- Page Contents
- Specialist Divorce Settlement Solicitors
- What Is Divorce Financial Settlement?
- When Can I Apply?
- How Are Assets Split?
- Matrimonial Home
- Business Assets
- Assets Held In A Trust
- Overseas Assets
- Life Insurance Or Endowment Policies
- Court Procedure
- How Much We Charge?
- How Much Is The Court Fee?
You can apply for divorce financial settlement by completing and submitting application form A to the relevant court dealing with the divorce matter. Obtaining a financial settlement when you are divorcing your spouse is important because outstanding financial claims may come back to disrupt your lives even years after your divorce has been finalised. This is because in England and Wales, even when you’re divorced, you still retain the ability to make financial claims against your ex and vice versa, and there’s no time limit for making these. This is why it’s crucial to put your financial affairs in order and have a binding court order stating what your financial arrangements with your ex husband or wife are.
The property and money issues (divorce financial settlement) in a divorce matter can either be settled with mutual agreement in the form of a consent order approved by the divorce court or through an application for divorce financial settlement order made by a divorce court.
The divorce lawyers at Sunrise Solicitors are specialists in divorce financial settlement matters. Our expert team of divorce financial settlement solicitors have wealth of knowledge and experience of successfully handling divorce financial settlement matters.
Getting divorced in England & Wales and need legal help and assistance with divorce financial settlement? Contact our expert team of divorce financial settlement solicitors in London, Manchester or Birmingham for fast, friendly, reliable and fixed fee legal services for your divorce financial settlement application. Ask a question to our expert divorce financial settlement solicitors for free divorce settlement advice online by completing our enquiry form and one of our divorce settlement solicitors will answer your question as soon as possible.
A divorce financial settlement is an arrangement under which a couple’s assets and financial affairs are separated upon divorce. "Ancillary relief" is the term used by divorce lawyers to describe all orders of a financial or property nature or that relate to pensions that a divorce Court can make following divorce, judicial separation, Dissolution Of Civil Partnership, or nullity proceedings.
After the family court has issued Decree Nisi and after both parties have exhausted the mediation process (where applicable), an application for divorce financial settlement can be made to the court.
You can normally get a financial settlement any time during the divorce proceedings. However, you can apply for financial settlement even after the divorce has been finalised. It’s advisable to apply for financial settlement before your partner or you have remarried.
The judge has the final decision on how your assets will be split. The key factors which will be taken into account in an assessment of how any capital should be divided, as well as whether or not income should be shared, are as follows:
- Children – their financial needs as well as other factors that may affect their future wellbeing;
- The financial needs of you and your spouse;
- The length of the marriage and your respective ages;
- The current earnings of each party and the potential earning capacity of each party now and in the future;
- Health issues affecting either you, your spouse or any children;
- The assets of each party including pensions;
- The standard of living you have had during the marriage;
- The financial and non-financial contributions (such as caring for children and running the house) that each of you has made to the marriage;
- It is only in very exceptional circumstances that the conduct of you and/or your spouse is relevant when dealing with financial matters.
The judge is only likely to consider a 50/50 split if you have been married for a long time. The main consideration is the needs of those involved, including children. If, after consideration, the judge thinks that one of you has greater need than the other, the assets can be split unequally.
If, for example, two young people divorce after a brief, childless marriage, it might be fair for them to each walk away with the assets they brought into the marriage, with neither paying the other maintenance.
On the other hand, suppose a couple have been married for 30 years, with the wife bringing up the children and looking after the home while the husband worked. A fair financial settlement might award the wife half the joint assets, including half her husband's pension entitlement and a significant proportion of her husband's income until he retires. This would reflect the value of the wife's contribution to the marriage as a homemaker and the fact that she would not now be in a position to suddenly start earning a large income.
If there are children, their needs - including maintenance - are dealt with separately as a priority.
The family home will almost always be an asset of the marriage and will therefore be included in the financial negotiations. Divorce settlement negotiations start from the point of a broad equality in division of assets. If one spouse wishes to retain the family home, they will need to have enough other assets to be able to offset the value of their spouse’s share of the home by transferring assets of that value to their spouse.
