Financial settlement in divorces
A financial settlement is an agreement reached between couples who are going through a divorce. The couple agrees how to separate joint assets, property, money and any other things which they own together.
If you require a mediator or family law solicitor to help you settle your finances after the breakdown of a relationship, you should speak to a specialist to obtain the result you want.
Types of financial order
- Maintenance: Whereby one spouse makes periodical payments to the other
- Lump sum order: A one-off payment from one spouse to the other
- Sale of property: An order for the matrimonial home or another property to sell now or at a later date, with the proceeds divided
- Property transfer: The court can order for a house to be transferred to one spouse
- Pension sharing order: Dividing the pension, so that a proportion of the pension is transferred to a fund for the other spouse
A financial settlement can be reached in a number of ways, of which two are explained:
Voluntary agreement without use of lawyers/courts
A divorcing couple could mutually agree on a financial settlement without the use of lawyers and courts. Whilst this is the cheapest option to choose it does have its risks.
For example, the agreement may not be legally binding on both parties. If this is the case, and one party breaches the agreement, the other party may be left without a remedy.
For further information, see our page on family law mediation.
Reaching an agreement through the use of lawyers/courts
This is by far the safest option to choose. Lawyers can help couples who are going through a divorce reach a financial settlement. They can help to ensure that the all assets and money is distributed in the most fair and equitable manner.
Lawyers can also help with the drafting of the necessary agreements in order to ensure everything is represented accurately in the financial settlement agreement.
Once the couple has reached an agreement, it can be made into a ‘consent order’ by the courts. This order will compel both parties to comply with the terms and conditions of the order and will provide either party with a remedy if the other party defaults on the agreement.
There is no rigid procedure the courts use when deciding how to divide the assets or how much maintenance should be paid. However, the courts must consider relevant factors, specifically those outlined in the Matrimonial Causes Act 1973.
What factors will the court take into account?
These factors include the following:
- Financial needs and obligations which each spouse has or will have
- The net income, earning capacity, property and other financial resources which each spouse has or is likely to have
- The housing requirements of each spouse, specifically the need to house children
- Contributions made by each spouse or contributions likely to be made towards the welfare of the family, including looking after the home and/or caring for the family
- Standard of living enjoyed during marriage
- Age of each spouse and length of marriage
- The conduct of the spouses, if considered inappropriate to disregard
- Value of benefit loss by either spouse with the marriage coming to an end
It is strongly advised to seek legal advice when dividing your finances to ensure you receive your deserved share of the assets.
Do you need help reaching a financial settlement with your ex-partner? Contact Law can put you in touch with specialist family law solicitors to help you achieve your desired result. Please call us on 0800 1777 162 or complete the web-form above.