Negotiating a Divorce Financial Settlement

Posted 14th January 2022

Written by Newtons Solicitors Family Law Team

Four £20 bank notes.

Negotiating a divorce financial settlement, as much as marriage, is about compromise. It may not be exactly what you wanted, but often meeting in the middle is better than a battle.

How to Negotiate a Divorce Financial Settlement Without Going To Court

In all separation matters, if a married couple decides to proceed with a divorce, they will need to consider financial matters ancillary to that divorce. In most cases, a financial consent order will need to be agreed between the parties to provide a clean break. This will ensure that neither party can claim against the other in the future; whether in life or death.

If a compromise can be reached outside of court, it usually means less stress, less delay and less cost. Most separating couples recognise this, and the vast majority of couples never set foot inside a court when dividing their finances during a divorce.

Before discussing a financial settlement with your ex-spouse, be sure to seek legal and financial advice from a solicitor to ensure you get the best possible outcome. Negotiating a divorce financial settlement can be uneasy, however organising details such as your property, pension and marital and business assets with a consent order will ensure you are financially protected moving forward.

Once you have an agreement, it is important to make sure it is binding and enforceable. Unfortunately, many people agree to something informally but never get it put into a binding agreement. This leaves them at risk if their ex-spouse fails to keep their side of the bargain. Hence why a consent order is so vital to ensure you are protected against future financial claims.

What is a Consent Order?

A consent order outlines the divorce’s financial agreement for a couple who are ending their marriage or civil partnership. A consent order is a legally binding document approved by the family court as part of the divorce process. It is usually approved on paper, without the need to attend court.

As it is such an important document, you need to ensure that you get it right. There’s no one size fits all for consent orders, but it’s vital to protect yourself against claims for your finances during and after a divorce. A solicitor will spot issues you may not have considered and offer advice during a divorce. Solicitors will ensure your consent order is written in such a way that it fully reflects the negotiated agreement reached by both parties.

The Benefits of Negotiating a Divorce Financial Settlement Outside of Court

  1. Minimises stress and the emotional burden

A divorce is an emotionally draining process which finalises the end of a significant chapter in your life. Whether you had a prenuptial marriage agreement in place or not, negotiating a divorce financial settlement outside of court can remove the added pressures and stress at an already difficult time.

  1. Reduces legal costs

Deciding on your financial settlement outside of court will undoubtedly reduce both parties’ legal costs and financial burden. A financial settlement is the most cost-effective way to deal with your finances during a divorce than having a judge decide your finances within a courtroom.

  1. Mutual decisions

Although your marriage or civil partnership has ended, this doesn’t mean that a hostile environment needs to be created. Reaching an equally agreed settlement for your finances during a divorce can ensure that there is still a working relationship there; whether in regards to your children or marital assets.

  1. Communication

When it comes to organising your finances during a divorce, communication is key. Regardless of the current circumstances, it’s important to understand what each party wants from their financial agreement. Keep communication as open as possible to ensure that both parties are satisfied with the final consent order.

 

Is There a Time Limit For Financial Settlements After a Divorce?

Some parties mistakenly believe that upon receipt of their Decree Absolute, the matter is concluded without the need for further orders. However, if you don’t have a consent order in place at the time of your divorce, there is no time limit to prevent a financial claim being made against you.

For example, the Supreme Court saw a woman, who had divorced from her husband almost 20 years ago, being allowed to proceed with a financial claim as there was no consent order in place. Although this case caused a stir within the legal community and with members of the public, she was eligible to proceed with the claim.

Therefore, it is vital that any divorcees who do not have financial orders in place review their situation as they may now face claims based on assets and capital acquired after the divorce.  Any consideration of the claim will be based on up-to-date law instead of the law available at the time of the divorce.

What Happens If I Were To Go to Court For my Divorce?

The law on sorting out divorce finances is flexible, not formulaic. In England and Wales, your finances during a divorce will be shared as equally and fairly as possible. However, in Scotland, there is a different approach.

Case law provides guidance and principles to be applied, but the law is deliberately flexible. A judge must ask themselves “what is fair considering all the circumstances of this case?” This gives the court a very wide discretion. Everyone’s circumstances are different, so what is fair in one case may not be fair in another. If a rigid formula were applied regardless of the case’s particular circumstances, then there is the risk of real injustice. It’s also important to consider if your financial settlements during your divorce go to court, you may not get the outcome you hoped for.

If you are looking to get a consent order in place, our experienced and professional team at Newtons Solicitors can offer you legal advice during this time. Our solicitors can draft the necessary consent order financial document or discuss appropriate financial proposals according to current law.

For a discussion regarding finances during your divorce or other family law issues, please don’t hesitate to get in contact with our divorce and family team. We offer a first-class approach to what can be a difficult and upsetting time.