Financial Settlement

When a marriage or civil partnership breaks down, the finality of divorce or dissolution can be daunting.

Some clients who tell us that their relationship is definitely over, still waiver when it comes to committing to the legal process that will sever ties with their former partner.

Divorce and dissolution should draw a line under the marriage or civil partnership, allowing each person to move on. The process can be a difficult one and some people simply are not ready to embark on it – even though they do not see a future together.

That is a scenario in which a Separation Agreement can be really useful. It is an agreement that sets out terms on which two people will live apart. For some couples that just need to get out of their relationship without having to wait for the process of divorce or dissolution to be finalised, it can be essential. It can also be beneficial where two people have not been married for at least 12 months and so would not be eligible for divorce.

We can help you prepare a Separation Agreement that sets out the terms on which you will live separately. It will usually cover arrangements for your children (if applicable), the family home, bills and maintenance (if relevant) but it is up to you to decide. The key point is to make sure you cover the things that will genuinely allow you and your former partner to separate, while still fulfilling your individual and collective obligations and responsibilities.

Although they are not legally binding, Separation Agreements can be upheld by a Court. So, if your ex-partner does not stick to his/her side of the bargain, you may be able to ask the court to force them to do so based on the terms you had recorded in a separation agreement.

If you are ready to move forward with divorce or dissolution, then a Consent Order would be put in place rather than a Separation Agreement.

This is a document drafted by a solicitor that sets out the financial settlement of the parties. It becomes legally binding upon the parties when approved by the Court, giving certainty to them moving forward.

Settlement for a Consent Order can be reached through discussions between the parties directly, mediation or the collaborative law process or through negotiations between solicitors.

A Consent Order will set out the parties’ position in relation to claims for capital, income and pensions which one has against the other by virtue of marriage under Section 25 of the Matrimonial Cause Act 1973.

If an agreement cannot be reached by way of Consent Order or mediation - which is a pre-requisite to Court proceedings, it might be necessary for one party to issue a Court application for financial settlement under Form A.

The Court will set a timetable for financial disclosure exchange, which will enable the Court to have all the information necessary and deal with settlement accordingly. This avoids discussions dragging on indefinitely and provides a conclusion, where one party refuses to engage in meaningful negotiation.

The Court procedure encompasses three hearings; firstly First Directions Appointment where the Court would put in place the relevant orders to ensure it has sufficient information to base any settlement upon.

Secondly, Financial Dispute Resolution Appointment, where the Court will give an indication of where the Judge believes financial settlement would lie. This enables the parties to have a further discussion within the Court process to achieve a settlement.

Finally, if a settlement has not been achieved through the process, there is a Final Hearing where the Court will impose an Order upon the parties.

The Courts always encourage the parties to reach an agreement rather than impose a settlement.

Deed of Separation

When a cohabiting relationship outside of marriage and civil partnership breaks down, the financial settlement is encompassed with a “Deed of Separation.”

This is a document that both parties consent to and sign. It records their agreement as to how to divide their assets.

Court Route

If an agreement cannot be reached by way of Deed of Separation or mediation - which is a pre-requisite to Court proceedings, it might be necessary for one party to issue a Court application for financial settlement under a Trusts of Land and Appointment of Trustees Act 1996 application.

For advice from our Specialist Family Law Solicitors, call us on 01264 353411 or email us at family@bsandi.co.uk.