Concept for -Finances on divorce - when should I start to think about finances?

It is never too early to start thinking about your finances if you are separating from your partner, or you are considering parting ways in the future. This, coupled with taking early legal advice, should stand you in good stead when trying to agree a way forward.

The process of getting divorced and agreeing a financial settlement are essentially separate issues but are intrinsically linked. Whilst issuing a divorce application is one of the first formal steps taken, you do not have to wait until this is done before considering your financial position.

It is usually the case that a financial settlement is concluded before a divorce is finalised, but this is not always necessary.

Understand your finances

The first stage of any case is to assess what is in the “pot”. As such, it is important that you get to grips with what both you and your spouse or partner each have by way of financial assets and liabilities, held both in your sole names or jointly. This can include, for example:

  • Properties and associated mortgages;
  • Bank account and investment balances;
  • Credit or store card information;
  • Business or trust assets;
  • Pension cash equivalent values;
  • Information about income sources.

You should also give consideration to what you would need financially following separation, both in terms of your monthly outgoings (including for any children) and in relation to capital (i.e. how you would house yourself).

It is helpful to start to prepare a list or spreadsheet of the relevant details, collate bank statements and request information such as your pension cash equivalent values at an early stage. Make enquiries of relevant financial providers or estate agents to assist you in gathering the necessary information. The more understanding you have, the easier it is likely to be to make decisions and proposals about your financial future.

Early legal advice 

It is important to take advice from a family law solicitor as soon as possible so that you can make informed decisions about how to move forward. We can help you understand the various ways you can look to agree financial matters on separation, which include:

  • Direct discussions and negotiations with your spouse;
  • Mediation (including solicitor-supported mediation);
  • Solicitor negotiation;
  • Collaborative family law;
  • Private FDRs / Arbitration;
  • Financial Remedy proceedings at court.

Court proceedings are always a last resort, but are sometimes necessary if your spouse is not cooperating with providing financial information, hiding assets from you, delaying matters, or simply not engaging.

We can advise you in relation to processes, procedures, settlement offers and potential outcomes, so that you know what to expect and plan how to move forward.

Always get a financial consent order

If you and your spouse decide to divorce, it is vital to deal with what will happen to your finances. Any agreement reached between you should be recorded in a financial consent order and submitted to court for approval. Once approved, this leaves you with a binding and enforceable agreement, and prevents either party claiming from the other financially moving forward.

How we can help with finances on divorce

If you are considering or are in the process of getting divorced, we can help you with bespoke initial advice and can support you throughout your divorce journey, whichever route you choose to take. Contact our Family team to discuss how we can help you.