Overview of Financial Settlements
Financial arrangements are an important part of many divorces and separations. When a marriage or civil partnership ends, there may be property, savings, pensions, investments, debts and income to consider. Reaching an appropriate financial settlement can help provide greater certainty about each person’s position after the relationship has ended.
At SWM Solicitors, we advise clients on financial settlements following divorce or separation, taking account of their individual circumstances and the wider financial position of the family. Our role is to help you understand the issues that need to be addressed, consider the available approaches and work towards arrangements that properly reflect your circumstances.
What is a financial settlement?
A financial settlement is an agreement or court-approved arrangement dealing with the financial consequences of divorce or separation.
The issues involved can vary considerably. A straightforward case may involve a family home, savings and pensions, while more complex cases can include businesses, investments, overseas assets, trusts or significant pension interests.
A settlement may deal with:
- Property and the family home
- Savings and investments
- Pensions
- Business interests
- Debts and liabilities
- Lump-sum payments
- Spousal maintenance
- Other financial resources
The aim is not simply to divide every asset equally. The appropriate outcome depends on the circumstances of the case, including the financial needs and resources of both parties and any children.
Understanding the financial position
Before meaningful negotiations can take place, it is important to establish what each party owns, owes and earns.
This may involve gathering information about salaries, self-employment income, properties, mortgages, bank accounts, investments, pensions and liabilities. In more complex cases, further documentation may be required to understand the true value of assets or income.
Full and accurate financial disclosure is particularly important where there is a substantial difference between the parties’ financial circumstances.
SWM Solicitors can help identify the financial information that should be considered and advise on how it may affect negotiations.
Reaching an agreement
Not every financial dispute needs to be determined by a court.
Where both parties are able to negotiate, financial matters may be resolved through solicitor-led negotiations, mediation or another appropriate form of dispute resolution.
An agreement can then be formally documented so that the parties understand precisely what has been agreed.
Where appropriate, the agreement can be converted into a consent order and submitted to the court for approval. This can give the settlement legal effect and may also deal with future financial claims.
When agreement cannot be reached
There are circumstances where negotiations do not resolve the financial issues.
A financial remedy application can allow the court to determine matters where the parties cannot reach agreement. The process can involve financial disclosure, negotiations, a Financial Dispute Resolution hearing and, where necessary, a final hearing.
The court may consider matters such as the parties’ income, earning capacity, property, pensions, financial resources, needs, responsibilities and the role each person has played in caring for the family.
Court proceedings can be demanding, particularly where finances are complicated or the parties have very different views about the appropriate outcome.
Financial settlements and children
Where children are involved, their needs are an important part of the financial picture.
Housing arrangements, everyday living costs and the financial resources available to each parent may all need to be considered. Child maintenance is generally dealt with separately from the divorce itself, although financial arrangements between parents can form part of the wider discussion.
SWM Solicitors can advise on how financial matters interact with arrangements for children and help identify which issues should be addressed separately.
Pensions and other long-term assets
A financial settlement should not focus only on assets that are immediately available.
Pensions can represent a significant part of a family’s long-term financial resources. Depending on the circumstances, pension interests may need to be valued and considered alongside other assets.
A pension sharing order may sometimes be appropriate, while other cases may require a different approach to achieve a suitable overall settlement.
Why legal advice matters
An informal agreement may appear straightforward but leave important financial claims unresolved.
For example, agreeing who will keep the family home does not necessarily resolve claims relating to pensions, savings or future income. Similarly, agreeing a monthly payment without considering the wider financial position may not provide the certainty either party expects.
Obtaining legal advice can help ensure that the proposed settlement is considered as a whole.
How SWM Solicitors can assist
WM Solicitors advises on financial settlements arising from divorce and separation, including negotiation, financial disclosure, property, pensions, maintenance and formalisation of agreements.
We consider the circumstances of each case rather than applying a standard approach. Where an agreement can be reached, we can assist with documenting the settlement appropriately. Where negotiations have broken down, we can advise on the financial remedy process and the steps involved in court proceedings.
Our aim is to provide clear legal advice while helping you understand the practical consequences of the financial decisions being made.