Steven Wade is a family law advisor (McKenzie Friend) with nearly 20 years of experience helping people represent themselves in court. Having been through the system personally and supported thousands of others since, he knows what it’s like to face the stress, confusion, and pressure of doing it alone. This blog shares practical insights that empower you to take control of your case — without the legal jargon or the hefty solicitor’s bill.
How do you negotiate a divorce settlement?
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How do you negotiate a divorce settlement?
- Introduction
- What do financial settlements cover?
- Why do I need a financial settlement?
- What about common law spouses?
- What about same sex marriages?
- What’s the point if you don’t have any money or assets?
- What about pre nups?
- What is a clean break?
- Can we just go to court and say what we have agreed on?
- What happens if we don’t agree?
- What factors do the court take into consideration?
- How much will it cost me?
- Conclusion
Introduction
This blog post is for people who are separating from a spouse (not unmarried couples). Married couples are subject to the Matrimonial Cause Act 1973 which outlnes the law concerning marriage and what happens in divorces and financial settlements.
Unmarried couples have different options using different laws – and it doesn’t matter how long they were married either.
It’s important to say that a divorce case (in England and Wales at least) doesn’t deal with financial settlements nor arrangements for children. They’re separate cases that have to be applied for. Neither are financial or child arrangements mandatory, but financial matters are recommended even if you are in agreement with your ex spouse for reasons we’ll go into later in this post.
What do financial settlements cover?
In a word – every aspect of your finances.
They cover all assets (and liabilities). It doesn’t matter:
- Whose name it is in.
- Who brought it into a marriage.
- Who earned it.
- Who spent it.
- Who inherited it.
- What you agreed during the marriage.
When you marry, all assets and liabilities go into the `matrimonial pot’ and are shared. There’s no `my’ stuff and `his/her’ stuff. It’s all shared.
Pre nups can be a way around this, but they are no guarantee (see below!)
Why do I need a financial settlement?
Financial settlements/finance orders are not mandatory.
No one is going to chase you to get one and they’re not a legal requirement. Many people – who have been divorced for years – work on the assumption that their finances and their ex’s are separate.
They’re often wrong.
A divorce on it’s own has no bearing on finances. If you remarry without one you can no longer make a financial claim on your ex partner – and vice versa. But until you do? You’re tied to them and it’s possible for a finance claim to be made.
If you want a guarantee that your ex partner will not be able to claim money from you, you need an order that says so.
What about common law spouses?
In England or Wales, there’s no such thing.
To benefit from the protections and rights of the Matrimonial Causes Act you need to attend a ceremony with two witnesses, an authorised person to register the marriage and to both sign a marriage schedule.
Weddings can take many forms, in religious or secular venues, registered by a wide variety of people.
In the eyes of the law, the crucial part of the wedding is witnesses, an authorised person to register the marriage and the signed married schedule – not any religious or secular ceremony.
Religious people may see the religious component of the ceremony as the important part of the wedding however.
It’s important to point out however that if you were married in another country in accordance with the laws of that country you will be recognised as married in this country.
What about same sex marriages?
Same sex marriages are subject to the same rules and laws as those of different sex marriages. Although same sex civil partnerships are different.
What’s the point if you don’t have any money or assets?
If you don’t have any assets or liabilities you’re right that isn’t much to argue over.
But there often things you may overlook. And not having an order can have an impact in the future if one (or both) of you have assets and/or liabilities that remain joint in nature.
An order can draw a line under any involvement in the future as well as dealing with the current situation if needed.
What about prenups?
Pre nups are often accepted – but they are not a guarantee. The UK courts do recognise them but they can deny any part of one they feel is unfair or if it is felt that a pre nup was forced onto one party against their will, signed while suffering mental health issues or anything else that causes doubt in the mind of the judge making the decision.
If one party alleges that a pre nup was made under these conditions it can drag matters out at great length and expense and is an additional step the court will have to consider when making a decision.
If you want a pre nup, ensure it is done properly right at the start to reduce the chances of this happening; but be aware that it is far from unknown for someone unhappy with the terms of a pre nup after a divorce to claim they were forced into it, etc. in a bid to obtain a more favourable outcome.
What is a clean break?
A `clean break’ is an order that says that no further claim can be made by either party of each other.
Orders can say otherwise. They can include details of spousal maintenance (which is far less common than it used to be), `Mesher’ orders (aka an ‘order for deferred sale’ that meaning the sale of a property can be postponed until a certain time or event such as children reaching the age of 16, 18, etc.), sharing of pensions and others.
Courts are increasingly keen on clean breaks being made to enable both parties to move on with their lives. That said, if it is in the best interests of any children involved and then the parties involved a clean break may not be the best outcome.
