The breakdown of a relationship is very stressful. There are many difficult decisions that a separating couple must take and various arrangements that need to be made.
Everybody’s situation is different, and no set of circumstances is the same. How complex and protracted a separation might be depends on various factors. These can include whether you are married or in a civil partnership, have a pre-nuptial agreement, what assets you own and whether you have children.
However, there is one constant behind most ‘messy’ separations: money.
In this blog, our Family Law team looks at the importance of using a solicitor when separating and considers the crucial role they play in protecting your finances upon divorce or dissolution of a civil partnership.
What happens to a couple’s finances and assets when they divorce?
When you get divorced or dissolve a civil partnership, you need to decide on a financial settlement that sees you divide your possessions, money, and other assets between you and your ex-partner in a fair way.
However, even in the most amicable of break-ups, and for the most reasonable of partners, discussions about money can lead to friction and deciding on what constitutes a ‘fair’ division of assets is not always easy.
What is financial disclosure?
The first step separating couples must take when deciding on a financial settlement is for each to provide full and frank financial disclosure.
Financial disclosure involves each partner providing information about their assets, finances and liabilities, which is then compiled in a financial statement (‘Form E’).
Completing Form E is good practice for all separating couples as the information provides an accurate picture of assets and wealth and is a legal requirement for cases that go to court.
Form E requires you to provide information about the following:
- Income.
- Money in bank accounts and savings accounts.
- Property.
- Mortgages.
- Endowments and insurance.
- Shares and investments.
- Cars.
- Pensions.
- Other assets.
- Any liabilities.
Form E is a complex document and needs to be completed carefully. All the information provided also needs to be backed up with relevant documentation, and it can be a laborious and time-consuming process.
An experienced family solicitor can help. We are very familiar with the process involved in financial disclosure and can ensure the appropriate forms are filled out correctly and on time. A divorce solicitor is also skilled at providing more context to your disclosure to accurately reflect your position.
What is a financial settlement?
Once each party has disclosed their assets, they must agree on a fair financial settlement.
Knowing what is ‘fair’ is often extremely difficult, particularly when contributions during a marriage or civil partnership have been unequal or one individual’s financial position is weaker than the other’s.
We understand that conversations about money with an ex-spouse can be extremely stressful. However, a divorce solicitor can help you in several ways. These include:
- Negotiating directly with your ex-partner.
- Negotiating on your behalf with your ex-partner’s lawyers.
- Recommending mediation or arbitration.
- Advising on whether a proposed settlement is fair.
- Representing you in court.
An experienced solicitor will also be able to recognise any potential ‘red flags’ at the financial disclosure stage and will look for any evidence of a partner attempting to hide assets. If necessary, solicitors can appoint forensic accountants to scrutinise bank statements and identify any discrepancies.
There are also strict rules about transferring money or assets before a divorce. A solicitor can advise you on the best timings for the distribution of your assets, which can also affect how much tax you must pay.
What is a financial consent order?
Once you and your ex-partner have agreed on the division of your assets, your solicitor will draft a financial consent order and submit it to the court for approval. A financial consent order details how assets are going to be divided and makes provision for any ongoing maintenance. It also prohibits either person from making a financial claim against the other in the future.
Even if you don’t have any assets to divide, it is crucial that separating couples end their financial commitment to each other. This can be done by way of a clean break order, which is a form of consent order that specifies neither person can make a financial claim against the other in the future. Without one, an ex-partner could claim the proceeds of an inheritance, or a lottery win, even years after getting divorced.
What if we are separating but aren’t married or in a civil partnership?
There is no such thing as ‘common law’ marriage, and financial arrangements for separating couples who are not married or in a civil partnership can be extremely complex.
If you find yourself in this position, we strongly encourage you to get in touch with our team at the earliest opportunity to discuss your case.
Financial Settlement Solicitors Near Me
Our specialist Family Law team at Larcomes Solicitors has extensive experience assisting separating couples to reach agreement over financial arrangements and has helped numerous different clients with their financial needs on separation and divorce.
Regardless of the complexity of your family law matter or dispute, our solicitors in Portsmouth and Waterlooville have the knowledge and expertise to help.
We will explain all the options available to you, ensure you are aware of the costs involved, and support you through every step of the process to ensure the best outcome for you.
To speak to one of our experienced family lawyers, please call 023 9244 8100. Alternatively, you can make an online enquiry.
For more information about our Family Law team, please click here.
Please note that this article is not intended as legal or professional advice. It is for general guidance only, and updates to the law may have changed since it was published.