Resolving matrimonial Financial & Property matters within a divorce can often be far more complex than the divorce itself. For this reason financial matters are always dealt with separately from issues relating to children to help avoid any disagreements over finances spilling over and affecting arrangements for the children. It is therefore good practice to deal with these issues in separate letters and to open a separate file to deal with financial matters.
The main piece of legislation is the Matrimonial Causes Act 1973. This Act sets out the factors that are to be taken into account when considering what is fair and reasonable. These factors are always taken into account whether financial issues are resolved by agreement, with the assistance of mediation or ultimately decided by the Court.
There are 3 ways of resolving the issue of matrimonial finances:
As every case is different, the law in this area is flexible. The Court’s aim is to achieve fairness based on the circumstances of each individual case. Whether being asked to make an Order or to approve an agreement reached between the parties, the Court’s aim is to achieve fairness, and wherever possible to meet the parties’ respective needs. The Court’s decision will based on the circumstances of each individual case. The Court can make orders under the broad headings of capital, income and pensions.
In some cases it may be appropriate to make a “clean break” order which will end any financial obligation either party may have to the other. This is often the case where parties are young and have a good chance of making a new life. In other cases, some form of maintenance (excluding maintenance for children) may be suitable, which will give an ongoing obligation and therefore a clean break may not be possible. Even if a “clean break order” is achieved, maintenance will still be payable for any dependent children.
In most cases the largest asset of the marriage is the home. In some cases the family home can be sold and the proceeds divided (not necessarily equally) between the parties. In other cases one party may be able to “buy out” the other, or may be transferred to one spouse with the other receiving a larger portion of other assets.
Wherever there are children the Court’s priority will be to provide them with a “suitable” home, but this does not automatically mean they will stay in the family home. In some cases, one person could stay in the family home with the other keeping an interest in that property until it is sold, perhaps when the youngest child reaches 18. It is important to note that this does not happen very often.
The law also now provides for pension funds to be shared on divorce, but this may not be appropriate in all cases. The law surrounding this area is complex, and in some cases specialist financial advice may be required. It is important to note that a divorce can be concluded even if financial issues remain unresolved. There may however be tactical reasons to delay concluding the divorce until financial matters are dealt with.