Options for Settling Matrimonial Finances
How can we help?
There are several ways in which you can reach a settlement in respect of your family’s financial affairs as part of a divorce or separation and we can help you understand which one may be appropriate for you.
The right option depends on your circumstances. We can help you decide which option is most appropriate.
Options for settling Matrimonial Finances
The Kitchen Table / DIY option
If you and your spouse have got a very good understanding of each other’s finances and if you are on good terms then you could sit around a kitchen table to work out an agreement that suits you both. Once you have reached an agreement one of you should approach a family solicitor to advise you on the contents and prepare the document to be drafted into a consent order which can be submitted to be approved by a family court judge.
It is important that you carry out the right form of disclosure when going through this process because otherwise it may be difficult for a lawyer to give you advice on whether the terms that you hope to reach are reasonable or appropriate.
Divorce can bring emotional upheaval and it may be that you are not quite ready to sit and discuss matters in an unsupported manner. If that is the case; you may choose to explore mediation. A mediator would try and help you and your spouse reach some common ground so that you can reach an agreement or a “memorandum of understanding”.
Discussions in mediation do not bind you. You will be advised by your mediator to take the proposed agreement to a family lawyer so that you can obtain independent legal advice on the proposed terms and so that a lawyer acting for one of you can draft the agreement into a consent order which can be submitted for approval by a Family Court Judge.
There are circumstances where mediation is not appropriate, for example if there has been domestic violence or if there is urgency because resources may be at risk.
Lawyer led negotiation
It may be that you have tried mediation or informal discussions but have become frustrated with your spouse’s response to the process either because they are not engaging or because they are not co-operating with the process. You may not be able to sit with your spouse because they have domineered you or accused you of domineering them. In that case lawyer led negotiation maybe an option for you.
Your family lawyer will advise you how to obtain the disclosure which you need in order to work out what resources are available and how they can take care of your housing and income needs after the divorce. Your lawyer will advise you in respect of the disclosure process, the valuation process, focusing on the relevant issues and negotiating with your spouse or their lawyer in order to reach an agreement that is in your best interests.
Once an agreement has been reached your lawyer will draft a consent order on your behalf in order to ask the family court to approve and seal the agreement so that you have a binding and enforceable agreement. You need to know what will happen and when.
The Financial Remedies Court within the Family Court
Going to Court. If none of the options above are appropriate or if an issue has arisen that can not be resolved by an alternative method of dispute resolution then you may need to issue an application for (what is called) a financial remedy with the family court.
The process is then managed by the Financial Remedies Court which is a specialist part of the Family Court. Your lawyer will help you to make an application or to respond to an application which has been made. The court will issue a timetable which will enable the court to manage the case all the way to a final hearing.
The court will need to work out what will need to happen by what date to enable a family court judge to make a decision on how to divide your finances.
You would benefit from legal assistance throughout this process as your lawyer will advise you in respect of obtaining the appropriate directions to manage your case towards a point where you can reach an agreement with your spouse.
A final hearing is rare but it is the point where the Judge will make a decision about how to divide the resources; up until the Final Hearing you and your spouse can reach an agreement.
Arbitration is very similar to the court process albeit a process in which you and your spouse select your arbitrator. Arbitration can be used for discrete issues (whether a pension earned prior to the marriage should be ringfenced) or to resolve all of the matrimonial issues in dispute (there are exceptions). Your lawyer will help you navigate the process and manage your case so it is ready to be considered by the arbitrator.
The Family Court endorse the use of arbitration. Arbitration can be an extremely helpful, efficient, private method of resolving your dispute and which may enable you to reach a financial settlement. It can avoid the delays which are in the family court service and can insure you have a professional arbitrator who will be able to spend the time required to dedicate to your family’s particular circumstances.
Early Neutral Evaluation
Early Neutral Evaluation is a process which is designed to obtain an early evaluation of the case from a neutral expert who may be a barrister or a retired Judge that is specifically chosen and paid to consider the issues.
It is usual to consider this at an early stage and can be based on the joint instruction of both parties or it can be requested by one party. Like Arbitration you can ask that a specific issue is evaluated in isolation or you can ask for all issues to be considered. The evaluation meeting can be scheduled your convenience rather than the Courts and you are likely to have considerably more time with your judge than the court service could provide.
It is speedy and confidential and can give you an understanding of how a Judge may decide your case which can assist in early settlement discussions.
The outcome is advisory and it does not bind the parties but can help couples reach a settlement at an early stage which can avoid court proceedings.
Private Financial Dispute Resolution (FDR)
If Court proceedings are in progress then you may consider stepping outside the court process for a Private Financial Dispute Resolution Meeting. Although the Court will direct a Financial Dispute Resolution to take place there is an element of uncertainty as to the time table and the time which a Judge will have to consider the facts of any particular case. Some people prefer to have a Private FDR so that they can both choose the “Judge”, the date and the location and so that they can have comfort in the understanding that their Judge will have had adequate time to become familiar with all the facts which are relevant.
Both parties jointly instruct a specialist family law practitioner to act as the Judge in a private setting away from court in a location which is suitable for all parties for example at a barrister’s chambers.
