What Is A Financial Settlement?
A Financial Settlement covers the division of assets and debts, plus any ongoing financial commitments, such as the payment of spousal maintenance, following the breakdown of a marriage.
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A divorce financial settlement is the financial arrangements made between you and your ex-spouse following the breakdown of your marriage. It covers the division of your assets and debts, plus any ongoing financial commitments, such as the payment of spousal maintenance.
You can either decide on a financial settlement between yourselves, or if you cannot agree, you can ask the Court to decide instead.
The process of a divorce is actually separated into three sections. The first, the actual divorce, is the proceedings that are required to bring the marriage to a conclusion.
The second part of a divorce is the financial settlement of the marriage – generally known as financial relief. This is where most issues arise as the parties seek to separate the assets and the adjustment of monies, pensions and financial provisions between them.
The third part of a divorce relates to child care arrangements. This covers how the children are to be maintained and with whom they are going to live.
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Agreeing on the financial settlement
In any separation, there is a desire to avoid contested and potentially expensive proceedings. Because of this, the parties are required to investigate all reasonable attempts to mediate and resolve issues between themselves.
If you cannot agree on the financial settlement, our divorce solicitors can help you. The chances are that you and your spouse own a property, a joint account and share some level of debt (such as a mortgage). One may be financially reliant on the other. These are all issues we look to address in a financial settlement. We can advise what a fair and reasonable financial settlement would look like in your case, working to help you achieve a mutually agreeable resolution.
If you cannot agree – and any attempts at mediation are unsuccessful – then your final option is to take the matter to Court. The Court’s first priority will be the welfare of any child of the family under the age of 18. Following that, the Court will look to make a financial settlement that meets the reasonable needs of you and your spouse.
The Court will take various factors into consideration when deciding your financial settlement, including:
- The income, earning capacity, property and other financial resources which each spouse has or is likely to have in the foreseeable future. This includes any increase in earning capacity which it would be, in the opinion of the Court, reasonable to expect a person to take steps to acquire.
- The financial needs, obligations and responsibilities which each spouse has or is likely to have in the foreseeable future.
- The standard of living enjoyed by the family before the breakdown of the
- The ages of each spouse and the duration of the marriage.
- Any physical or mental disability of each spouse.
- The contributions which each spouse has made or is likely to make in the foreseeable future to the wealth of the family. This includes any contribution by looking after the home or caring for the family.
- The conduct of each spouse, if that conduct is such that it would be in the opinion of the Court inequitable to disregard.
- The value of any benefits that one spouse will lose because of the divorce (most usually pension provisions).
Child maintenance provisions
In most cases the Court no longer has power to make Orders for child maintenance. An application to the Child Maintenance Service has to be made for child maintenance to be assessed.
Speak to our divorce solicitors
If you are in a situation where you need some advice on a financial settlement, please feel free to contact one of our lawyers for a free, no obligation enquiry.