Resolving the Financial Aspects of Divorce or Separation
The end of a relationship has long-lasting financial effects on each spouse or partner, as well as any children involved. The best way to secure your financial health is to work with a solicitor who has expertise in the financial proceedings involved in end-of-relationship issues.
The term "financial remedy" refers to the manner in which finances are allocated when a marriage ends or when a civil partnership breaks down. This area of law is highly complex and changes frequently. At Rollingsons Solicitors, we stay abreast of changes in the law so that we can serve our clients better. Much of our family law practice centres around protecting our clients' finances at the end of a relationship and ensuring their future needs are met.
Understanding Financial Orders
Many couples resolve their financial matters without having to attend a Final Hearing at Court. The settlement agreed is then set out into a Court Order which becomes binding and enforceable. However, if the individuals are unable to reach an agreement they can ask the Court to look at their finances. The Court will only be able to make a certain number of orders depending on the situation. These are as follows:
1. Property Adjustment Order
The Court can order that certain property be transferred from one party to another or sold. This usually involves the family home, but can be almost any type of property.
2. Lump-Sum Order
The Court can order one party to pay the other a lump sum or a series of lump sums; however, if this is ordered, the individual lump sums can be varied in the future.
3. Pension Orders
The Court has power to make the following orders:
- Pension Sharing Order: This order splits the pension between the individuals in a way the Court deems fair.
- Pension Earmarking Order: The pension remains with the person who has the pension, but when the pension is drawn, a portion of the lump sum and/or income is earmarked for the other person.
- No Order Related to Pensions: Occasionally, the Court does not make an Order directly over a pension, but takes it into account as an asset and offsets its value by giving the other individual an additional sum from the capital to compensate for the lack of a Pension Order. If this were done, it is unlikely that the Court would take the pension at its full cash equivalent transfer value since it is not liquid capital that can be cashed in.
Maintenance Orders
There are various types of maintenance orders that can be made; some are temporary whilst others are more permanent:
1. Maintenance Pending Outcome of Proceedings: One person can apply to the Court for maintenance (support) from the other whilst the divorce or dissolution process is ongoing. It is essentially a temporary measure until the divorce or dissolution and related financial issues are finalised. This type of maintenance can include legal fees, but not expenses for children.
An application can be made at any time following the filing of a Petition and can also be backdated to that point. The Court can order maintenance to be paid for a specific period or until a Final Order is made.
2. Spousal Maintenance
Maintenance for a spouse can be in either a lump sum or by periodical payments. The amount and length of time that the support will continue depends upon:
- The length of the marriage or civil partnership
- The earning capacity of each individual
- The age of each individual
- Whether or not there are children
3. Child Maintenance
Maintenance for children is usually paid until the child reaches the age of 17 or ceases full-time secondary education, whichever is later. Parents cannot dismiss these rights. Child maintenance can either be agreed directly through the parties or can be dealt with by the Child Support Agency.
Maintenance calculations are based on the non-resident parent's net income and the number of children he or she has. The non-resident parent will then pay a percentage of his or her income to the parent with care. The current percentages are 15 percent for one child, 20 percent for two children and 25 percent for three or more children. These figures can be adjusted downward depending on whether other natural children are living with the non-resident parent and the average nights per week the children subject to the assessment spend with them.
The child support assessment does not take into consideration any net income higher than £104,000 per year. In such cases, the Court has the option of granting a "top up" order to the parent with care. In other words, making the non-resident parent pay more than the usual amount.
The London divorce financial remedy solicitors at Rollingsons are specialists in complex financial issues like these. We are praised for our expertise in reaching an outcome that meets an individual's immediate and future needs, whether through negotiations, collaborative law, mediation or through the Court process.
Contact Our London Settlement Agreement Lawyers
If you would like to discuss a financial remedy further, please contact the London family law solicitors at Rollingsons. Call 0808 159 5250 or contact our law firm online.
