If a relationship breaks down, it is important to note that the divorce or dissolution of the civil partnership will only legally separate you from your spouse and will not address your respective financial claims. There will be potential claims in relation to capital, income, inheritance and pensions. In addition to these four basic financial claims against each other there might also be claims on behalf of any children of the family (this can include stepchildren too). In respect of any children the most important claim is for maintenance which, in the event of a dispute, is almost always dealt with by the Child Maintenance Service.
Methods for resolving the financial issues, and the time for doing so
The process of resolving the financial matters can take place before divorce proceedings are instituted, during divorce proceedings or after the divorce is obtained. Essentially, there are two ways of resolving the financial issues – through agreement or through determination by a Judge. It is always best to try to resolve the financial matters through agreement and indeed most of the different methods of resolving the finances which are detailed below are methods to try to achieve an agreement. Indeed, the Court process is geared up to try to get the parties to reach an agreement and the Judge will only determine the finances at the very end of the process after all efforts to reach an agreement have proved unsuccessful.
There are, however, a number of different approaches to achieving an agreement and sometimes the Court process has to be instituted before an agreement can be reached perhaps because one of the parties needs a push in order to deal with matters either because they have a tendency to ignore the situation or because the existing status quo suits them.
The normal methods of resolving the finances are detailed below and often a combination of the methods can be used to achieve a resolution:
1. Direct discussions between the parties
2. Discussions through solicitors
4. Collaborative Law
5. The Court process
If an agreement can be reached in relation to the financial issues then the formal manner of recording the agreement in a binding legal agreement is through a financial consent order or a separation agreement. Obviously if an agreement cannot be reached then the issues will remain unresolved until determined by a Judge or Arbitrator.
The relevant legislation that deals with financial orders for married couples is Part 2 of the Matrimonial Causes Act 1973 (“MCA”) and for civil partners it is Schedule 5 of the Civil Partnership Act 2004 (“CPA”).
For clarity, the provisions for financial relief contained in the CPA correspond with the provisions contained in the MCA. As such, regardless of whether you are married or in a civil partnership, you will have the same financial remedies available to you.
The factors which the Court will consider when dealing with the financial issues
When considering how the finances are to be divided, the Court will consider a number of factors. First, if there are any children involved, the Court will consider that child’s financial needs based on their current circumstances. Thereafter, the Court will consider the following: –
- The income, earning capacity, property or financial resources each party has, or is likely to have in the foreseeable future, including any increase in earning capacity that the Court would consider reasonable to expect a party to take steps to acquire;
- The financial needs, obligations and responsibilities that each party has now or is likely to have in the foreseeable future;
- The standard of living enjoyed by the parties before the breakdown of the relationship;
- The age of each party and the duration of the marriage or civil partnership;
- Any physical or mental disability either party has;
- The contributions each party has made or is likely to make in the foreseeable future to the welfare of the family including looking after the home or caring for the family;
- The conduct of each of the parties, if that conduct is such that it would be, in the opinion of the Court, inequitable to disregard it; and
- In the case of proceedings for a divorce/dissolution or nullity order, the value to each of the parties of any benefit which, by reason of the divorce/dissolution or annulment, that party will lose the chance of acquiring.
If you have any queries about your financial situation following the breakdown of a marriage or civil partnership, please contact us today for a free no obligation telephone discussion by calling either our London, High Wycombe or Marlow offices or by email: email@example.com.