Many people believe that on divorce the Decree Absolute (the final decree dissolving the marriage) also dissolves any financial connection with the ex-spouse. This is a myth. Reaching a financial solution during divorce proceedings can be complex and is therefore an area of law that causes most separating couples to seek advice.
The financial application begins with both parties completing a concise financial statement known as Form E. We recommend you seek specialist advice on completion of such a statement. Each party must disclose to the other their true financial position, and provide documentary information to verify this. Typically, for example, details of salary will be corroborated by producing a P60 and three recent salary slips.
In most cases, the financial issues will be addressed alongside the divorce proceedings and hopefully settled with agreement and by consent.
If a property, particularly your home, is held in one party’s name it may be vital to seek professional advice as soon as possible to protect your interest in the property or to prevent disposal.
The court will assess deciding factors in financial provision such as:
- The financial needs of the parties, especially the children.
- Length of the relationship and length of marriage.
- Financial fairness to both parties moving on following the separation.
- The capacity of the parties, age and health.
- Housing requirements.
If you can’t resolve the financial issues yourself the court will expect you to try and resolve your differences using a mediator to help you. If this procedure fails then the court’s process can be invoked. The court will take into account all of the relevant factors of the relationship, the key consideration being the welfare of any children. The court will also look at all financial matters such as the value of property (including property in the UK and abroad), savings, income, pensions, together with liabilities debts and obligations. However sometimes liquid assets such as those used in a business are discounted.
Following satisfactory disclosure, decisions can be made as to the appropriate division of the assets, any liabilities and property. If the financial disclosure does not seem to be sufficient either party has the right to apply to the court to deal with the financial matters.
The process takes its course over three stages;
- A first appointment (known as FDA) is set where a district judge will deal with scheduling and timetabling the case to give deadlines for each party to provide documentation and answers to questions that may have been raised by the other party. At this early stage it is decided if any expert information is required, for example a valuer in relation to any property or an expert to assess the value of a pension.
- Once everyone is satisfied with the information provided in relation to the case the parties are ordered to attend a Financial Dispute Resolution Hearing (known as FDR), The judge will give an ‘opinion’ on the case and the parties are encouraged to try to negotiate a settlement in light of the courts guidance. The judge’s views are confidential and not binding.
- If matters cannot be settled by negotiation at the FDR the matter is listed for a final hearing where a new judge will be appointed to the case. This new judge will decide the matters having heard the evidence of the parties and any experts as required.