Financial Settlements Solicitors

Our Divorce & Family team can help you with your financial settlements on divorce.

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Finance on Divorce

The issues which arise on divorce can often seem overwhelming, especially in complex, high value, or international cases. We are a leading team of family lawyers, who have extensive experience in providing clients with effective, clear, and pragmatic solutions and dealing with the financial consequences of divorce.

Even if you and your spouse have agreed how to divide your assets, you should still take advice from a specialist family lawyer about how best to record your agreement to ensure that it is legally binding and enforceable. Even if you are divorced, your ex-spouse may still be able to bring a financial claim against you, unless there is a court order dismissing those financial claims.

Financial Settlements
Sharing Pension on Divorce
Consent Orders
Avoiding Court
Our Divorce Finance Process
Sharing Inheritance
Spouse hiding assets
Spousal Maintenance

Financial Settlements

When dealing with financial issues, our starting point is effective negotiation – resolving differences practically and efficiently in a child-centred manner. We also advise on the alternatives to court proceedings, including arbitration, mediation, and collaborative law.

The family courts have a wide discretion when dealing with finances on divorce and can make a number of orders in relation to the capital, pension and income. Even if you and your partner agree a package of financial terms, outside of court proceedings, the court must consider what is “fair” in all the circumstances of the case. In some cases, fairness will lead to the equal division of the family assets.

Expert advice may be necessary in relation to assets which were acquired prior to the marriage, such as inherited wealth, pension, family businesses, and trusts. Expert advice is also necessary in relation to the duration and quantum of spousal maintenance, for which there is no formula or percentage-based approach.

Process of applying for a Financial Order
If a court application is made for a Financial Order, the court will give the parties a list of things to do. They will usually have to attend at least 2 court hearings to present and discuss with each other and the Judge their financial and other circumstances. After the second hearing, if an agreement cannot be reached, the Judge will commonly list the matter for a final hearing (“Trial”) and order the parties to file and serve a Section 25 Statement. This is a hugely important document and we will assist you in preparing it with the care and attention required to provide the Judge with all the key information required (when read in conjunction with that filed by your spouse and considered alongside your oral evidence) to make a final financial order. 

Sharing Pension on Divorce

The general rule is that pensions that have been accrued during a marriage, to include any period of pre-marital cohabitation, should be shared equally. However, that is only a guide and it may often be appropriate not to share the pensions equally.

In some cases, the parties may prefer not to share the pensions and instead, for one party to receive a greater share of the capital in lieu of a pension investment. For example, it may suit the family for one party to retain the family home and for the other party to retain their pension instead of receiving a share in the family home.

We can advise on what outcome may be more suitable, financially and otherwise.

Pension Sharing on Divorce

Consent Orders

If you and your spouse have agreed the terms of financial settlement, you should have it recorded in a consent order. A consent order is a document which formally records the terms of your agreement, which is then sent to the court for a judge to approve.

The judge will consider your financial and personal circumstances, and the agreement you have reached, and determine whether it is fair. If so, then the order will be approved. Once a Judge has approved the terms of a consent order and you have received your final order of divorce, the terms of the order become legally binding and enforceable.

Avoiding Court

You can use any alternative means of dispute resolution to come to an agreement which means you can reach a settlement without having to step inside a courtroom. We always advise that any such agreement is recorded in a consent order and approved by the court so that it become legally binding.

We appreciate that distributing financial assets on divorce is not a “one size fits all” approach. Sometimes court proceedings will be necessary, but when dealing with financial issues our starting point is effective negotiation – resolving differences practically and efficiently in a child-centred manner. 

We also advise on the alternatives to court proceedings, including arbitration, mediation, and collaborative law.

Our Divorce Finance Process

We will meet with you and run through your assets and explain to you what further financial disclosure you might need to be able to make an informed decision about settlement. For example, this might include property valuations where a property value is in dispute; an independent accountancy report if there are business assets which are disputed or a pension sharing report to understand the pensions and how they might be divided between you. We will also explain what factors the court will take into consideration if the court was being asked to make a decision and the various orders that can be made.

We will also run through the various options available to you and your spouse/civil partner to reach a financial settlement. Insofar as possible, we will work with you to negotiate a financial settlement with your spouse or their solicitor without the need to attend court. We take a pragmatic, realistic and commercial approach to settlement for all of our clients. Where court proceedings become necessary, however, our team are able to advise effectively on the strategy to ensure a fair outcome for you. We can also discuss with you alternative options to dispute resolution.

