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Financial Settlements

Most people find the prospect of resolving their financial claims a daunting one, not least because of horror stories in the press about proceedings like these costing thousands of pounds. At Fraser Dawbarns, our specialist team of family lawyers can advise you on all aspects of financial matters.

We believe that your money should be shared between you and your partner and not used to pay unnecessary legal fees. With that in mind, our financial settlements experts will advise you on what you need to know about each other’s finances, the extent of your claims in connection with all property, pensions, investments and income, and the process best suited to you to achieve an amicable and cost-effective resolution.

If you are involved in a disagreement about financial settlements, the family law team at Fraser Dawbarns can offer you help and advice.

Financial Settlements and Mediation

Where appropriate, our team will discuss the benefits of achieving financial settlement through mediation and negotiation, which can help you to come to an agreement that works for all parties. The lawyers are not there to impose their views on the couple, but to use the wealth of their combined experience to help the couple find their own solution. With the lawyers’ help, the couple are able to make informed decisions about the family’s futures.

Not only do couples find this process considerably less stressful than the court proceedings but they are able to continue communicating and therefore co-parenting, leading to improved relationships between children and parents. The family law team at Fraser Dawbarns want to minimise conflict and help to achieve a financial settlement that works for everyone involved. Contact us today to see how we can help you.

Happily, where a couple can agree a financial settlement, perhaps through mediation, our team can then give advice and assist with ‘converting’ it into a Clean Break Consent Order, to submit to the Court to become legally binding. This may include a Pension Sharing Order, which effectively takes some of the pension fund in one spouse’s ‘pot’ and transfers it to a ‘pot’ for the other spouse, for use as later income.

Court As A Last Resort?

Sometimes it is simply not possible to agree an amicable financial settlement, or inappropriate to attempt potentially time-consuming negotiations when there are assets and claims at risk and action is required. In those circumstances, it may be necessary to initiate Court proceedings. The team at Fraser Dawbarns will try to avoid proceedings where possible, as this can be very stressful and expensive for all involved. However, should the matter go to Court, they are experienced in fighting to protect and secure our clients’ best interests.

Court proceedings require full disclosure of assets, income and debts, and Judges now want spouses to be more proactive and practical. This requires evidence of mortgage borrowing capacity and examples of suitable properties to rent/purchase. The first Hearing – ‘the First Directions Appointment’ – is intended to ensure that all the financial information is to hand, and to determine whether expert advice is needed from pension experts or accountants etc.

At the second Hearing, ‘the Financial Dispute Resolution’ Appointment, when all of the information and expert advice is available, the Judge will say how s/he thinks the case should be settled – i.e., if the house should be sold, how the proceeds should be divided. Most spouses will settle at this stage, having had the benefit of the Judge’s opinion, but the few cases that cannot conclude here will have to proceed to a Contested ‘Final Hearing’. At this stage, a different Judge will listen to both spouses before making the financial decision on settlement.

Our primary aim will always be to achieve a reasonable settlement at the earliest stage, reducing conflict and acrimony. If you have any concerns about financial settlements and would like to speak to someone, contact the family law team at Fraser Dawbarns who can help answer any questions you have.

