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Navigating Financial Settlements in a Divorce: Why You Need a Family Law Solicitor

9 January 2024

Divorce proceedings are never easy, but dividing assets and working out a divorce financial settlement can make them even more challenging. Money can be a sore subject at any point in a relationship, but during a divorce, it can spark tensions and conflicts. That’s why it’s essential to enlist the help of an experienced family law solicitor, who can guide you and your former partner through the process of managing your financial affairs, making financial claims and allocating marital assets while ensuring both parties receive a fair financial outcome. At Redkite Solicitors, we understand the financial stress and emotional burden that comes with divorce and aim to help you reach an amicable financial agreement.

Importance of Seeking Legal Advice

In a divorce settlement, both parties may have differing opinions on what they are entitled to in terms of matrimonial assets, non-matrimonial assets and other assets. One or both parties might hesitate to provide full financial disclosure, which can result in arguments and prevent an equitable financial settlement.

Advice from a solicitor is key in this situation, as they can help you navigate what can be a complicated and confusing process and reach a fair financial settlement between you and the other party. They can guide you through the financial disclosure process and help you evaluate your circumstances, examine any prenuptial agreements and financial assets, calculate each ex-partner’s earning capacity and potential future earnings, advise you on what fair settlement may be achievable and help mediate any disputes that may arise. A solicitor can also ensure that all settlements and agreements are legally binding, giving you peace of mind should any arguments arise in the foreseeable future.

Dividing Pensions

Dividing pensions can be a particularly complex matter when it comes to divorce, and it’s essential to get the right advice from a specialist family law solicitor. Pension sharing, pension offsetting or pension attachment orders may be relevant depending on the pension scheme in question, and seeking legal advice can ensure that you’re aware of the options available to you.

A solicitor can help evaluate you and your ex-partner’s pension, help you understand the long-term implications of each option and make sure any settlement agreement you reach is watertight, legally binding and accurately reflects both your needs.

It’s worth noting that pension division in a divorce settlement is not solely about the immediate financial implications but also involves considering you, your former spouse, and your children’s long-term financial security. A knowledgeable solicitor can assist you in evaluating the potential tax implications, investment growth, and impact on your retirement plans.

A solicitor can also help you understand the potential risks and benefits associated with each pension division option, ensuring that your decision aligns with your financial goals and needs. This holistic approach to pension division ensures that you are not only protected in the short term but also positioned for a financially secure and stable future.

Splitting Property in a Financial Settlement

Splitting property and matrimonial assets can be a contentious issue, especially when it comes to selling your property or transfer of equity. Having a professional and knowledgeable family law solicitor on your side can alleviate much of the stress and tension involved in the process of securing your marital assets. They can assist you with interpreting any prenuptial agreement, negotiating domestic or foreign properties, determining your mortgage capacity, and highlighting any tax implications that may arise as a result of the transfer of assets.

A solicitor will also assist you with drafting your consent order, which is the legal document that confirms your agreement to divide your assets. Additionally, they can guide you through all the legal aspects of selling or assigning your family home if required.

Matrimonial Assets vs Non-Matrimonial Assets

Matrimonial assets in the UK refer to all financial resources considered part of a couple’s marital estate upon divorce or separation. These assets generally refer to everything acquired during a marriage, including property and savings accounts. Other matrimonial assets can include investments, pensions, income streams, income distributions or even business interests. Division of assets, including matrimonial assets hinges upon fairness; courts strive to achieve an equitable distribution that serves the needs and contributions of both spouses.

Although premarital assets or inheritances may generally be treated as non-matrimonial assets and may not be subject to equal distribution, they may be considered on an individual basis if the court decides to do so. Gifts and similar assets received by only one spouse can also be considered non-matrimonial assets.

Financial settlements during divorce proceedings centre around matrimonial assets, and their distribution can depend on various factors including the length of marriage, financial contributions by each partner, the possible need for spousal maintenance payments and any potential children who may need support post-divorce. Overall, both parties should maintain an acceptable standard of living post-divorce.

Child Maintenance

After a divorce, one of the largest financial responsibilities is caring for dependent children. Child maintenance and financial needs can be a complex and emotional subject. Seeking legal advice from a solicitor will ensure you and your ex-partner agree on a fair and realistic arrangement where all the circumstances and financial commitments are taken into account. A solicitor can help you work out what you and the other party should contribute, especially if each parent has a different earning capacity or if there are different parenting schedules and financial arrangements to take into account.

In the UK, the allocation of living expenses for dependent children after a divorce is typically determined through child maintenance arrangements. These arrangements aim to ensure that both parents continue to contribute to the financial well-being of their children even after the marriage has ended.

Dealing With the Child Maintenance Service (CMS)

The Child Maintenance Service (CMS) or, in some cases, private agreements between parents, calculates the amount that the non-residential parent (the parent with whom the child doesn’t primarily live) should pay to the residential parent (the parent with whom the child primarily resides). This process sometimes also determines whether spousal maintenance should be paid by an ex-partner, how much, and for how long.

The calculation will take into account factors such as each parent’s income and earning capacity, the prenuptial agreement, the number of children involved, the amount of time the children spend with each parent and matrimonial assets, future income or other financial resources available to each parent. While the CMS provides a standard formula for calculating child maintenance, parents can also agree on their arrangements if they find it suitable. The primary goal is to ensure that children receive adequate financial support and that their living expenses are met, enabling them to maintain a stable and comfortable standard of living following the divorce.

When you seek legal advice from a qualified solicitor, they will help you decide, based on your circumstances, whether you should allow CMS or the court to handle your children’s needs post-divorce. They can also offer assistance if the other party fails to uphold their part of the divorce settlement, including paying child maintenance.

Mediation Services

If you are unable to reach an agreement with your former partner, then a family law solicitor can offer specialist legal advice and a family mediation service to try and reach an amicable resolution to your financial divorce settlement. Mediation is a confidential process that can reduce the level of conflict and limit the cost and time spent on a financial divorce settlement.

A solicitor can also help both parties feel fully heard and understood and prevent exploitation. For example, in more severe circumstances like when domestic abuse has occurred, or when one party has a physical or mental disability.

Dividing Assets

A qualified solicitor can help decide on a fair division of assets, ensuring matrimonial assets, non-matrimonial assets, capital assets such as the family home, business assets, and any other substantial assets are taken into account. They will take into account any prenuptial agreements and other legally binding factors and help you determine the best possible outcome based on your unique situation.

Where necessary, they will help you and your ex-partner schedule financial dispute resolution appointments and court hearings, which will allow the court to decide on a reasonable divorce settlement and help ex-partners with dividing assets. Skilled solicitors can also help you understand the wording and implications of complex legally binding documents like your decree absolute, consent order and financial order.

A mediator who is also a family law solicitor can advise both parties on how to resolve differences and maintain a cordial relationship when dealing with finances, spousal maintenance, childcare disputes, and other financial affairs in the future.

Final Thoughts

Reaching an amicable divorce settlement can be a challenge. With the help of a professional family law solicitor, the divorce process can be less stressful and more manageable. At Redkite Solicitors, our team of experienced family law solicitors are here to help you navigate the rough waters of divorce and reach a fair divorce financial settlement. We aim to help reduce your financial angst during this difficult time and ensure that you and your former partner come to an amicable agreement that works for both parties.