Richard Bebb, Partner and Head of Armed Forces Sector at Goughs Solicitors, discusses the financial ins and outs of divorce…

Who should be paying for what in the immediate aftermath of a break up?
The only rule of thumb is that the law expects both spouses to contribute according to their ability to do so. If a couple separate, one may also be responsible for making child support payments to the other. Every situation is different, and you should take specialist legal advice tailored to your own position to make sure that you are not paying more, or receiving less, than you should. Of course, separation can place considerable financial pressure on a couple, because there are now two households to run. If necessary a divorce court can rule on how much, if anything, one spouse should pay the other in the short term, based on essential needs and ability to pay. This is called ‘maintenance pending suit’ and, again, you should seek legal advice if this is a problem in your situation.

What is ‘financial disclosure’ and what information am I and my partner expected to share?
In negotiating finances arising from divorce, the law expects each person to ‘put all their cards on the table’ and be fully transparent about all their financial circumstances, supported by documentation. That’s what we call ‘disclosure’. Good family lawyers always advise their clients to ensure this is done because, without it, there can be no certainty about each person’s finances, and the lawyer can’t provide reliable advice. A good example (which has actually happened in more than one of our cases) is one person unexpectedly winning a large sum on the lottery which the other knows nothing about. Without disclosure, this would remain hidden, when it might be a sum desperately needed by both parties to help them move on. Many lawyers will insist on their client signing a disclaimer if they want to settle without disclosure. Standard disclosure includes 12 months’ bank statements, endowment policy values, pension value statements and often more besides. Your solicitor will guide you according to your own personal circumstances.  

How can a solicitor help to decide what is a fair settlement?
By bringing a wealth of expertise and experience, combined with financial disclosure, to advise their client about what’s realistic, achievable and best for them. Without specialist legal advice, you can’t hope to know how to protect your future, and this can be particularly important for military families because of technical issues such as a Forces pension or the rules about service family accommodation. A good family lawyer can hugely influence a favourable outcome by presenting their client’s position in a plausible and persuasive way. Modern lawyers offer a variety of methods to address matters and keep them out of court, including collaborative practice, arbitration, represented mediation, round-table meetings and constructive discussions with the other spouse and their lawyer. An experienced practitioner will know when it’s best to pursue an argument and when to concede one; and when it’s necessary to fight your corner, in court if necessary. Many of our clients also say how much they value the support and sense of empowerment they get from working with their trusted legal adviser.

Who decides what level of maintenance estranged partners must pay?
The ideal outcome is for a separated couple to negotiate a reasonable and workable arrangement with the benefit of specialist legal advice. Often this works, but sometimes one person (or both!) may have an unrealistic level of expectation about what should be paid. In that case, the lawyers for each party can usually broker a compromise with the benefit of their expertise and experience. In some cases, no agreement is possible, and it may be necessary to ask a Judge (or, in a dispute about child support, the Child Maintenance Service) to decide what level of maintenance – if any at all – should be paid, both short-term and long-term. The law is moving away from long-term spousal maintenance arrangements except where they are really needed. Make sure you get the best advice that applies to your situation.

How are pensions divided on divorce?
A good pension can be very significant, particularly for Forces families. For many people it’s second only in value to their house, and for some it’s their biggest asset. The law relating to pension choices at retirement has been revolutionised in recent years, with ‘pension freedoms’ meaning that funds in some pension pots can be converted to cash, subject to strict taxation rules. But pensions are extremely technical and complex, and the new rules don’t usually apply to Forces pensions. It’s sometimes impossible to understand all the nuances of a particular pension without specialist legal, financial or actuarial advice. It’s vital that if you’re in this position, you speak to your lawyer. Pensions are treated as assets in the ‘pot’ on divorce alongside houses and other property, and in theory are subject to division in the same way. Typically (although not always) a pound in a pension will be worth significantly less in real terms than a pound in a house, because a pension isn’t available until later in life and, even then, will be subject to restrictions. It’s also important to consider whether the whole of a pension should be in the pot. Many Forces personnel may have accrued significant pension values from years of service before marriage. An experienced family lawyer will know how to advise someone in this position – or their spouse. A pension can be ‘shared’, ‘offset’ or ‘attached’ on divorce. Expert advice is a must.

Who keeps the house?
Like pensions and other assets, the house is in the ‘pot’ for consideration on divorce. Unlike other assets, it’s of unique importance as the hub of family life. What happens to it depends on the circumstances in an individual case. For many families, the house is needed as a home for the children because the law says that their welfare is the first consideration, and it may not be possible to have it sold. Mortgage repayment penalties and the rules of the Forces Help to Buy scheme may apply. This can be hard on the parent who isn’t living there, because they may be denied access to a significant part of assets they need, unless an arrangement is made to transfer the house to the other spouse’s name in exchange for a lump sum payment. In other cases, a sale can be brokered as part of an overall settlement, provided the rehousing needs of the children and the parents can be met. This can be the most important aspect of a divorce because, after food and water, shelter is the most basic human need, and a house may have a great deal of equity locked into it. Only an experienced family lawyer can give you the expert advice you need to ensure that your position is best protected and presented – whether it’s to preserve the house or press for a sale.

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