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Divorce proceedings can be overwhelming when it comes to the division of assets and financial obligations. For many individuals, especially those from different nationalities, there is a common misunderstanding about the process of financial separation in England and Wales. In this article, we will discuss key aspects of financial settlements in divorce proceedings and the practical considerations that clients must be aware of.

The Divorce Process: Understanding Financial Implications

At IMD Solicitors LLP, we deal with a wide range of family law cases, including divorce, finances, children proceedings, and injunctions, such as non-molestation and occupation orders. A frequent source of confusion among clients is the distinction between divorce and the financial settlement process. In England and Wales, divorce solely ends the legal marriage between the parties but does not automatically resolve financial matters between them. This is where for many clients from abroad things may seem confusing. In some countries, divorce proceedings also cover the division of assets, but in England and Wales, the financial aspects of a divorce must be separately addressed.

After the divorce is finalised, spouses may still be able to bring financial claims against each other. This is why IMD Solicitors LLP strongly advises clients to deal with their financial issues as part of the divorce process. This allows for a more comprehensive and secure conclusion to the separation of the marital relationship.

Settlement Outside of Court: Encouraging Amicable Resolutions

One of the primary goals in divorce cases is to avoid lengthy and expensive court proceedings, and where possible, we encourage our clients to settle financial matters outside of court. The courts themselves also require parties to attempt to resolve their financial disputes amicably. This includes evidence of efforts made to settle matters through mediation or negotiation.

Financial separation can be reached through various methods such as private negotiations, using the assistance of family mediators, or through the guidance of legal representatives. If an agreement is reached, it can be formalized through a consent order. A consent order is a legally binding agreement that replaces a financial order from the court, ensuring that both parties are legally protected. This route is often quicker and less stressful than court proceedings, and it is also less costly.

The Court’s Role: Financial Orders and Dividing Assets

In cases where an amicable agreement cannot be reached, the final recourse is for the court to determine how assets should be divided between the parties. It is important to note that there is no standard formula for dividing assets in divorce cases. The court’s approach is to consider all the circumstances of the case, taking into account a range of statutory factors set out in the Matrimonial Causes Act of 1973. These factors include, but are not limited to:

• The Welfare of Children: The welfare of any children involved is considered the most important factor by the court. Their needs and the effect of any financial order on them will be a key consideration in the division of assets.
• Financial Needs: The court will assess the financial needs of each party, taking into account their standard of living during the marriage, and their financial needs moving forward.
• Length of the Marriage: The longer the marriage, the more likely the court will seek to ensure a fair and equal distribution of assets.
• Age and Health of the Parties: The age and health of each spouse are also relevant factors, especially if they are approaching retirement or have health issues that affect their ability to support themselves.
• Contributions to the Marriage: The court may consider the contributions made by each party, whether financial or non-financial, including caring for children or homemaking.
• Conduct of the Parties: While the court can consider the conduct of each party in exceptional cases, this is not usually a deciding factor unless the conduct has a direct impact on the marriage or assets.

The main objective of the court is to achieve a fair division of assets, balancing the needs of both parties and ensuring that the financial provision is fair for both sides.

Key Financial Considerations Post-Divorce

Even when there are no significant assets to divide, it is essential for individuals going through a divorce to seek legal advice regarding financial separation. There may be joint debts, pension entitlements, or other financial matters that need to be considered. Failing to properly address these matters can have significant consequences later on, especially if one party acquires assets or makes financial changes post-divorce.

At IMD Solicitors LLP, we also guide clients on issues related to spousal maintenance and child maintenance, which can be vital aspects of financial settlements. However, it is important to note that child maintenance is generally a separate issue from the division of assets and will not usually be addressed during the financial division of the divorce. Nevertheless, it is important for individuals to understand their ongoing obligations and to ensure these matters are resolved appropriately.

The Importance of Proper Legal Guidance

In any divorce, particularly one that involves assets, businesses, or significant financial changes, it is imperative to seek expert legal advice. Changes such as acquiring property, starting a business, or other major financial decisions made during or after a divorce can complicate financial settlements. Without proper advice, these changes can have devastating financial consequences later.

Many clients mistakenly believe that financial matters need only be addressed if there are assets to divide. However, even when the assets are small or seemingly uncomplicated, failure to settle financial issues can lead to disputes even after divorce.

Conclusion  

Divorce is an emotionally and financially complex process. At IMD Solicitors LLP, we ensure that all our clients are properly advised on their financial obligations and rights during and after divorce proceedings. Whether it involves mediation, drafting a consent order, or seeking a financial order from the court, having clear legal guidance is critical in achieving a fair and lasting resolution.

For anyone considering divorce, the advice from experienced family law solicitors is crucial to ensuring the separation of financial ties is handled in a manner that secures the future of all parties involved.

This article is for general information only and does not constitute legal or professional advice. Please note that the law may have changed since this article was published.

To find out more about our services, visit Financial issues and settlements section of our website.

Call us now to discuss your case 0330 107 0107 or email us at info@imd.co.uk.