Settlement Agreement
Divorce settlements generally involve reaching a resolution as to how assets and finances from the marriage will be divided and/or separated. This is documented in a formal legal document known as a settlement agreement and can also include decisions as to whether one partner will continue to live in the family home after the divorce, or whether the home will be sold so that the sale proceeds can be divided by between the couple.
Section 25 of the Matrimonial Causes Act 1973 sets out the various factors taken into account when assets are separated following a divorce, or when dissolving a civil partnership; these are referred to as ‘Section 25 factors’ and take into account each person’s income and assets, the duration of the marriage, and the couple’s standard of living during the marriage.
Deed of Separation and Finances
Using a deed of separation, it is also possible for couples to reach an agreement as to how the joint assets will be shared, and the amount of maintenance to be paid, amongst other matters which can also be included and agreed upon within the deed.
A deed of separation can sometimes (when required) be drawn up before divorce proceedings have been initiated, if (for example) a couple does not wish to divorce at all, or divorce immediately.
Form E
The Parties to a divorce will often exchange Form E documents, which broadly deal with section 25 factors, which can then form the basis for a settlement to be reached (with all the relevant information having then been exchanged between the parties).
If necessary, a court can make a judgment on a wide variety of financial matters, including (but notwithstanding):
- Income
- Income from partnerships
- Insurance policies
- Investments, such as funds, shares, stocks, bonds etc
- Maintenance
- Pensions
- Property
- Savings
- Trusts
Disclosure
The parties should disclose on all section 25 factors, and where it is likely that a party has not disclosed or is unlikely to have disclosed all of their relevant information, the court can give any such order as it thinks fit in the circumstances to deal with any concealment. In such cases, the court may freeze accounts, investments and other assets, or order that certain transactions be set aside. This can be the case where (for example) someone has sold or transferred the benefit of an asset to avoid disclosing it and having it form part of the marital estate to be settled or adjudicated.
Divorce settlements and separation agreements should be fair to both parties, and should also take into account any children in the relationship, to safeguard their needs now and in the future.
The duration of a marriage or civil partnership, and the standard of living enjoyed by the parties during the relationship are usually taken into account in divorce settlements.
Mediation
It is common to appoint a mediator to help agree a settlement. The mediator is an independent third party who works with both parties to determine which points require agreement, and can also help to achieve that by getting the parties into the spirit of negotiation and compromise where possible/applicable.
The mediator would generally document the key matters agreed between the parties, so that those points raised can then be taken to Solicitors by each party for independent legal advice. We (as Solicitors) would then advise on the main issues, and of the implications of any terms agreed, and ensure that the agreement is in your best interests.
If a final agreement is then reached, the parties can sign it and it will become binding from the point at which it is executed. The agreement can then also be filed with the court by way of a consent order between the parties, which we would prepare for you and then apply to the court on your behalf. A consent order would essentially finalise what has been agreed and prevent disputes later on.
Other Court Orders
Lump sum order
Various types of court orders can also be applied for, to ensure one party is not left disadvantaged. This might include a lump sum order – where one party is ordered to pay a lump sum to the applicant, or a property adjustment order, where dividing property in a specified way. Such orders can transfer ownership, defer a sale, or allocate proceeds.
Clean break order
A clean break order can be applied for where it is intended that there will be no financial ties between the parties after the court order has been made. A clean break order would not include any spousal maintenance.
Spousal maintenance order
A spousal maintenance order can require one spouse to pay the other a regular amount of money after a divorce or separation has occurred. The purpose of spousal maintenance orders is to help the spouse who has less financial standing to maintain a reasonable standard of living after the marriage has ended.
Child maintenance
Child maintenance payments are mandatory (as required by law), and are generally payable until the child reaches 21 or finishes attending full-time education, whichever occurs earlier. Ideally, the parties would generally agree on a child maintenance schedule which can then be included as part of a settlement agreement. Where that is not possible the Child Maintenance Service (CMS) can be consulted.
Contact us
Ambrose Crookes Solicitors offer expert legal advice to parties who are considering or are in the process of going through divorce proceedings. We offer a free initial consultation and encourage you to contact us if you have any questions.