The Importance of Finalising your Financial and Property Matters in Divorce
If you finalise your divorce and do not go on to finalise your financial and property matters by lodging a Consent Order at the Court, you both run the risk of either party coming back to the other at a future date to make a claim. For example, your Decree Absolute may be granted signalling the conclusion of your divorce. You and your spouse may decide that you have reached agreement yourselves over finances and property and there is no need to lodge any form of agreement at the Court. This agreement is not legally binding and does not prevent either one of you from making a claim against the other some years down the line. The only bar would be if you had remarried. However, if your spouse had not remarried, he/she is not barred from claiming against you. Do you want to run the risk of having to defend against such a claim in the future?
You ought to consider:
1. Property issues
3. Endowment Policies
4. Bank accounts
7. Pension issues
8. Child maintenance and costs for further education, etc.
11. Insurance Policies
12. Future income
13. Business assets
This list is not exhaustive but should serve as a guide as to all the types of financial matters that are important.
It is important to consider and to discuss how you are both going to deal with the financial and property matters.
Mediation and Finalising Financial and Property Matters
Your starting point for finalising your financial and property matters would be for both of you to provide full financial disclosure. It is only possible to begin to make decisions regarding these matters once both of you have seen this disclosure and the procedure is exactly the same whether you carry this out yourselves, through a mediator, through the collaborative process, through your solicitors or through the Court.
Both of you would need to complete a financial statement – the form is available from http://hmctsformfinder.justice.gov.uk and is known as Financial Statement for Financial Order or Form E. The form is quite comprehensive and goes into detail everything that you may possibly own.
Once you have provided full financial disclosure, it is then possible to begin to make decisions between yourselves as to how your assets will be distributed following your divorce.
If you both do not provide full financial disclosure, or something hasn’t been disclosed, you run the risk of having any agreement that you ultimately reach being set aside by the Court.
There is assistance available for dealing with financial and property matters.
At Divorce Nicely, mediation is offered and this is the most cost-effective way of dealing with these matters. Within mediation, having initially been assessed individually for suitability, both parties attend a joint session with the mediator to go through the financial form highlighting what is important and crossing out the irrelevant parts of the form. You will both then go off to collate your financial information and do not have another mediation session until all documents are available. You are in control of this and the mediator will wait until you are both ready.
You then both produce your financial disclosure in the presence of each other and the mediator. This ensures that any discrepancies can be dealt with together there and then with the mediator providing each party with action points to be dealt with prior to the next mediation session.
Once full financial disclosure has been made, the mediator will produce a financial summary detailing all of the disclosure and your income and expenditure. It is at that point that it would be beneficial for you both to take some legal advice so that you can commence your discussions on an equal footing.
At the next mediation session, the mediator can then assist both of you to explore all possible options. This takes place by way of a brainstorming exercise with contributions from both of you. The mediator will ensure that both of you are heard and once all options are out in the open, the mediator can help you both to explore the practicality of each option and to see whether each option is workable. Ultimately, the aim is for both of you to find proposals that each of you can live with.
In addition, at Divorce Nicely you can both be pointed in the direction of other professionals if you need further advice on different matters. For instance: an independent financial adviser specialising in pensions can assist with exploring with both of you the best way of dealing with your pension assets; if you have a business, an independent accountant or valuer may be best-placed to advise on the valuation of business assets on behalf of both of you; and an independent mortgage broker can assist you in determining your mortgage capability and point you in the direction of the best mortgage deal for your particular circumstances.
When you reach a definitive proposal that is acceptable to you both, the mediator will draw up a proposal document (a Memorandum of Understanding) detailing all of the finer detail of your proposals. This document can then be taken to your solicitor to enable them to draw up a Consent Order in a format acceptable to the Court. This will be lodged at the Court providing you with some certainty that neither one of you can make any claims against the other in the future, assuming that all disclosure has been made.
Mediation versus negotiation through solicitors
Contrast this with dealing with your financial disclosure through solicitors. Each of you instructs your own solicitor. Your solicitor requests that you produce your financial information. You provide this in dribs and drabs and your solicitor tells you each time what else they are waiting for. Each telephone call, letter and contact escalates costs.
Your solicitors then go through the financial disclosure raising any issues with each of you if there is anything missing. Your solicitor then raises any issues with your spouse’s solicitor for any missing information. All of this takes a lot of time and the costs are increasing with each letter and telephone call.
Once financial disclosure is complete, your respective solicitors then begin negotiating with each other, each time keeping you informed of what is going on, charging for each time they contact you, each time they have to chase the other solicitor – it is little wonder that costs significantly increase through this procedure.
If you and your spouse are able to deal with these matters through the assistance of a mediator, your costs will be much, much less than dealing with matters through solicitors. In fact, mediation fees between you are usually less than solicitors’ fees for one of you.
If you wish to consider your financial and property matters through mediation, please contact me, Cathy O’Mahoney, of Divorce Nicely on 01304 800002 or 0797 4820739.