For Richer For Poorer
Published: 29 May 2015
Till Death Do us Part...
Perhaps, in modern society, the above wedding vows should be looked at with a certain degree of caution and realism.
One should never underestimate the stress and emotional trauma caused by a matrimonial breakdown. In many cases, the situation is compounded by the arguments, delay and uncertainty that estranged couples have to endure in order to reach a decision on the division of income and assets.
Is There Any Set Way of Dividing Assets?
It is important to note that every case is unique and in fact that there is no rigid set formula used by the courts for calculating the division of income and assets. Essentially, the objective of any financial settlement will be to provide a customised agreement which is both flexible and fair to both parties.
The financial settlement will set out the agreement that has been reached on a wide range of issues including the division of assets ie: property, investments, businesses, pensions, trusts as well as the couple’s individual incomes and potential future earnings. Such agreements will also cover related issues such as transfers of property, spousal maintenance, financial support for the children and pension sharing. In some complex cases, they may involve discussion regarding share transfers and division of offshore assets.
In essence, the focus of the agreement will be upon the division of assets, and spousal maintenance together with the element of child support. The aim is to reach an agreement that is fair, reasonable and workable to meet the future needs of the couple and their children.
Clearly, the process of negotiating a financial settlement is very complex and daunting due to the wide range of complicated financial issues upon which both parties have to reach an agreement. The process is made even more difficult due to the inconsistency and variation in the application and interpretation of the law in dealing with financial settlements.
In addition, as English courts require full and frank disclosure from both parties, difficulties often arise due to arguments about the sharing and disclosure of financial information such as personal income, business interests, expenditure, capital needs, identification of assets and shareholdings. During the negotiation process, disputes often arise as to whether or not assets should be recognised in law as "matrimonial" or "non-matrimonial". Basically, to decide whether the assets were obtained prior to the marriage, following the couple’s separation or were in fact family gifts or an inheritance. This, in turn, will have legal implications upon how such assets will be divided and in what proportion between the parties following their divorce.
In the majority of cases, there may be insufficient financial means and assets present to enable the couple to sever all ties: a "clean break" solution, as it were. Therefore, in the absence of a set formula applicable to such cases, a 50/50 division can only be realistically considered as an initial starting point for negotiation with the likely inclusion of spousal and child maintenance within the final settlement.
The importance of acting prudently with regards to financial issues at the time of divorce was perhaps highlighted by the very recent publicised case of Kathleen Wyatt and Dale Vince, in which the Supreme Court decided to reinstate financial support for a millionaire’s ex-wife 18 years after the actual divorce. Unfortunately, the couple did not enter into any financial agreement when they separated all those years ago.
Clearly, this case brought to our attention the numerous financial dangers and risks that linger on and haunt divorced couples if they fail to resolve financial issues formally at the time of their divorce. Failure to resolve these issues may have legal implications regarding the wealth that one party may accumulate in the years following the divorce. Such issues of "post separation accrual" have increasingly come to the attention of the courts in recent years and appears to be a growing and significant trend.
In conclusion, the process of negotiation and agreement regarding financial settlements is very complex and can potentially be a long and arduous journey for anyone going through divorce. However, as with any journey the first step is perhaps the most important step to take. And seeking the guidance and advice of a family solicitor should be considered such a step. This is where our team of Family lawyers at Fletcher Day can help. We will gladly and expertly assist you throughout the process of reaching a financial settlement following divorce.
For more advice and information on the above, please contact Eugene Fan - Solicitor in our Family Law Team. For specific advice and information on any divorce mater please contact Eugene Fan or Dee Douglas.
The contents of this article are intended for general information purposes only and shall not be deemed to be, or constitute legal advice. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of this article.