Sharing Inheritance

Many clients contemplating divorce ask whether they will have to share a current or future inheritance. The answer is that it depends.

Monies or assets inherited or gifted before or during a marriage, are not automatically excluded from the matrimonial pot. In other words, they are not automatically ring-fenced and may have to be shared when a couple divorce. Whether or not you will have to share your inheritance when you divorce depends on the specific circumstances of your case.

Whilst most divorces do not end up in court, in order to advise you as to an appropriate settlement, your solicitor will need to look at what approach the court may take if it were to make a decision for you. Their advice will be very specific to your individual circumstances, and there is no ‘one size fits all’ approach.

What can I do to protect my inheritance from a claim by my spouse?
If you would like to protect an inheritance, you may wish to consider entering into a nuptial agreement (a pre-nuptial agreement and/or a post-nuptial agreement). This would not prevent the court from making an order on divorce that your inheritance be shared (where needs required it) but would strengthen your case against sharing.

If you do not want to share your inherited capital, it will be crucial that you do not mingle it with matrimonial assets. For example, do not use it to reduce the mortgage on a jointly owned property or to pay off joint debt. Keep it separate. And if you do invest it in joint or otherwise matrimonial assets, obtain written agreement from your spouse that they acknowledge that they have no interest in the inheritance. However, even with such an agreement, the court will retain the ultimate decision-making power as to what is to become of it on divorce.

If you expect to inherit money or assets in the future, you may also wish to consider appropriate trust planning.

Spouse hiding assets

We are experienced in complex family law litigation and have significant expertise in dealing with cases involving complex pensions, businesses, and high value family or business assets.

You may be worried that your spouse has not disclosed, or will not disclose, all assets or will try to undervalue or dissipate them to frustrate your financial claims. If necessary, we can apply to the court to reverse such transactions and obtain freezing and disclosure orders, ensuring your spouse makes a truthful and honest presentations of their financial circumstances.

Spousal Maintenance

Spousal maintenance is financial support paid by one spouse to the other. Spousal maintenance may be appropriate when one spousal has a lower income or limited earning capacity.

It is important to understand that spousal maintenance is different from child maintenance.

Whether or not spousal maintenance will be appropriate depends on the specific circumstances of your case. We would recommend that you seek expert advice from a family lawyer who will be able to provide you with tailored advice specific to your situation.


What is a Section 25 Statement?

The law is written both in statute and case law. A statute is an Act of Parliament. Case law is essentially law that has been made by Judges in Court at final hearings and is effectively a written report of their decision. The statute applicable to divorce and financial matters is called The Matrimonial causes Act 1973. Section 25 of that statute details all the factors a court must take into consideration when deciding a financial outcome on divorce:

  1. the income, earning capacity, property and other financial resources which each party has or is likely to have in the foreseeable future, including in the case of earning capacity any increase in that capacity which it would in the opinion of the Court be reasonable to expect either party to take steps to acquire
  2. the parties’ respective financial needs, obligations and responsibilities now and in the foreseeable future
  3. the standard of living the parties’ have enjoyed
  4. the parties’ respective ages and the duration of the marriage
  5. any physical or mental disability of either party
  6. the contributions which each party has made or is likely to make in the foreseeable future
  7. the conduct of each party, if that conduct is such that it would be in the opinion of the Court be inequitable to disregard

Do I have to share my pension?

The sharing principle (i.e., the equal sharing of matrimonial assets) attaches to pensions. This means that both parties are typically entitled to an equal share of pension assets unless there are compelling circumstances to depart from equality.

The outcome will depend on what has been agreed between both parties and/or ordered by the court.

If you would prefer not to share your pension assets with your former spouse, you may be able to consider pension offsetting which means that instead of giving up a portion of your pension, you may agree to offset the value against another asset, for example, the family home. Specific advice will be needed as to whether this would be an appropriate outcome.

Will divorce affect my credit rating?

Divorce and separation often focus on the division of assets; however, many couples must also decide what happens to their debt.

