Splitting finances?
Resolving the financial issues with your former partner will often be the hardest part of the breakdown of your relationship. There are a number of things you should or should not do to help the process be more straight forward.
Do – consider your options
There are a variety of ways to resolve financial issues without having to go through the court system. It is always better to reach an agreement between you than to have an expensive battle through the court. Mediation, arbitration or negotiation through lawyers can all help to reduce the cost of what can be an expensive business.
Don’t – involve the children
Financial matters are for adults to sort and it is not appropriate to make the children aware of what is being discussed between their parents. The time for the children to be told is when a decision has been reached. Involving them as a means of putting pressure on the other parent must be avoided.
Do – get legal advice
You cannot negotiate unless you know what is or is not possible. It is sensible to at least get advice from a specialised family lawyer as to what your rights and entitlements may be before sitting down with the other party. Remember that your friends may know about their separation but they do not know all there is to know about yours.
Don’t – ignore matters
The surest way to end up in expensive court proceedings is to bury your head in the sand and hope it all goes away. Faced with someone who refuses to negotiate, the other party will have no option but to ask the court to sort matters out. Ignoring court proceedings can result in you having to pay the costs of failing to do what you should have done. Ultimately it could end up with your committal to prison.
Do – get full disclosure
The aim is to divide the assets of the relationship between you in as fair a way as possible. You can only do this if you know what is available for division. It is therefore important that you ensure that you get full information about the finances of your partner and that you give full details of your own.
Don’t – hide assets
You may feel that you have been clever in not disclosing assets or putting them into someone else’s name but the court has wide powers to set aside transactions which they consider have been done to defeat the claims of the other partner. Equally, orders made on the basis of incomplete disclosure may be set aside, ultimately costing you a lot more.
Do – try to settle
It is better to reach an agreement between you than to have a settlement imposed on you by a third party which might suit neither you nor your partner. It is better to have some of what you want than risk getting all of what you do not want.
Don’t – mix pensions
It is important to understand that there are different types of pensions. You will have to get valuations for your pensions but you need to be aware that it may not be comparing like with like and that the same value for different types of pension does not mean that they are worth the same. Seek proper advice.
Do – get a court order
If you manage to agree a settlement, get it approved by the court so that you have an order which can be enforced if necessary. Only a court order can prevent claims being made against you in the future.
Don’t – forget tax
Your settlement may have tax consequences which you have not thought of. Make sure you get advice to ensure that you understand the potential effect of, for example, Capital Gains Tax which might result in a completely different outcome to that you had intended.
For more information about divorce and financial settlements, contact our family team.