A lot of visitors to this blog arrive here with questions about divorce and money. It is not often that both parties to a marriage have the same amount of money. If they had the same amount of income and capital and neither had any debts, then many of the challenges in achieving a suitable financial settlement would be solved.
The usual position is that one spouse has more than the other in terms of both savings and income. Added to this mix are overdrafts, tax liabilities and credit card debts. The court must decide how the net savings and income are to be divided between the two parties. This isn’t always easy to do: there is no set arithmetical formula, and no couple’s case is the same. If you and your spouse cannot agree what is fair, the court will apply guidelines. In many cases, couples cannot live in two homes as comfortably as they did in one home when their income and capital were pooled.
The court will deal with all the family assets such as income (net of tax), capital, house (net of mortgage), all capital assets (net of debt) and any pensions. The court may make interim orders for maintenance. It may make longer term orders for maintenance, either for life or a shorter term. It may order payment of a lump sum of capital, transfer property between the parties (including not only land but shares in a company), vary trust arrangements, make a pension sharing order and in exceptional cases, order one party to pay the other’s costs.
The overall outcome must be fair and reasonable to both parties. The court must consider first and foremost the welfare of the children, and where the children are to live. It must also consider how soon, if at all possible, the financial obligations of one party to the other can be terminated. Is it possible to have a “clean break”, with a lump sum payment? If not, then in order to meet the continuing reasonable needs of the poorer party, the court will make a continuing maintenance order. This can be until considered again by the court or for a fixed term, for life, until remarriage or until the death of the paying party.
Here are some of my most popular posts written for those with questions about divorce and money:
Generally speaking, the financial settlement stage comes as a relief to a divorcing couple. With the figures in place, this is often the point when you can begin to think about the future. If you have reached this stage, whether you are the husband or wife, the wealthier party or the dependent one, there are some key points to bear in mind while the details are finalised. This post examines them.
I asked Nick White, Head of Stowe Family Law’s forensic accountancy department, to provide readers with a rundown of the various sources of funding available, should those readers seek to divorce. There are many different options, each with their pros and cons, so don’t be daunted.
Many divorcing couples don’t want to change what they do. They may go to work or stay at home (or more likely do both), but going forward they don’t see any need to alter their respective lifestyles. So what of the working spouse who bitterly resents how the non-working spouse lives? My blunt advice to such clients usually comes as a surprise.
Among non-lawyers, there is a common belief that marital assets are simply divided 50:50 in a divorce. However it is a mistake to assume that this is always the case. There are still a number of reasons why assets may not be divided equally after a marriage. When the assets include a business or an inheritance, for example, the final outcome can be rather different.
In 2010 the Court of Appeal made a landmark ruling that was described as a “cheat’s charter”. In this lengthy but much-read post, I explore the horrifying implications of the ruling for ordinary divorce cases up and down the country.
If you are struggling with the conflicting and often contradictory jurisdictions of the court and the Child Support Agency, and you want to make provision to minimise the impact and uncertainty of the CSA, consider a contractual solution. It is flexible and enforceable: if necessary, the same remedies are available as for breach of contract.
A Mesher order is a court order that postpones the sale of the marital home and gives a chargeback to one party exercisable on the occurrence of specified events. When there are no children, the court can still make a similar order, called a Martin order, for one party to remain in the marital home and postpone the sale. However these orders can be fraught with difficulties, on both sides…
A Duxbury calculation refers to the method used to work out a “clean break”: a lump sum that can be drawn by a partner as maintenance for the rest of their life. This extract from my bestselling book looks at the Duxbury Tables in action.
Sometimes a spouse will go to great lengths to rack up costs, raise as many obstacles as possible to avoid disclosure and make derisory offers. The aim: to make the other spouse’s life as hard as possible so that those offers become more “palatable” as an end to the protracted saga. This type of behaviour is not uncommon, so here is my advice for those at their wits end.
This post takes a look at what you can do if you find yourself at the receiving end of an application for an order for sale of the matrimonial home, made by a secured creditor such as a bank. The impact of a declaration of bankruptcy is so serious and far reaching in divorce proceedings that it is not unknown for one party to use bankruptcy as a tactic. If the indebted spouse has not been declared bankrupt, statutory guidelines provide some “teeth” with which to challenge the application if the property is jointly owned.
At Stowe Family Law we have our own in-house forensic accountancy department. It means that when clients come to see us, there is no frustrating wait for financial information before we can advise on tactics. Similarly, our forensic accountants can provide advice about the likely value of a client’s business for the purpose of a divorce. This post examines the advantages of having a forensic accountant on board.
If fraud comes to light, a marital settlement could be set aside. Making an allegation of fraud, however, is a serious matter. An incorrect accusation could mean that you have to pay all the legal costs involved, as well as damages for any losses suffered. This posts looks at the steps to take if fraud is suspected, with reference to a leading family law case.
We have hundreds of posts covering these topics, so if you cannot find the information you seek here, please use the search box at the top of the page to explore further.