Frequently Asked Questions on Finances on Divorce/Civil Partnership

No it does not. The same rules apply to the breakdown of a civil partnership as to the breakdown of a marriage. You cannot avoid a financial claim by an ex-partner if you marry or enter into a civil partnership.
Even in these circumstances it may be possible for your ex to make a claim, this is a complicated area of law that may be subject to change in the near future. In order to protect your assets you need legal advice and to enter into a Cohabitation Agreement.
Such agreements are not automatically legally binding. Again this a complicated area of law which may be subject to change in the near future. If there is to be any possibility of protecting your assets you need to be fully advised regarding the effect of such an agreement in your circumstances. The law relating to matrimonial breakdown (including civil partnerships) is complex and the only way you may be able to protect your assets is to take legal advice prior to any ceremony taking place. Please note such advice needs to be sought ideally 4 months before any ceremony.
At present, the law in England and Wales regards pets as personal possessions and, other than considering which spouse could provide the better home, the focus on the financial aspects; which spouse brough the pet initially? Which spouse has been paying for the insurance and veterinary bills? Court proceedings can be stressful and expensive, and so engaging in correspondence or mediation to try and reach an agreement should be attempted. To try and avoid such issues, the couple may wish to consider entering into a “Pet-Nup” – a Pre-Nuptial Agreement setting out intended arrangements for any animals, should the marriage break down in the future!
The first thing is to establish whether the money was a gift – for you to keep – or a loan – a transaction with some possibility of repayment/enforcement. If the monies were loaned did the payment represent a ‘soft’ loan or a ‘hard’ loan? Have repayments been made before, to support that the monies were loaned? Often the Courts describe money from relatives or friends, loaned informally with no written demands for repayment, as ‘soft’ loans. A ‘hard’ loan would usually involve a formal, written arrangement and obligation, with written demands for repayment and a threat of Court action. A ‘hard’ loan probably will be repaid, a ‘soft’ loan may not be repaid from the marital ‘pot’, however we have seen judges say that parents would not expect to receive money back. If the relative or friend is concerned about this, there may be an option for them to become part of the case and put their position across.
Both parties are under a duty to provide the other with full details of their financial circumstances together with documentary evidence. We call this financial disclosure. Each party would need to supply full details of their income, with payslips, business accounts etc as evidence. Assets, property valuations or share valuations may also be required, liabilities and up to date statements relating to all debts will be required. Pensions and detailed information would be required from the Pension Trustees including the cash equivalent value of the pension. Proceeding with financial disclosure enables us to identify all the assets of both parties, so we can then attempt to negotiate an agreement.
Mediation is a form of dispute resolution. If you have agreed divorce and financial matters with your spouse, you do not need to access any dispute resolution services. If matters are not agreed, particularly in relation to children, parties are encouraged to attend mediation in the hope of reaching an agreement. Research has shown that mediated agreements produce better outcomes than Court Orders that have been imposed upon the parties. We encourage mediation whenever it is suitable. If parties do not want to attend mediation, then dispute resolution can take place by way of solicitor correspondence or, as a last resort, a Court Application. There is a requirement to have attempted mediation before making an application to the Court.
If you have agreed your divorce and financial arrangements then you do not need to attend Court. Your divorce will be processed through the Court as a paperwork exercise instead. However, if after attempting dispute resolution through mediation and/or negotiations through Solicitors, you are unable to agree financial arrangements then you may need to apply and attend at Court.
Actuaries are pension experts who can look at all the pension funds a couple have and calculate how they should be divided to try and ensure that in the future the (ex) spouses either have equalised capital provision or equalised income provision. Alternatively actuaries could calculate how much cash one spouse should receive to offset a pension claim. Actuaries can consider and ‘ring-fence’ funds that were built up before the marriage, if this is relevant.
Potentially yes, but there are exemptions and it is essential to get advice from a financial adviser or accountant from the outset of your divorce to make sure. This is particularly important in a case where there are substantial assets including property.
This is a difficult question to answer. There is no right or wrong answer, there is no set formula. The Court has a list of factors to take into account and then makes a decision that is fair in all the circumstances of the case. This means it can be quite difficult to predict what a Court will do in relation to a financial claim on divorce. Court is a last resort because the outcome is unpredictable, it can take 6 – 12 months for the proceedings to be dealt with and the costs of such an application for both parties are high.
Costs orders are rare. Generally, the Court expects each party to be responsible for their own costs. The Court does have the power to make costs orders but these powers are exercised rarely.
Unless and until the Court pronounces a Clean Break Order, all financial claims remain open. This means, even after the divorce, if you have not obtained a Clean Break Order from the Court then your spouse can make an application to the Court in relation to your assets at any time in the future. The only way to be absolutely sure your ex-spouse cannot make a further financial claim upon you is to apply to the Court for a Clean Break Order. When we settle the financial side of a divorce, the vast majority of cases include a clean break. We would draft an Order setting out the financial agreement reached and including a clean break. This Order is sent to the Court with another document setting out full details of the case for approval by the judge. As soon as the judge has approved an Order including a clean break, the clean break becomes effective and further financial claims are not allowed. Please note, the clean break does not impact on the obligation to pay child maintenance.
In some cases we may offer fixed fees for negotiations and/or applications to the Court in relation to financial matters. Generally, we charge our hourly rate, which varies depending upon the experience of the fee earner. We do offer fixed fee appointments, which is currently £350.00 plus vat, for initial advice regarding financial matters or the arrangements for the children and more detailed advice regarding costs can be given at that fixed fee appointment.

Why Choose Fraser Dawbarns to Help You?

Pricing Options

In more complex cases that are beyond the scope of the fixed fee service, we offer a choice of pricing options to our clients. By offering the choice between undertaking work on either a fixed fee basis or at an hourly rate, we give you the freedom to select the pricing option that best suits your needs. Please contact us to find out more.

Giving you Total peace of Mind

We offer our clients the expert and comprehensive legal advice that they are entitled to expect. We also provide our clients with support, a sympathetic ear and peace of mind during what is a very difficult and emotional time.