Sorting out your money in Divorce and dissolution of Civil Partnership

Sorting out financial arrangements after separation can be far more complicated than divorce or dissolution of a civil partnership. Because the court has a wide discretion in applying the law, it can be better to agree your own arrangements where possible and avoid the delay and uncertainty of a court hearing. Mediation can often help couples reach agreement on key issues whilst solicitors can advise on the fairness of any agreement and incorporate the same into a consent order which the court can make legally binding should the couple so desire. The starting point must always be a full and honest disclosure of each party’s financial and personal circumstances.

The settling of financial matters on divorce or dissolution of civil partnership is called “ancillary relief”. Couples can agree and courts can make a range of orders for cash payments, transfer of property or other assets, maintenance and pension sharing. Sometimes financial arrangements can be settled through a ‘clean break” which means a lump sum payment and/or property transfer order and no ongoing maintenance. A clean break order ends the financial relationship between you and your partner.

Often, however, there may not be enough assets for a clean break and for that or for some other reason regular maintenance payments from one person to the other may be needed either for a fixed period of time or until remarriage or death. Child support will be payable for any dependent children regardless of any clean break order being made.

Often, a family’s main asset is the family home;

  • Given that the needs of the children are the first consideration, it will be important to make sure that a suitable home is maintained for them.
  • It may be that the family home can be sold with the proceeds divided between the couple or the property could be transferred to one person with the other perhaps receiving a greater share of other assets.
  • A less common approach could allow one person to stay in the house with the other keeping an interest in the property, receiving their share at a later date. This might be when the youngest child has finished full time education.

A pension fund is often the most important and valuable asset that can be shared on divorce. Pension sharing will not be appropriate in all cases and, where it is an option, the fund will not always be divided equally. This is a complex area and specialist as well as legal advice is often needed on how sharing can be achieved in each individual set of circumstances.

If the parties can’t agree then what guidelines will the court take into account? The court will deal with all the family assets and the overall outcome must be fair and reasonable to both parties. The court must consider first and foremost the welfare of the children and where they are to live

  • The income, earning capacity, property and other financial resources which each of the parties has or is likely to have in the foreseeable future, including in the case of earning capacity any increase in that earning capacity which it would, in the opinion of the court, be reasonable to expect a party to the marriage to take steps to acquire;
  • The financial needs, obligations, and responsibilities which each of the parties has or is likely to have in the foreseeable future;
  • The standard of living enjoyed by the family before the breakdown of the marriage;
  • The age of each party to the marriage and the duration of the marriage;
  • Any physical or mental disability of either of the parties to the marriage;
  • The contributions which each of the parties has made or is likely in the foreseeable future to make to the welfare of the family, including any contribution by looking after the home or caring for the family;
  • The conduct of each of the parties if that conduct is such that it would in the opinion of the court be inequitable to disregard it;
  • In the case of proceedings for divorce or nullity of marriage, the value to each of the parties to the marriage of any benefit (for example, a pension) which, by reason of the dissolution or annulment of the marriage, that party will lose the chance of acquiring.

The provisions for financial relief are similar in the Civil Partnership Act 2004.

For further information, read about the court procedures, timescales and prescribed forms for financial orders and financial remedies. 

The contents of this article are general principles only.

The Courts recognise that parents are generally best placed to know what is in their children's interests and are encouraging parents to work this out together, with the assistance of a qualified mediator.  They acknowledge that mediation is not suitable in every case but for the vast majority it represents an opportunity for you to find a solution that fits best with your family’s circumstances.

Since April 2011, anyone applying to the Courts for assistance in resolving a dispute about parenting or finances following relationship breakdown has had to comply with the Pre-Application Protocol. This requires you to attend a meeting to learn about mediation – a Mediation Information and Assessment meeting or MIAM.

Legal aid is no longer widely available for divorce proceedings although if you are seeing a mediator and are legally aided you will be entitled to Help with Mediation if you instruct a solicitor who undertakes Family Legal Aid work.

National Family Mediation (NFM) is a network of professional family mediation providers based in England and Wales that work with families affected by relational breakdown. All providers aim to help clients achieve an outcome that works best for them and their family

If you would like to get more information about mediation and/or make an appointment you can contact NFM direct on 0300 4000 636 or you can also contact a NFM family mediation provider in your area.

All services also take referrals from Solicitors, the court or other helping / support agencies.


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