Blog Post

Financial settlements following divorce – where do you start?

Preeya Rampersad • 2 August 2021

Divorce or dissolution of a civil partnership is emotionally draining for both parties, and this is even before plans are made to apportion finances. 

Often ex-couples face having to negotiate a financial settlement while there is a great deal of anger and resentment; making the process more difficult and fraught. Before going into this phase following the breakdown of a marriage or civil partnership, it is important to understand the steps involved, and how to achieve the best outcome possible for you and your children.


Remember, you and your ex-partner are in the driving seat and have the power to come to an agreement regarding what is best for you both (and your children) without any external decisions being made for you. 


What are matrimonial assets?


The first stage of working out a financial settlement is to catalogue and agree all of the assets owned as a couple. Any assets acquired during a marriage are considered matrimonial assets, including:


  • Property – including the family home
  • Cash
  • Savings
  • Investments – e.g. endowments, pensions (private and workplace), shares, overseas investments
  • Trusts
  • Motor vehicles
  • Any property brought into the marriage intended for the family home
  • Personal assets – e.g. jewellery, antiques, art



You will need additional legal advice if there are any financial assets which cannot be easily split, e.g. an inheritance received during the marriage.


In addition, you will need to work out with your ex-partner how any debts will be treated, including overdrafts, credit cards, tax owed, mortgages and loans.


Once you have a clear and agreed picture of your overall financial situation, the next stage will be to work out a fair split. It may be necessary to involve an expert if there is any doubt regarding the value of an asset, especially for art and jewellery.


Spousal maintenance

After the division of assets, the next question is will be maintenance. Spousal maintenance needs to be considered whereby one of the parties are at a financial disadvantage (i.e. perhaps because on person has looked after the family home, while the other pursued their career). In essence, the aim of this is to allow the party with less financial capacity to adjust to their new circumstances and have the funds to move on to financial independence. 


When calculated, spousal maintenance needs to take into account living costs and income (both current and potential). The duration of these payments (and indeed whether it will be paid at all), can be dependent on how long the marriage was (although every case is decided on its own facts). 


Another option is to opt for a ‘clean break’, whereby any financial ties between you and your ex-partner are cut, meaning no spousal maintenance is paid by either person. This depends on the individual circumstances of those involved but may be achieved by agreeing a one-off lump sum payment.


Child maintenance

One of the most important considerations for both parties to a divorce is how to ensure the necessary financial resources are available for any children from the marriage. There are several methods of achieving this, including a family-based arrangement, whereby both parents agree an amount to be paid, and a standing-order is setup. This is the easiest method and ensures that communication between parents is maintained. If this is not possible, this can be worked out by the Child Maintenance Service, or by the court.

Working it out amicably vs court proceedings


The universal belief in family law is that any agreement that can be brought about by the parties between themselves will lead to a better result, not just in terms of how the items are split, but also the stress, time and costs associated with a legal process. If a mutual agreement is not possible, the next stage highly advocated by family law specialists is mediation. Mediation, simply put, brings a completely impartial third-party into the equation to help the process of negotiation between the parties. 


Mediation can be conducted in different ways to ensure that both people are comfortable. If needed, arrangements can be made for you both to be in separate room, with the mediator ‘shuttling’ between, acting as an intermediary. 


Any agreement made during mediation can be made legal and formal by way of a ‘consent order’, which your solicitor will draft, and the court will approve. This document outlines the split of money, property, savings, investments, and how spousal and child maintenance payments will be organised.


If mediation is not an option, or it has been tried but has not been effective, then it may be necessary to request a ‘financial order’ from the court; at the date of writing, the application cost is £255. You should be aware you may need to attend court, and the process can take several months. You must also have attended a Meditation Information and Assessment meeting (MIAM) (except in limited circumstances including situations of abuse). A MIAM is a session attended by you and your ex-partner (in separate sessions), during which the process of mediation is explained. The mediator will help to assess if your dispute is appropriate for mediation. If after the MIAM, other you or the mediator deem it inappropriate, you can then seek the assistance of the court. MIAM’s and the subsequent mediation process are extremely effective in resolving any points of dispute and help to preserve the ongoing relationship of the parties; especially important if children are involved.


Summing up

Divorce brings considerable turmoil in life, but if you can secure the guidance and support of a family law specialist you can completely trust, you can focus on the day to day family aspects of your life, in the knowledge your legal and financial requirements are in the best hands. Working matters out with your ex-partner fairly and directly is highly preferable to court action, but there will always be situations that have become so complex that this is unavoidable. At KLR Solicitors, we can provide you with the guidance, legal expertise, and support you need at this difficult time. We will always seek the best possible outcome, with your best interest and needs, and those of your children our primary goal.


For a free consultation regarding financial remedy proceedings and arrangements, please call us on 0208 300 6666.

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