Whilst changing the legal status of your relationship does not affect your credit score directly, it is likely that during your relationship, you may have taken out joint credit such as a mortgage, a bank account with an overdraft facility, or a loan. If this is the case, your credit ratings may affect each other.

If you leave these accounts open and don’t remove your ex-partner, then their credit score may be considered alongside yours when you apply for credit in the future.

What will happen if my divorce goes to court?

Once an application to the court has been made, the court will write to you with a timetable, detailing a number of dates on which certain deadlines must be met. The court will also give you a date on which the first hearing will take place. Prior to this hearing, the parties are required to exchange Forms E with supporting documents.

The court process starts with a First Directions Appointment (FDA). This hearing is administrative in nature, and the court will make an order setting out a series of directions to progress the case. Such directions may require that the parties jointly obtain a valuation of the family home, or that the parties obtain a pension report.

If the matter does not settle at the FDA hearing, the court will list a further hearing called a Financial Dispute Resolution (FDR). At this hearing, the court encourages settlement proposals. After considering the papers, the judge will give an indication of how they would determine the case if they were sitting as the trial judge. Most cases resolve at or shortly after the FDR.

If the matter does not conclude at the FDR, the court will list a Final Hearing. At the end of the final hearing, the judge will deliver their judgement, which forms the basis of a financial order. In reaching their conclusion, the judge will consider various factors, which include: 

  1. The welfare of any children under 18
  2. The income, capital assets and financial needs of both parties;
  3. The standard of living enjoyed during the marriage
  4. The respective ages of the parties and the length of their marriage.

How will I pay my for my divorce?

Legal Aid (We don’t do Legal Aid)

Legal aid is no longer available to pay the legal costs of divorce or dissolution unless:

  • You are using it to pay for mediation
  • You have experienced domestic abuse in the last 5 years
  •  You are at risk of homelessness

Please note that at Herrington Carmichael we do not offer Legal Aid.

Costs orders
The general rule in family court proceedings is that each party pays their own legal costs.

The above said, in some cases, one party may agree to pay the other’s legal fees – without the court ordering them to do so – just to get the finances settled quickly.

Loans from family or friends
You may be able to borrow from family or friends to pay your legal fees. This may be cheaper and much easier than borrowing from a bank, building society or other loan provider, however, we would recommend that you obtain a formal agreement, or the court might not take the loan into account when considering how to divide the finances.

Commercial borrowing
You could consider placing your legal fees on one or more credit cards or taking out a commercial loan.

You may also be able to apply for a litigation loan from a specialist loan provider. The lender will assess the prospects of your case and the likely level of your settlement. If their lending criteria is met, the lender will likely release the funds directly to your solicitor to cover legal fees as and when they are due. When your divorce is finalised, the money to pay back the loan is typically taken from your financial settlement, with the balance of your settlement released to you. 

What is a Form E?

Form E is a document used in divorce proceedings which sets out the financial and personal circumstances of the parties. Its main purpose is to facilitate the disclosure of financial disclosure.

The completion of a Form E is mandatory in financial remedy proceedings, and both parties must exchange their completed forms with each other and submit them to the court. Alongside Form E, individuals are expected to attach supporting financial documents such as `bank statements, tax returns, and property valuations.

Whilst it is possible to fill the Form E out yourself, we would recommend that you seek the assistance of a family lawyer to ensure it is completed accurately, which will likely speed up the disclosure process.

Who pays school fees after divorce?

Disputes about school fees are common when couples whose children are in private education go their separate ways.

In many cases, parents share the financial burden of their children’s education. The allocation of school fee payments can be negotiated during financial proceedings and outlined within a financial consent order.

In some cases, the court can make a school fees order which records how the school fees should be dealt with, for example, which parent should pay the fees and for how long.

Will I be compensated for relationship generated disadvantage?

Unlike some jurisdictions, the family court in England and Wales does not specifically entitle one spouse to compensation for sacrificing their career or opportunities during the marriage. Instead, financial settlements are determined based on factors like each parties’ financial needs and the welfare of any children.

If you believe you have suffered significant economic disadvantage due to the marriage, it’s crucial to seek legal advice to understand your rights and potential outcomes in your specific case.

What is the “sharing principle”?

The starting point for dividing assets on divorce is equality, this is called the “sharing principle”.

There has to be a good reason to depart from equality, and any departure must be limited to what is needed in order to achieve fairness.

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