.

Parties then exchange and file at court questionnaires requesting any further information required and schedules of issues, chronologies and a notice stating whether or not the FDA may be treated as an "FDR" (see below).

You and your spouse, your solicitors and sometimes barristers need to attend the FDA. The district judge will decide to what extent the questionnaires should be answered and will make orders about valuations, expert evidence and the future progress of the case.

The Financial Dispute Resolution hearing

A further preliminary court appointment, called a Financial Dispute Resolution hearing ("FDR"), will then usually be listed. Seven days before the FDR, details of any proposals for settlement must be filed at court. Again, you and your spouse and your legal representatives must attend the FDR. The primary purpose of this hearing is to encourage the parties to have discussions and negotiations with the aim of reaching agreement, if possible. The district judge may indicate his or her views about certain aspects of the case and may make further orders about the progress of the case. If agreement is not reached, a final hearing will be listed, usually several weeks after the FDR and before a different judge.

Final Hearing

You and your spouse will need to attend to give evidence, together with any other witnesses, solicitors and barristers. The applicant (the person who started the financial proceedings by filing Form A) must make an open offer of settlement 14 days before the final hearing. The respondent (the other party) must make an open offer 7 days before the final hearing.

The Judge will make an order appropriate to the all the circumstances of your case, this may not necessarily be what you want and the likelihood it will not be what your spouse sought either.

For more advice on financial aspect of separation and divorce contact one of our Family Solicitors.