Finance settlements within divorce proceedings
When a relationship breaks down, you and your spouse will need to decide how your matrimonial assets will be divided. These discussions may be difficult, so it’s important that you understand your legal rights before making any decisions. Whatever your situation, Kew Law is here to support you. We’ve put together this guide to help you understand the options available to you and talk you through the different stages of the financial settlement process.
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When a relationship breaks down, you and your spouse will need to decide how your matrimonial assets will be divided. These discussions may be difficult, so it’s important that you understand your legal rights before making any decisions. Whatever your situation, Kew Law is here to support you. We’ve put together this guide to help you understand the options available to you and talk you through the different stages of the financial settlement process
Kew Law can assist you with an initial fixed-fee interview. During that meeting, we will talk you through the options available to you. This will be a useful information-gathering exercise that will assist you in future negotiations and discussions.
1. What is a Financial Order?
- What happens if a financial agreement has been reached?
- What happens if a financial agreement cannot be reached?
- The Duty of Full and Frank Disclosure
A Financial Order is a type of Court Order that details how your assets will be divided within your divorce proceedings. Once you have obtained a Financial Order, the arrangements are legally binding.
Application for Divorce Process
Draft Application for Divorce
- Only one ground for divorce (irretrievable breakdown of the marriage).
- The Court will require a copy of your marriage certificate or a certified copy of your marriage certificate, should the original be lost.
- In the event that your marriage certificate is in a different language, it will need to be translated into English.
Writing to your Spouse
- As part of the fixed fee offered, we will correspond with your spouse (via email and post) enclosing a copy of the draft application for their approval.
- We do not require a response from your spouse, but one will be requested.
Lodging Draft Application with the Court
- Application is lodged with the Family Court via the HMCTS Portal (unless specified otherwise).
- Court fee of £593 is paid.
- Copy of original or certified marriage certificate is uploaded.
Issued Application for Divorce
- Normally received anywhere between 7-28 days after being lodged with the Court.
- The Court will send a copy of the issued application to your spouse directly by email and again soon after by post.
- Your spouse will receive an Acknowledgement of Service that will need to be completed within 14 days from the date of the issued application.
- You have 20 weeks from the date of the issued application before you can proceed to apply for a Conditional Order (previously known as a Decree Nisi).
Writing to your Spouse
- As part of the fixed fee offered, we will write to your spouse further enclosing a copy of the issued Application and Notice of Proceedings by way of confirmation.
- We will confirm that date in which your spouse will need to respond to the issued application.
- The correspondence to your spouse will be sent by email and by post.
During the 20 Week “Cooling-Off” Period
- Any issues with service will be explained to you by your solicitor, with viable options proposed.
- During this period, it is important that you settle your finances with your spouse before proceeding with a Final Order (previously known as a Decree Absolute).
- Please speak to your instructed solicitor should you wish to finalise your financial matters for more advice.
Conditional Order
- Previously known as a Decree Nisi.
- A Conditional Order can be applied for after the end of the 20-week cooling off period.
- Six weeks from the date of the Conditional Order you can proceed to a Final Order.
Financial Order
- During the period between a Conditional Order and Final Order, you will be advised to lodge with the Court the draft consent order confirming your settlement with your spouse.
- If you do not wish to proceed with financial matters, you will be required to sign a written Disclaimer.
Final Order
- Previously known as a Decree Absolute.
- A Final Order can be applied for 6 weeks from the date of the Conditional Order.
- Only when a Final Order is obtained is your marriage formally dissolved.
What happens if a financial agreement has been reached?
You and your spouse may have already decided how to divide your matrimonial assets and are happy with the agreement you’ve reached. However, this will not be legally binding unless it is incorporated into a Financial Order. Without a legally binding Financial Order, either party can change their mind at any time in the future, even if you have already divided the assets/spent the money.
If you are contemplating divorce proceedings, the agreement can be incorporated into a Financial Order. Kew Law will draft the Order on your behalf, with the associated legal documents. This will be sent to the Court for approval on the pronouncement of the Decree Nisi/Conditional Order within the divorce proceedings. The draft Financial Order, often referred to as a draft Consent Order, will then be sent to the Court with the consent of both parties.
Financial Proceedings Process (Uncontested)
Reaching an Agreement with your Spouse
- If you have reached an agreement voluntarily, you will need to inform us of the full details of the agreement reached. We will write to your spouse before proceeding to ensure they agree to the same.
- If an agreement is reached through mediation, you will need to provide us with a copy of your Memorandum of Understanding or any documents received confirming the settlement reached.
Preparing the Financial Documentation
- Once an agreement has been reached, we will convert the agreement into a draft Consent Order and partially complete the Form D81 (detailing your assets, liability and income).
- We will draft any additional documentation required, such as a Pension Sharing Order.
- We will advise you full on the draft Consent Order, Form D81 and any additional documentation required.
Arranging Completion of the Documents
- Once you have approved the necessary documents we will arrange for the copies to be sent to your spouse or their legal representative if legally represented.