Without a clean break it is possible that an order can be `varied’ – which includes increasing spousal maintenance to an ex spouse if they have applied to and convinced the court that a change in the circumstances of the other one warrants it.
Can we just go to court and say what we have agreed on?
Yes. If you agree matters with your ex spouse it is quite possible to go to court with a draft order signed by both of you, asking that it be turned into an order.
A court will look at the order and ensure there is no ambiguity and no loose ends. A judge may want clarification on various parts of it to enable him/her to make an order that is consistent with the law and to ensure both parties are clear and in agreement with everything.
If you’re doing this, it’s important to include every aspect of your finances and to ensure your draft statement is as clear as possible – if the court doesn’t understand it you may be asked to attend a hearing to explain things.
Doing this is the best case scenario – an order made with the agreement of everyone concerned that minimises legal costs as well as time and hearache, wondering what the future holds.
What happens if we don’t agree?
If you don’t agree you should attempt mediation as a first step even if you think it is unlikely to work.
Mediation is not legally binding but a good mediator can draw up a `memorandum of understanding’ – a document that details what has been agreed – that the court can use to draft into an order.
It’s possible if mediation doesn’t work to conduct `round the table’ meetings, attended by you, your ex spouse and your legal representatives (if you choose to use them) to see if an agreement can be reached.
Finally, if this doesn’t work the court can make an order. Please note that financial matters cannot be dealt with until a divorce is underway.
Finance hearings can be long, slow and very expensive – even more than child proceedings. It’s not uncommon for them to drag on for longer than a year if the parties involved aren’t keen to bring matters to a head or their solicitors aren’t on the ball.
The court will need `full disclosure’ of all aspects of your and your financial situation to be able to reach a fair outcome. If all the information needed isn’t at hand to the court progress can be delayed by the court demanding evidence to do so.
You will then need to demonstrate to the court that what you want is fair, in line with the law and workable.
Judges will, helpfully, often give an `indication’ of what they’re minded to order before a (big, long, expensive) trial in the hope that the parties will come to an arrangement rather than attending a hearing that will last a day or longer and swallow up the money being argued about in legal costs.
What factors do the court take into consideration?
The court has a list of factors it will take into consideration if it has to make a decision. They are listed in Section 25 of the Matrimonial Causes Act:
the income, earning capacity, property and other financial resources which each of the parties to the marriage has or is likely to have in the foreseeable future, including in the case of earning capacity any increase in that capacity which it would in the opinion of the court be reasonable to expect a party to the marriage to take steps to acquire;
(b)the financial needs, obligations and responsibilities which each of the parties to the marriage has or is likely to have in the foreseeable future;
(c)the standard of living enjoyed by the family before the breakdown of the marriage;
(d)the age of each party to the marriage and the duration of the marriage;
(e)any physical or mental disability of either of the parties to the marriage;
(f)the contributions which each of the parties has made or is likely in the foreseeable future to make to the welfare of the family, including any contribution by looking after the home or caring for the family;
(g)the conduct of each of the parties, if that conduct is such that it would in the opinion of the court be inequitable to disregard it;
(h)in the case of proceedings for divorce or nullity of marriage, the value to each of the parties to the marriage of any benefit. . . which, by reason of the dissolution or annulment of the marriage, that party will lose the chance of acquiring.
The main consideration is the wellbeing of children (if there are any) and will be the first concern a court will have.
In an ideal world, the court wants ex spouses to agree matters, for an arrangement where everyone leaves with a home, where no one is left in debt and in a position to start again. Sometimes, once all the sums are done, this is not possible.
It’s a sad truth that divorce often causes a drop in a standard of living for everyone concerned because it is often cheaper to run a shared house rather than two separate ones.
How much will it cost me?
The more hearings, the more legal help you get, the more work it takes the more it will cost you.
At a recent legal conference attended by our team it was generally agreed by the professionals there that £10,000 in fees was low and £63,000 wasn’t `disproportionate’.
The court fee for a finance case is £53 if you agree matters with your ex spouse or £275 if you don’t, with there being no upper limit on legal fees if you can’t agree matters.
Conclusion
As always in family law, a good rule of thumb is that things can be as easy and inexpensive as people want to make it – or as hard and costly too.
The best way to get a divorce settlement is amicably – working with your ex spouse in the best interests of the children if you have any, to be fair, generous and working together you can both move on with your lives.
It does happen. People do come to agreements that they may not necessarily like but can live with and feel that is largely fair.
In contrast, divorce settlement can be expensive and extremely painful with people using money as a weapon to hurt an ex spouse and impose arrangements that are going to affect them for a long time. Legal costs can be astronomical.
This post is for informational purposes only and does not constitute legal advice.
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