Financial Settlement on Divorce or Dissolution

When you get a divorce or dissolution this does not automatically terminate the ability of either party to make a claim against the assets of the marriage. These assets can be property, capital, pensions, or Income. Unless you get a court order dismissing these claims either party can make a claim right up until they remarry or die. There have been cases where parties have been divorced for considerable time and have made a claim many years later. This can be messy, expensive in legal fees and best avoided.

Every case is different when reaching a financial settlement after divorce or dissolution. Laws governing distribution of property and other assets are complex and they continuously change. There is no prescribed method for working out how to reach a settlement in these cases

We will strive to achieve the fairest financial settlement for you and your family. We will protect your starting financial position, regarding accommodation and income, whilst working through the process, to prevent your husband/wife/civil partner disposing of any assets. 

​We will ensure full disclosure of all assets, we’ll trace assets not disclosed, and we’ll review the valuation of any assets disclosed whilst negotiating the best settlement for you.

In some cases, we may need to appoint other experts, such as forensic accountants, tax specialists, surveyors and barristers.

There is no standard formula for calculating appropriate financial provision on divorce or dissolution. Instead, the court has a duty to consider all the circumstances of the case and to take into account a range of specific statutory factors set out in section 25 of the Matrimonial Causes Act 1973 (‘the section 25 factors’). Before considering the individual section 25 factors, the court first considers the welfare of any child(ren) of the family under the age of 18.

When considering the section 25 factors, different judges may reach a range of different solutions on identical facts, all of which would be within their judicial discretion. However, a line of cases has established a standard approach to the way the courts consider a given set of facts.

The starting point is that assets accrued during a marriage or civil partnership are divided equally, and the guiding principles applied are ”equal sharing”, ”needs” and ”compensation”.

Where possible, the court seeks to achieve a clean break between parties on divorce or dissolution, so that they are no longer financially dependent on one another.  This is known as a clean break order or a consent order.

The court charges a fee of £255.00 to issue your application for a financial order. However, you may be entitled to an exemption or reduction to your court fees and we will explore this on your behalf.

Periodical payments orders are sometimes known as Maintenance orders.  There are two types of periodical payment orders 1) Child periodical payments, 2) Spousal periodical payments.  This order requires one party to make regular payments to the other.

A secure periodical payments order is similar to a periodical payments order, however the court requires the paying party to secure the amount of the periodical payments against a capital asset such as a bank account.

A lump sum order is used when one party is required to pay a lump sum of money to the other party.  It is commonly used where a property is involved and one party intends to stay in the house, and is therefore required to pay a lump sum to the other party.

A property adjustment order is a decision by the court on how the property will be dealt with.  There are a number of outcomes that the court could:
Property transfer – where the property will be transferred to one of the parties,

Sale – where the property must be sold,

Mesher Order – where the sale of a property is postponed until a trigger event, for example a child reaching the age of 18

Martin Order – where the sale of a property is postponed indefinitely, the party being granted residency is often allowed to live there for the rest of their life, or until a trigger event such as remarriage.

Sometimes there is a need for a court order that was made in the past to be changed, and this is known as a variation of settlement.  There are many circumstances in which a variation of settlement order could be required.  An example of this could be where a periodical payments order was made and the party making the payments loses their job and is no longer able to pay.

A pension can often be a valuable financial asset.  A pension sharing order will define how the pension asset should be split in the event of a divorce or dissolution.  The court will decide what % of the pension value should be given to the other party, and vice versa.  This is then referred to as a pension credit.

This is usually used where both parties can agree on the split of assets, and do not require the court to make the decision on their behalf.  Find out more about consent orders here.

When the court look at any financial settlements between parties their first consideration must be given to the welfare of any children under the age of 18.  After that they use the ’25 factors’ to guide their decision making.  Section 25 factors are not a formula, but a list of relevant considerations.

• The resources available to the parties, both capital and income and extant or reasonably foreseeable.
  • The financial needs of the parties, bearing in mind:
  • their standard of living;
  • their ages and the length of the marriage; and
  • any disabilities.
• In addition, the court must have regard to:
• The respective contributions of each party.
• The conduct of each party (although only in exceptional cases).
• Any benefit either party will lose as a result of the divorce.

(Section 25, MCA 1973.)