- If your spouse is not legally represented, we will suggest they seek independent legal advice before completing any documentation provided.
- Once your spouse has signed the documentation, you can either attend one of our offices to sign the draft Consent Order or we can send a copy in the post for you to sign and return.
Lodging the Draft Documentation with the Court
- Once all documents are signed they will then be lodged with the Court for approval (normally the Court will approve the documents within 4-6 weeks).
- You will need to provide a copy of your Decree Nisi (Conditional Order).
- You will be liable for the Court fee of £58 (unless agreed between you and your spouse to split the fee or you qualify for a fee exemption).
- The Court may ask queries regarding your settlement and any questions will be answered swiftly as possible.
Court Sealing
- Court will provide an Approved Consent Order. Documents will be provided to you promptly and deadlines for any payment etc. will be made aware to you.
- Once your financial settlement has been approved by the Court, you can then apply for a Decree Absolute (Final Order) to dissolve your marriage.
It is important that you provide financial disclosure so that our solicitors have full sight of all assets, liabilities, and income. This is so that we can advise you on the fairness of the agreement you have reached and determine whether it is in your best interest.
What happens if a financial agreement cannot be reached?
If you have not reached an agreement with your spouse, Kew Law can assist you in the following ways:
- As a third party with the benefit of financial disclosure, we can recommend a fair financial agreement. This will give you a foundation to begin discussions with your spouse.
- We can write to your spouse and negotiate either directly with them or their solicitor. It is hoped that if both parties are legally advised and have a good understanding of how the Courts’ approach, an agreement can be reached rather than incurring unnecessary legal costs in taking the matter to Court.
- Another alternative is for the parties to attend mediation. Mediation can be a very effective way of dealing with disputes between parties. We will refer you to a trained mediator and advise you during the process.
If an agreement can be reached, we will assist you with incorporating the agreement into a legally binding Financial Order.
If an agreement cannot be reached through negotiation or mediation, we will need to make an application to the Court for financial proceedings. An application can be made to the Court if divorce proceedings or judicial separation proceedings have been issued.
The Duty of Full and Frank Disclosure
Whichever route you use to achieve agreement, there should be full and frank disclosure of the matrimonial assets. This means that you and your spouse are under a continuing duty to disclose the full and frank details of your financial position. You should give full details of your income, outgoings, and capital to your spouse, and they should provide you with the same information. This duty also includes any likely future changes in your position. The duty of disclosure is ongoing so that if anything changes before a Financial Order is made, you are obliged to disclose this as well.
2. Financial Proceedings: Applying to the Court
Issuing Financial proceedings does not mean that negotiations must stop; Kew Law will continue to try and negotiate a settlement throughout the process. The Court will timetable your case so that the matter can move forward. In some cases, an agreement is reached at the first hearing. Where this is not possible, the case will progress to a financial hearing and thereafter a final hearing where a Judge will make an Order distributing the assets, liabilities, and income between the parties.
Financial Proceedings Process (Contested)
Lodge Application with the Family Court
- Court fee of £303.
- Completed Form A.
- MIAM Certificate (if not exempt).
Notice of Proceedings
(Typically 4-6 weeks from the date of lodging the Application with the Court)
- Confirmation of time/date for First Appointment.
- Confirmation of date of exchange of Form E’s, Chronology, Statement of Issues, Form G and written Questionnaires.
Exchange of Form E’s
- Typically, 5-7 weeks prior to the First Appointment Hearing.
Exchange of Additional Documents
- Typically, 3-4 weeks prior to the First Appointment.
- Additional documents will include written Questionnaires, Chronology, Statement of Issues and Form G.
First Appointment Hearing
- Court will consider the Form E’s and additional documents further.
- If a settlement cannot be reached then a First Dispute Resolution (FDR) will be listed (approximately 4-6 months after the First Appointment Hearing taking place.
Common Directions by the Court
- Exchange Answers to Written Questionnaire (normally 4 weeks after the First Appointment Hearing).
- Exchange of Property Particulars (normally five for yourself and five for your spouse).
- Exchange of Mortgage Capacity Evidence.
- Exchange of Proposals for settlement.
- Each case is unique and there may be further directions made by the Court dependent on the circumstances.
Further Exchange of Financial Disclosure
- Court will direct for updating further financial disclosure regarding original documentation disclosed within original Form E (normally 4-5 weeks prior to the FDR Hearing).
FDR Hearing
- Court will consider case further in light of the further financial disclosure.
- The Court will give an indication as to a fair settlement in the event that matters cannot be resolved and a Final Hearing will need to be listed (normally 6-9 months from the FDR Hearing).
Common Directions by the Court
- Exchange of Section 25 Statement (normally 4-5 weeks prior to the Final Hearing).
- Exchange of updating financial disclosure.
- Exchange of further documentation that will assist the Court when considering a Final Order.
Further Exchange of Financial Disclosure
- Court will direct for further updating financial disclosure regarding financial documentation disclosed prior to the FDR (normally 4-5 weeks prior to the Final Hearing).
Final Hearing
- The Judge presiding over matters will be different from the Judge who attends the FDR Hearing.
