Dividing the Finances of the Marriage
Where do I start? Divorcing couples often find reaching a financial agreement the most challenging part of the divorce process. It is very easy to get caught in the trap of listening to friends, family and the media, as to who is entitled to what and why! The reality is that you need good legal advice from the beginning as it can be an information heavy process.
The best solution for all is an amicable agreement but when this just isn’t possible it is best to take a, thorough, organised and systematic approach. Having engaged your solicitor you will be asked to provide financial evidence of all that you own. You will need to provide a list of all the assets and property you have both in your sole name and any that you might own jointly with your spouse or any other person. You will also need to produce bank statements for all accounts, including savings, ISAs, shares and pensions etc.
Assets
When considering assets such as the matrimonial home or other property investments, these will need to be valued. Often it is preferable and more cost effective to agreed a joint valuer. In cases where agreement can’t be reached then each party will provide their own valuation. It may also be necessary to get other assets valued, such as long held pension and businesses. Often this will involve the expertise of an actuarist or pension expert, or a specialised accountant. The aim in all of this to provide a fair value for all of the assets. In addition, you may like to list certain items which are of particular value like paintings, vehicles or furniture.
It is only when all of the documentation is gathered together and that information is shared with your spouse’s solicitor can they meet to try and agree the division of the pot of assets fairly. This can be a difficult process and often requires the expertise of your legal team to advise and lead you on what the best deal is for you. In some cases, it is tempting to agree to terms that are not in your best interests just to get the matter wrapped up and finished. That is not necessarily what is financially best for you in the long term. Following agreement, the details are then drafted into a legal agreement as soon as possible thereafter, and both parties will sign. This agreement will then be made a rule of court when it comes to your actual divorce proceedings.
Financial Dispute Resolution
Sometimes parties cannot agree, despite best efforts. Next stop, the High Court and the FDR Process before the Ancillary Relief Judge. This is a process called Financial Dispute Resolution wherein the Judge will take time to examine all of the documents and assets in your case at length, and after much consideration will give you and your legal team an indication as to how your pot of assets should be divided fairly between you and your spouse. He/she will have taken into account all of the personal circumstances of both parties. He/she will then hope that you take the advice on board and will negotiate a settlement close to those terms. This, in reality is an extremely valuable process and one where agreements are usually met and issues are resolved. It may take a full day in the High Court to thrash out a deal but it is the most cost effective way to achieve a resolution at this stage.