The benefits are that:
- you can reach an agreement about which Judge will be appointed meaning that you know you will have a specialist practitioner with experience relevant to the issues in your case
- You can have a Judge who is able to allocate the appropriate resources (time) to your case
- There is a high success rate with FDRs, diffuse hostilities and deal with matter more efficiently
At the conclusion of the Private FDR you can reach heads of agreement, which the Judge can approve in order for a consent order to be sealed by a Family Court.
Your questions answered…
Wouldn’t it be much easier for me and my ex to reach an agreement and just shake hands on the terms rather than going to Court?
Although reaching an agreement in that way may appear to be the quickest and cheapest way of resolving the issue it can be unwise to do so. Apart from the obvious question about the fairness or reasonableness of the agreement which you may reach there are other pitfalls with this option. It is going to be hard to enforce any terms which are not complied with and if one party loses their share in an unwise investment then they would be able to ask the court for a financial remedy.
With the Arbitration and Private FDR’s you mention that you can choose and pay for a Judge of your choice. Is this allowed?
The process is highly regulated and the fact that you are paying for the Judge does not allow for any impropriety. We do not mean that one person would have the Judge in their pocket. Any financial practitioner that would be instructed would be chosen by both parties and they would have a duty to act fairly to both of them. If you have a specific issue that for example relates to complex Trust issues you would benefit from a practitioner who has particular expertise in this area. Your lawyer can help you choose from an appropriate pool of specialists that would be proposed to your spouse.
My wife and I are separating but do not want to divorce for religious reasons can we ask the Court to decide how to organise a financial settlement?
You can only ask the Court for certain remedies if neither of you have started divorce proceedings (for example a wife may make an application for financial support from her husband if she is unable to afford to pay her outgoings). If you want to reach a point where a Court can assist you reach a settlement or approve a settlement that you want to reach then divorce proceedings must be started.
My husband and I are hoping to reach an agreement through Mediation. Do we need to do anything else?
You will need to have the proposed agreement (what is properly described as a memorandum of understanding) drafted into a document which will then be submitted by a lawyer to the Family Court. Your mediator will explain this to you and explain that you should obtain advice on the proposed terms.
Aaron O’Malley, Senior Family Law Solicitor, explains how you and your spouse can organise a financial settlement on divorce.
Click the button below to find out more about Aaron and how he can help you.
Family Law Specialists
- All departments
- Agricultural Law
- Co Co - Employee Share Schemes
- Co Co - Recovery & Insolvency
- Co Co - Restructuring
- Co Co Corporate Governance
- Co Co Corporate lending
- Co Co Financial Services
- Co Co Franchising
- Co Co GDPR
- Co Co in-house legal support
- Co Co International Contracts
- Co Co M&A's
- Co Co MBOs & MBIs
- Co Co Partnership and LLPs
- Co Co Regulatory, Compliance & Competition
- Co Co Shareholders Agreements
- Co Co Terms and Conditions
- Co Co- Intellectual Property
- CoCo - Banking and Finance
- CoCo - New Businsess
- CoCo Competition Law
- CoCo Consumer Law
- CoCo Data Protection - Marketing
- CoCo Data, IT & Technology
- Commercial Law
- Commercial Property
- Corporate & Commercial
- Corporate Law
- Debt Recovery
- Dispute Resolution
- Disputes - Business
- Disputes - Declarations of trust
- Disputes - Probate and inheritance
- Disputes - Professional negligence
- Disputes - Restrictive Covenants
- Disputes - Shareholders & Partnership
- Disputes - Tenants in Residential Property
- Disputes - Wills, trusts & probate disputes
- Disputes and Small Claims
- Disputes Construction
- Disputes with Co-owners
- Employee - Termination
- Employer - Termination
- Employment - Business protection
- Employment - Collective consultations
- Employment - Contracts, services, consultancy
- Employment - Employee benefits
- Employment - Employee Procedures
- Employment - Equality, discrimination and harassment
- Employment - Family Friendly Rights
- Employment - GDPR and Data Protection
- Employment - Post employment obligations
- Employment - Redundancy & Reorganisation
- Employment - Settlement Agreements
- Employment - Tribunal Claims
- Employment - TUPE
- Employment - Wages, holiday and sick pay
- Employment - Workers rights
- Employment Tribunal claims
- Estate Administration
- Expat Legal Services
- Family Law
- Financial Services
- Help to Buy
- Immigration law
- International Legal Services
- Key Property Contacts
- Land and Property Disputes
- Land, development and construction
- Lasting Powers of Attorney
- Licensing Law
- Money, Tax and Inheritance
- New Build Conveyancing
- Private Wealth and Inheritance
- Professional Negligence
- Property Finance
- Property Law
- Residential Property
- Residential Property - Completions
- Residential Property - Shared Ownership
- Trainee Solicitor
- Wills, Trusts & Probate
Latest News & Insights
When couples begin to think about taking the next step in their relationship, they will often...
Many clients contemplating divorce ask whether they will have to share a current or future...
With a little over a month left until Christmas, now is the time to try and agree how your...
Award winning legal advice
Herrington Carmichael offers legal advice to UK and International businesses as well as individuals and families. Rated as a ‘Leading Firm 2024’ by the legal directory Legal 500 and listed in The Times ‘Best Law Firms 2023 & 2024’. Herrington Carmichael has offices in London, Farnborough, Reading, and Ascot.