- Hearing will typically last for 1-3 days but will be dependent on the complexity of the matter.
- The Court will consider the entirety of the financial disclosure and information and make a Final Order.
- Once a Final Order has been made by the Court, a Decree Absolute (Final Order) can be obtained and the parties will implement the Order.
- In divorce proceedings, each party can apply to the Court for financial relief and the following Orders:
- Periodical Payment Orders: The Court can order one spouse to pay the other spouse payment out of their income. This includes maintenance pending suit.
- A Property Adjustment Order: For example, to transfer property from the joint names into one party’s sole name.
- A Lump Sum Order: The payment of a lump sun or lump sums by one party to the other.
- Pension Share and Attachment Orders: These are Orders made by the Court to provide a pension fund, to transfer part of the fund to the other spouse, or pay part of the pension income to the other spouse.
- Orders for Sale: For example, the sale of the family home.
Child Maintenance orders are often dealt with by agreement or by applying to the Child Maintenance Service. However, it can be possible to include them in a financial order for a limited period.
3. Financial Proceedings: The Court Process
When an application is made to the Court, the Court will timetable the case as follows:
- The Court issues a Notice of Application and lists a First Appointment. This will be the first hearing at Court and is usually made 12 to 14 weeks from the date the application is issued.
- 35 days before the First Appointment, both parties are required to complete a financial statement (known as Form E) and file this in Court with full supporting documentary evidence. A copy of this document must also be sent to your spouse/spouse’s solicitors.
- 14 days prior to the First Appointment, both parties are required to set out what they believe to be the main issues in the case in a document known as a Statement of Issues. They must also complete a questionnaire to determine whether any further information or documents is required of the other party’s financial statement.
- Finally, each party must prepare a chronology detailing the significant events in the parties’ relationship.
When both parties have all the information they require, they can apply to the Court for the First Appointment to be treated as a Financial Dispute Resolution hearing. If the parties do not have all the requisite information, the District Judge will make a number of directions to prepare the case ready for the Financial Dispute Resolution hearing and set a date for that hearing.
Financial Dispute Resolution Hearing
The Financial Dispute Resolution hearing, known as the FDR, is an opportunity for both parties and their legal representatives to try and reach an agreement with the assistance of the District Judge. The District Judge will listen to a summary of the legal issues from both parties’ solicitors and consider settlement from each side. They will then give their opinion on how the case should be dealt with. Often, they will give the parties another opportunity to see if an agreement can be reached. If an agreement is reached, the District Judge will make an Order by Consent. If an agreement cannot be reached, the matter will be set down for a Final Hearing.
Final Financial Settlement Hearing
A District Judge with no previous involvement with the case, and no knowledge or any prior offers to settle, will preside at the Final Hearing. They will listen to evidence from both parties and have the power to make an Order without discretion. Both parties are open to negotiating an agreement right up until the Final Hearing commences.
4. How Does the Court Divide Matrimonial Assets?
The Court will consider all the circumstances of the case, including the following checklist of factors, set out in the Matrimonial Causes Act 1973, Section 25:
- The income, earning capacity, property, and other financial resources which each spouse has, or is likely to have in the foreseeable future. In the case of earning capacity, this can include any increase that, in the opinion of the Court, it would be reasonable to expect a person to take steps to acquire.
- The financial needs, obligations, and responsibilities each spouse has or is likely to have in the foreseeable future.
- The standard of living enjoyed by the family before the breakdown of the marriage.
- The ages of each spouse and the duration of the marriage.
- The contributions which each spouse has made, or is likely to make, in the foreseeable future to the wealth of the family, including any contribution by looking after the home or caring for the family.
- Any conduct which, in the opinion of the Court, it would be inequitable to disregard.
- Any benefits which one spouse will no longer acquire because of the divorce i.e., pension provision.
The Court will also consider whether the parties have entered into any pre-nuptial or post-nuptial agreements. The District Judge has very wide discretion as to the Order they can make. This discretion can make it difficult to predict the precise outcome; however, solicitors with full information should be able to give you a good idea of how the Court will look at your case, and what would be a fair settlement.
5. How We Can Help
Whatever your circumstances, our friendly and experienced family law team are here to provide the legal support you need and help you achieve a fair settlement. Though this won’t be an easy process, we will do all that we can to ensure that your case progresses as smoothly and swiftly as possible. We do not wish to make matters more difficult than they already are, and so will always endeavour to negotiate and conduct your case in an amicable and non-contentious way.
Contact a member of our team today to arrange your initial consultation.
This content is provided free of charge for information purposes only. It does not constitute legal advice and should not be relied on as such. No responsibility for the accuracy and/or correctness of the information and commentary set out in the contents, or for any consequences of relying on it, is assumed or accepted by Kew Law LLP.
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Whatever your circumstances, our friendly and experienced family law team are here to provide the legal support you need and help you achieve a fair settlement.
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Rebecca Antoniou
Partner
Francesca Brown
Solicitor
William Brown
Solicitor
Carolina Colli
Senior Associate (Solicitor)