How is money distributed on divorce?28 Feb 2018
If you are considering divorce and there are significant assets to be taken into account, such as property, a business, a pension, an expected inheritance, a large salary or simply money in the bank, you should speak to a family lawyer who specialises in matrimonial finances immediately.
Many people do not realise going into a marriage what the courts consider to be ‘matrimonial assets’ and the scope is usually much larger than what they think it is.
While some think getting a divorce is an expensive process, the cost of not using a lawyer that understands how assets can be divided and can ring-fence the assets most important to you can be much more.
There are a number of avenues to explore when dealing with finances on divorce, and a good family law solicitor will be able to advise you on the best course of action.
Avoiding confrontation about matrimonial finances
There are a number of methods that can be used to try and sort things out without reverting to a judge.
1. Mediation: This is a process where there is a legally qualified third-party mediator that assists and guides you towards a settlement without actually giving any legal advice. This process tends to be a lot shorter and a deal can often be accomplished in just a few sessions.
2. Dealing with things collaboratively: This is a process that has come from an American idea. There are a number of four-way meetings between you and your spouse together with your lawyers. Each meeting has an agenda and a different aspect is sorted out in each session. This process only really works when both spouses are invested in the experience.
3. Using an arbitrator: This is a fairly new way of trying to sort out family finances and is gathering momentum as an alternative to using the court. It is much quicker than the court process, but not necessarily any cheaper.
4. Dealing with things in correspondence between your solicitors: This can be a very useful tool when the issues are simple. However, on most occasions, solicitors use this process to get to the point where the parties can see what issues still divide them and then arrange a meeting with the other party’s lawyers (a roundtable meeting) to try and broker a final deal.
All of these methods involve sorting things out without the use of the court. However, if sometimes making an application to the court for a financial remedy order is the only remaining route.
Making an application for financial remedy
An application for a financial remedy can be made to the court once mediation has been attempted and been unsuccessful. There are four key steps:
1. Once an application has been made, the court then requires there to be a process of full financial disclosure. The Form E needs to be completed by both parties. This form can be found on justice.gov.uk.
2. The court lists the matter for the first directions appointment. At that hearing, the court gives directions to fill in the gaps and to gather the information needed to complete the full financial picture.
3. The matter is then listed for a financial dispute resolution hearing (FDR). At this hearing, it is hoped that all the information needed to conclude the matter has been made available. The judge will give an indication about how they feel the case should conclude and assists the parties to negotiate a settlement. Most cases that go to court settle at this stage.
4. If the case does not settle, the matter is listed for a trial and the judge gives directions for any final pieces of information that may assist another judge to make a decision. The judge you have at FDR is always different to the judge that hears the matter at trial. Most cases do not get to this stage and a good family lawyer will do everything they can to prevent this, but this does depend on the circumstances.
The family law team at Kuits are specialists in dealing with the complex process of resolving finances on divorce. If you have any questions or queries about this process, please do not hesitate to contact us.