If not enough assets are available to achieve this, then the family home may have to be sold so that the equity contained within it can be split.
In some situations, particularly if there are children, it can be possible to be more creative, for example, one spouse could stay in the family home with the children, and the spouse leaving the home could retain a defined financial interest in the property, which they will realise at an agreed future date.
A family business is often looked at as something which produces an income - that can be used to provide maintenance - rather than just as an asset to be shared or sold.
There is no presumption that the individual who has built up the business has a greater claim to the business assets. The other partner's contribution to the marriage, for example, by looking after the home and children, might be considered to be equally large. Depending on the circumstances, this might mean that each partner could claim entitlement to about half the value of the business.
In many circumstances, it is possible to agree a settlement that allows the business to continue. For example:
- one partner could retain ownership of the business and pay maintenance out of the business income;
- the individual who will retain ownership of the business could borrow against the value of the business to provide a lump sum for the other partner;
- the business could be split into two separate businesses.
Where possible, courts try to avoid ordering a financial settlement that results in the break-up or liquidation of a business.
Divorcing parties must disclose any trusts from which they benefit or expect to benefit, and the value of these benefits can be taken into account. There can be a grey area where the trustees of the trust have discretion over who will benefit.
If one of the spouses in a divorce has previously placed assets into trust, these assets might also be taken into account. Clearly, this will be the case if the spouse who put the assets into trust is a beneficiary of the trust. It may also be possible to make a claim against the trust if it can be shown that the assets are still under the settlor's control or that the settlor created the trust once the marriage started to break down to shelter assets from a claim.
Trust law is complex. You should take advice if you wish to place assets into trust or discuss what claim you might have against assets held in trust.
Your pension is a marital asset, like your home and other assets. The value of your pension can be taken into account in deciding a fair settlement. Practical solutions can include:
- offsetting the value of one spouse's pension fund by transferring a lump sum, or other assets, to the other spouse;
- splitting the pension fund into two separate pension funds, one for each spouse;
- arranging that when a pension comes to be paid, a proportion of it is paid to the other spouse.
Assets held overseas can be taken into consideration in the same way as any other assets. In practice, a spouse may seek to hide overseas assets or transfer assets overseas to make them more difficult to recover. If you suspect that your spouse is doing this, take immediate legal advice.
Life insurance and endowment policies are taken into account when agreeing a fair settlement. You should agree how each policy will be handled, whether premiums will continue to be paid for regular contribution policies, and whether the beneficiaries of any life insurance cover will be changed.
You may choose to retain individual policies or to sell (or surrender) them. Any policies in joint names will normally be sold or transferred into one individual's name. Early surrender of a policy may result in a sharp fall in the expected value of the policy; any surrender, sale or transfer may also have tax consequences. Take advice on the best option in your circumstances.
A judge will not necessarily include an inheritance in your financial settlement, but will consider the needs of those involved. If you received your inheritance while you were married, the courts are more likely to include it as part of the settlement, but if it was received after your marriage broke down, they are more likely to exclude it.
The divorce financial settlement proceedings are very much Court-controlled. The Court will impose timetables for compliance with its orders and the parties will usually be required to personally attend all Court hearings. There may well be costs consequences for failing to adhere to timetables, to obey Court orders and to attend hearings.
Following is the step by step process for divorce financial settlement:
Step 1: Notice of Application - Form A
A divorce financial settlement application is started by filing with the Court Form A application ('Notice of an application for a financial order'), accompanied by a cheque in the sum of £255 without consent and £50 with consent, being the court fee payable.
Step 2: First Directions Appointment (FDA) date
The Court then sends each party a sealed copy of the Form A, accompanied by both a Notice of First Appointment (Form C) and a Notice of Response to First Appointment (Form G). Form C is the most important of these because:
- It contains details of the date and time of the First Appointment (that will be in 12 to 16 weeks' time);
- It contains the timetable for the case up to the initial hearing date of it (the "First Appointment"). This timetable provides the dates for the parties to file with the Court and to exchange with each other:
- A Statement of Information about their financial circumstances (known as a Form E) no later than 35 days before the First Appointment;
- A concise statement of the apparent issues between the parties;
- A chronology;
- Either a questionnaire setting out the further information and documents each requires from the other, or, a statement that no such information or documents are required;
- A completed Notice in Form G, stating whether the party will be in a position at the First Appointment to treat that hearing as a Financial Dispute Resolution hearing ("FDR").
