The breakup of a marriage is naturally a stressful time which can have far-reaching impacts. We asked a panel of expert family lawyers about the separation process and the alternative options to divorce. Here, James Carter, Solicitor at Goughs Solicitors, shares his knowledge…
1) I want a divorce. What do I need to consider in respect of… Housing?
If you own your family home, as opposed to rent, it may well be the largest asset in the marriage, and how to deal with it will likely be central to your separation. There are various options:
- You could sell the home and split the proceeds. Each of you could then buy or rent, a new property – much will depend of course on how much money you get from the sale, and your relative mortgage capacities;
- The property could be transferred outright to one of you. The party taking sole ownership may have to pay a lump sum for the other’s share in the equity;
- If necessary, one of you could remain living in the home for the time being, perhaps until the children reach 18 or finish their education. Whoever leaves the home at the time of separation could retain an interest in the property to be realised when the property is finally sold or the other party can afford to buy them out.
Many couples will own the family home in joint names with a joint mortgage, and this will also need to be taken into account – for example, under option three above, it would be preferable for the party staying in the home to have the mortgage transferred into their sole name, but that won’t always be possible.
If you rent the family home, the options available to you may depend on what type of property you rent – private or social – and whether the tenancy is in one party’s sole name or joint. It can be possible to transfer a tenancy from one party to another, or for one tenant to be removed from a joint tenancy; whether such steps are advisable or even possible will depend on the individual circumstances.
If you live in Service Family Accommodation, there are special rules that apply in the event of a separation and these can have a huge effect on both the the service personnel and their ex-partner’s housing entitlement. The DIO Loss of Entitlement Team can offer specialist guidance and support.
Naturally, as a parent going through a divorce, your first concern will be the possible effect your separation will have on the children. This applies both to how they will be affected by the financial changes which come with separation, as well as the inevitable changes in how and when they get to see each of their parents.
When considering what to do with the family home or how to divide the other assets, the children should always be your first consideration, and indeed, if court proceedings become necessary in respect of your financial settlement, the court itself will make the welfare of the children its first consideration in determining how property and assets should be dealt with.
When it comes to agreeing the children’s new living arrangements and the days they will get to spend with each parent, putting the children first also means putting aside any acrimony that exists between you and your ex-partner. It is far better for children when their parents remain civil and don’t talk each other down out of lingering bitterness.
Indeed, parents are always to be encouraged to come to sensible agreements directly, but if arrangements cannot be agreed, there are various ways of resolving disputes, such as Mediation or negotiating through solicitors. As a last resort, the court does have the power to determine disputes over with whom the children should live, or the times and days they will spend with their ‘non resident’ parent. The court can also rule on specific issues such as where and how the children are to be schooled. Of course, court proceedings may lead to further stress, confusion and upset for a child who has already felt the effect of his or her parents’ separation, and so really are to be seen as a last resort.
When considering what might be a fair and reasonable overall financial settlement, each party’s pension (or lack of one) will often be another key consideration. Your pension may well be your most valuable asset, or at least it will be when it comes into payment, and whether and how it should be accounted for in a financial settlement may be a substantial point of negotiation.
Broadly speaking, when pensions do come into play, there are three options available. The most straightforward option may be to “off-set” the value of the pension against the other assets in the marriage. For example, a party might agree not to pursue a pension claim in return for receiving a larger share of the sale proceeds of the family home. The second option lies in “pension attachment orders”. Here, when a pension is in payment, an amount is diverted to be paid not to the pension member but to their ex-spouse.
For various reasons, attachment orders are now rarely made, and have to a large extent been superseded by the third option: “pension sharing orders”. Here a specific percentage of the pension member’s rights are essentially broken off and transferred as a separate entity to the ex-spouse, creating an entirely new pension in their favour.
Of course, whichever option is finally adopted, it is necessary to be able to value the pension and weigh it against the other assets in the marriage. While pension schemes can provide their members with a notional “Cash Equivalent valuation”, this is a fairly rough and ready figure, and it can be advisable in more complex cases to employ an actuary to advise on valuations.
As above, there are various options available when dealing with housing and pensions. But what is the general approach to overall financial discussions and how is a settlement best achieved?
