When you want to move on with your life post-divorce the last thing you need is unfinished business rearing its ugly head. If financial matters relating to your divorce are not fully and formally dealt with at the time, you will be living with a ticking time bomb that can detonate at any moment.
Divorce and financial matters upon a breakdown of a marriage are often interlinked. However, it comes as a surprise to many people that they are in fact entirely separate sets of proceedings. Financial issues do not automatically come into play upon the issuing of a divorce petition or upon the conclusion of a divorce when Decree Absolute is granted. It is possible therefore, for a couple to divorce and for financial matters to remain unresolved. That is the case even where the parties have discussed financial issues and agreed a division of assets, and even where that ‘agreement’ has been implemented. Situations can arise where the family home is sold, proceeds divided and people have moved on with their lives only to discover at some point in the future, that their ex-spouse has ‘live’ potential claims against them. This situation is stressful, costly and much more difficult to resolve at this later stage.
Avoiding such a nightmare scenario is simple. At the time of a divorce, financial matters should also be dealt with formally. Any agreement reached must be embodied in a court order that once approved by the Judge, becomes binding. This gives parties clarity and certainty, allowing people to concentrate on their future without fear of the past coming back to haunt them.
In order to reach a fair and reasonable settlement it is important to:
1 – Properly identify the assets
2 – Calculate their actual value
3 – Consider how they should be distributed between the parties
Identifying the assets takes place via a process known as disclosure. Each party lists all of their assets and liabilities and provides supporting documentation. This information is exchanged so that both parties and their legal representatives have a full picture of what is in the matrimonial pot.
If there are issues over property valuations, business or pension valuations, expert evidence can and should be sought. Once a value is agreed, settlement negotiations can begin.
Every case is different and will turn on its unique facts. However, the needs of the parties and any children will be the first consideration.
Once an agreement is reached, it is imperative that it is properly encapsulated into a court order known as a consent order. This must be carefully drafted by your solicitor and once signed by both parties, submitted to Court for a judge’s approval. Once approved it becomes legally binding.
Where an agreement cannot be reached or where there are concerns or issues over disclosure, court proceedings can be issued. The family court is different to other court arenas. It is designed to help facilitate discussions between the parties and to move matters towards agreement.
Should you have any concerns relating to an historical divorce or if you would like advice upon your situation if you are thinking about a divorce, please contact Lorna Tipple on 01562 820575.