- The Form C also provides that an estimate in Form H of any legal costs incurred by the party be produced to the Court at the First Appointment and a copy supplied to the other party.
Step 3: Financial statement - Form E
Each party to the divorce financial settlement completes a Form E (Financial Statement) and sends the same to the court at least five weeks before the First Directions Appointment (FDA). Copy of the form E is also sent to the other party.
Step 4: First Directions Appointment (FDA) Documents
The following documents are filed 2 weeks before the First Directions Appointment (FDA):
- A concise statement of issues;
- A chronology of events;
- A questionnaire to address issues arising from the Form E;
- A Form G, through which you tell the court whether the FDA meeting can be combined with the Financial Dispute Resolution (FDR) meeting. Typically the FDR meeting takes place after the FDA meeting.
Step 5. Legal Costs Incurred By Each Party- Form H
Each party completes and sends the court a completed Form H just before the FDA meeting, listing any costs they have incurred.
Step 6: First Directions Appointment (FDA) Meeting At Court
The first hearing of a divorce financial settlement application is termed "The First Appointment". The First Appointment is a directions hearing that has to be attended personally by both parties unless the court orders otherwise. The objectives of the First Appointment are to define the issues in dispute between the parties and to save costs. The hearing takes place before a member of the judiciary called a "District Judge" who must determine:
- The extent to which any questionnaires served by the parties seeking further information must be answered; and
- The documents that must be produced and to give directions for the production of such further documents as are necessary.
The Judge must also give directions about such matters as:
- The valuation of assets, most usually the matrimonial home;
- The obtaining and exchanging of expert evidence, most usually with regard to the value of pension assets, if required;
- The evidence to be produced by each party; and
- The preparation of further chronologies or schedules (where appropriate).
It is assumed that the District Judge does decide that an FDR is appropriate. It is possible for the court to treat the First Appointment as an FDR. It may be remembered that the Form G can be completed accordingly. However, experience is that few First Appointments are treated as FDRs. The reasons for this include:
- That there are usually outstanding issues regarding the valuation of the parties' assets, particularly the former matrimonial home;
- The replies to the parties' respective questionnaires and requests for documentation are required before negotiations can take place;
- An insufficiency of court time. The majority of courts list First Appointments with a time estimate of 30 minutes and FDR's for one hour, this with a requirement that the parties and their advisors attend an hour before the actual FDR for the purposes of negotiations and in order to narrow the issues between them.
Step 7: File Proposals
Both sides answer questionnaires, prepare evidence, and submit proposals to the court for the divorce financial settlement. Both sides also submit a second Form H, listing updated costs.
Step 8: Financial Dispute Resolution (FDR) Hearing
The second of the three most likely court hearings in respect of an ancillary relief application is the Financial Dispute Resolution ("FDR"):
- The FDR appointment must be treated as a meeting held for the purpose of discussion and negotiation.
- Both parties must personally attend the FDR unless the court orders otherwise.
- The Judge or District Judge hearing the FDR appointment must have no further involvement in the case, other than to conduct any further FDR appointment or to make a consent order if agreement is reached, or to make a further directions order.
- Not later than 7 days before the FDR appointment, the Applicant for ancillary relief must file with the Court details of all offers, proposals and the responses to these.
- This includes any offers, proposals or responses that are made wholly or partly "without prejudice" (that is, usually privileged from disclosure to the Court).
- At the conclusion of the FDR appointment, any documents filed with the Court under point 4 above and any filed documents referring to them must be returned to the party filing them at his/her request and not retained on the Court file.
- Parties attending the FDR appointment must use their best endeavours to reach agreement on the matters in issue between them.
- The FDR appointment may be adjourned from time to time.
- At the conclusion of the FDR appointment, the Court may make an appropriate Consent Order (if the parties have agreed terms of settlement) but must otherwise give directions for the future course of proceedings, including, where appropriate, the filing of evidence and fixing a final hearing date.