The terms of settlement are usually agreed following a disclosure process in which each party provides to the other information as to their financial circumstances. A settlement can then be agreed based upon the information provided, either through solicitors or a mediation process. If an agreement cannot be reached or if there is a good reason for doing so, court proceedings can be issued. However a settlement is obtained, its structure is usually based on what a court would have been likely to decide in those circumstances.
The most important factor in consideration will be the welfare of any children. All other relevant circumstances would then be considered, including the financial resources of each party, their ages, the length of their relationship, their earning capacities, the standard of living enjoyed in their marriage, and each party’s contributions.
In terms of capital, the starting point is that there should be a broadly equal division between the parties, but that division can swing in one party’s favour for a number of different reasons. The most common is to ensure that their needs are met; in fact, the majority of settlements are determined by the financial needs of each party (and in particular how any children affect those needs). For example, as above, when deciding what is to be done with the family home, there are various options available. The choice made will largely be determined by which is the best method of meeting your needs, i.e. rehousing you both securely, following the separation.
2) Why should I use a solicitor to oversee my divorce?
There’s a lot at stake and you don’t want to get it wrong. Not knowing your rights or to what you are legally entitled upon separation may end up being very expensive – emotionally as well as financially. The divorce process can be daunting, technical and stressful, and finding your own way through that process, with the added risk of things going badly wrong, is likely the last thing you need during what is probably going to be a difficult and crowded time in your life.
In respect of your financial settlement, getting expert legal advice on what, realistically, would be a fair settlement for you is crucial, and the reassurance you get from knowing you are not losing out can be invaluable. Dealing with court paperwork, following legal procedure, calculating division of assets… it can be difficult and detailed work. You will spend a significant amount of time, energy and emotion on getting a resolution. Faced with that, the cost of instructing a solicitor should be seen as a wise investment.
3) How long does the process take and what can I expect to pay in solicitors’ fees?
The person who starts the divorce proceedings will pay the court fee of £550 and their solicitor’s costs in preparing the paperwork. However, that person will often seek a contribution or even payment of all of those costs from the other party. Any contributions can be agreed prior to the divorce petition being sent to court.
As long as the divorce proceedings are not defended (defended divorces are extremely rare), the process is largely administrative and there is no need for anyone to attend court. Typically, an undefended divorce can be finalised within four to six months. However, it is common to wait until a financial settlement has been agreed before the divorce is finalised.
It is much more difficult to estimate the costs and timescales in relation to financial matters as ultimately much depends on the approach each of you adopt and the stage at which you reach settlement. If you agree a settlement directly with your spouse, the costs of implementing that agreement in a court order may be around £750 plus VAT. Going through financial disclosure and then negotiating a fair settlement may cost in the region of £2,000 to £4,000 plus VAT. If court proceedings are necessary, costs typically range from £3,000 to £10,000 – providing further incentive to try and resolve things as amicably as possible, outside of the court process. In terms of timescales, as a rough guide, the majority of financial settlements are agreed within 6 to 12 months.
4) Other than divorce, what options are open to us?
Lots of marriages run into difficulties at one time or another but often enough such problems can be worked through. If there are problems, you may wish to consider couple’s counselling, family therapy or mediation. Such options are much less intimidating than they might sound and can be very worthwhile if both parties truly commit to them. Relate is the country’s largest provider of relationship support and can assist across a wide range of relationship problems. If you are not 100% certain that your marriage or relationship has broken down once and for all, such options really can be of benefit and are worth investigating further. If you are considering giving it another go, or are simply looking to secure certainty for the unknown future, you could consider entering into a “post-nup”. Such an agreement would define how the marital assets would be divided should the relationship ultimately fail.
Even if you have decided that a permanent separation is necessary and inevitable, it is not automatically the case that a divorce is the logical next step. For example, there may be personal or religious reasons as to why a couple would not want to seek a divorce. In such circumstances they would be able to enter a separation agreement to determine how they shall live apart and the division of the marital assets, but the marriage itself would not be dissolved. Similarly, they may seek a Judicial Separation rather than a divorce – this is an order made by a court which releases a married couple from their duty to live together but does not formally dissolve the marriage.