Financial Issues on Divorce

The English Courts’ Approach to Financial Issues on Divorce

There are no rules in English law that proscribe a mathematical formula on how to divide assets or how much maintenance a spouse has to pay to the other. The court has a discretion on what to do, but it is guided by a number of factors:

• It has to give first consideration to the welfare of any children under 18
• It has to consider all the circumstances of the case
• It has to look at whether a clean break without ongoing maintenance would be appropriate
• The outcome should be fair and in a lot of cases this means equality

The law sets out a list of items that the court needs to take into account as part of all the circumstances of the case. These are just examples and this is not a complete list.

Financial means: the income, earning capacity, property and other financial resources which each spouse has or is likely to have in the foreseeable future including, in the case of earning capacity, any reasonable possible increase in it. So it is no good to say for someone that they do not work and earn money if there is no reason why they should not do so.

Financial needs including obligations and responsibilities which each spouse has or is likely to have in the foreseeable future.

Standard of living enjoyed by the family before the breakdown of the marriage. So the budget for food, holidays and leisure activities in cases where maintenance is payable will vary depending on the standard of living previously enjoyed.

Ages of each spouse and duration of the marriage: In most cases, if the marriage is a long marriage, the court tends to look less on what the parties contributed or what the situation was at the day of the wedding and more towards an equal division of assets.

Disability: any physical or mental disability of each spouse.

Contributions which each spouse has made or is likely to make in the foreseeable future to the welfare of the family, including any contribution by looking after the home or caring for the family. This interrelates with the duration of the marriage. For example the court will not put much weight on who paid the deposit to the house of £1,000 in 1971 after 30 years of marriage when the couple brought up two children, went through career development and a change of jobs.

Conduct: This can only be taken into account if “it would in the opinion of the Court be inequitable to disregard.” It is rare that a court puts great weight on this unless it is gross financial misconduct, such as siphoning off of funds on a large scale, or financial deception, especially in the course of the financial negotiation and proceedings in connection with the divorce. An affair is generally not conduct.

Pensions: dependants’ pensions which stop on divorce.
Both spouses must provide full disclosure of their financial position so that a proper financial arrangement can be made.

Both spouses should obtain independent advice from a specialist English family lawyer to ensure that they know where the court order may lie in their case. Even if the parties have reached an agreement, they should discuss this with a family lawyer to ensure that there are no pitfalls, such as that one party takes on a tax liability that will only become apparent at a later stage.

Even if an agreement is reached, the court should approve the agreement in the form of a consent order so that there can be no come-back if one party changes their mind or circumstances change. There is no provision in English law for binding agreements between parties and although courts will put greater or lesser weight on an agreement that the parties have reached depending on the circumstances, it is still better to ask the court to approve a consent order.

For orders the court can make, please see Financial Orders on Divorce.

For advice on your specific circumstances contact Alternative Family Law to consult Andrea Woelke.

Financial Issues on Divorce Leaflet to Print

Links

Divorce

Financial Orders on Divorce

Pre-nuptial and Pre-registration Agreements

Court Service Forms:

Form A to start a financial claim on divorce

Form E: Financial Disclosure Statement

Form P: Pension Enquiry Form

Statement of Information for a Consent Order

Other Forms (chose Work Type: "Divorce/Civil Partnership Dissolution")

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© Andrea Woelke 2008