Experience has been that few cases settle at an FDR appointment. There are a number of reasons for this including:
- The fact that some cases simply seem incapable of being settled by agreement. They require judicial determination;
- In other cases the observations made by the Judge or District Judge with regard to the bases for settlement of a case do not find favour with one, other or even both of the parties;
- Some parties, quite understandably, want more time to consider decisions that, once made, could have profound repercussions for their futures.
It is, however, important to remember that no guillotine falls with regard to negotiations between the parties following the FDR appointment. The parties can continue to negotiate up to the time of their Final Hearing, if indeed there is one.
Step 9: Further Proposals
The negotiations continue between the two sides, including revised proposals for settlement that are sent to the court and to the other party.
Step 10: Final Hearing
"Final hearings" probably only occur in some 10% of cases involving an application for ancillary relief. If a final hearing is necessary, in addition to listing the matter for such, the Judge dealing with the case at the FDR stage is likely to make what is known as an "order for directions". Typically such an order will require the parties to:
- File (with the Court) and exchange (with each other) what are termed "narrative" or "Section 25" (of the Matrimonial Causes Act 1973) statements. That legislation contains details of the matters to which the Court is to have regard in deciding how to exercise its powers when dealing with ancillary relief applications, first consideration being given to the welfare, while a minor, of any child of the family who has not attained the age of eighteen;
- Provide updating of the financial disclosure previously made by them, whether in their respective Financial Statements (Forms E) or subsequently. It should be borne in mind that a period of 9 to 12 months may have elapsed between the filing and exchange of Forms E and the date of the final hearing;
- Produce up to date valuations of assets such as the former matrimonial home, business interests, pension funds and similar items.
Recent experience is that a minimum of two days will be allocated to the final hearing of a case, even where the issues between the parties and the extent of their assets are relatively limited. At a final hearing, the parties will each give evidence on oath that is subject to cross-examination. There is also likely to be a detailed consideration of the documentation produced by both parties. Generally, the parties' cases will be presented by barristers (or "counsel") who will both represent their respective clients and make representations on their behalf.
Depending upon matters such as the complexity of the case, judgment may not be given at the conclusion of the hearing but "reserved" to be given at some subsequent date.
Our Fixed Fees For Divorce Financial Settlement
Our fixed fees for various stages of the divorce process involving financial settlement proceedings are given in the table below. The agreed fixed fee will be dependent on the volume of work involved in the case and the complexity of the matter. Please be advised that our fixed fees do not cover the court fees and the Barrister's fees.
|Casework Stage||Fixed Fee Range (Acting For The Petitioner)||Fixed Fee Range (Acting For The Respondent)|
|Uncontested Divorce||From £700 + VAT To £1,200 + VAT||From £600 + VAT To £1,000 + VAT|
|Preparation for mediation for financial settlement, mediation referral and follow up advice.||From £500 + VAT To £800 + VAT||From £500 + VAT To £800 + VAT|
|In case of agreement being reached in mediation, reviewing agreement and advising on the same. Where acting for the petitioner, preparing and filing of consent order with the family court.||From £700 + VAT To £1,200 + VAT||From £500 + VAT To £800 + VAT|
In case of no agreement being reached in mediation, all the work from issuing financial proceedings until First Appointment Hearing which includes the following:
|From £2,000 + VAT To £3,000 + VAT||From £1,500 + VAT To £2,500 + VAT|
Preparation for First Dispute Resolution (FDR) Hearing which includes the following:
|From £3,000 + VAT To £4,000 + VAT||From £2,500 + VAT To £3,500 + VAT|
Preparation for Final Hearing which includes the following:
|From £4,000 + VAT To £5,000 + VAT||From £4,000 + VAT To £5,000 + VAT|
Our Hourly Rates For Divorce Financial Settlement
- Our team of divorce & family law solicitors will charge on hourly rate basis with hourly rate starting from £150 + VAT to £250 + VAT per hour in relation to your divorce financial settlement application. The agreed hourly rate will be dependent on the complexity of the matter.
- The court fee for filing divorce financial settlement application in the family court is £255 without consent and £50 with consent which has to be paid at the time of filing the application. Petitioners with very low income may qualify for court fee exemption.