When a couple gets divorced, they may make a financial agreement to set out how assets such as money and property should be divided. If both parties agree, it is normally possible to avoid court, however, if an agreement can’t be made, then the couple will normally have to attend a mediation session and possibly appear in court.
Everyone’s financial and personal situations are different so it’s important to seek legal advice to ensure that you have included everything in your agreement and that it is legally binding so that both parties are protected.
Things to include in a financial agreement
Understanding what assets you have and how you’re going to divide them may seem like a daunting task, but these four categories are the main things you should think about including in your financial agreement;
- Property
- Money, shares and savings
- Debt and pensions
- Children and/or spousal maintenance
If you have any children, then their needs within the financial agreement will be prioritised and the level of maintenance payments they receive will depend on various factors. Each situation is different, so it’s important to think about what assets you brought into the marriage and how your life will be after the marriage has ended. Some things to consider are:
- What is the cost of renting or buying a home in the area you currently live in?
- Do you, your ex-partner or your children have any health problems that may affect the type of property they will need to live in or the amount of income?
- Are you and your partner both in paid employment? If not, is it possible to find paid employment?
- Were your debts brought into the marriage or did they exist prior to your marriage?
There are many other contributing factors that will affect how assets are divided in a financial agreement. It is highly advisable to seek assistance from a family law solicitor who will ensure that yours and your family’s needs are met fairly.
Coming to an agreement
Generally, if your marriage ends well and you have a good relationship with your ex-partner and your finances are not particularly complicated, then you can choose to work out how your assets will be divided yourselves and create your own agreement. You will have to use a solicitor to make the agreement legally binding, but generally coming to an agreement outside of court will be quicker and more cost-effective.
It is important to prioritise any children within your financial agreement.
So long as your divorce proceedings have started, your solicitor will draft a consent order, which must be presented at court along with an application for a financial order. In order to do this, you and your ex-partner need to sign the forms and pay a £50 fee to the court. If this is approved by the judge, the financial agreement will become legally binding.
What happens if you can’t agree?
If you are not able to come to an agreement, then you may need to apply to the court for a financial court order, and a judge will decide how your assets will be divided.
If it is necessary to involve the court, you may have to provide evidence that you have attended a meeting to determine if mediation is an appropriate way to attempt to resolve any issues. The courts will always favour mediation or other alternative methods to resolve these issues as they can save considerable time and money.
If you need to attend court this will take place over a maximum of three court hearings. The first hearing known as the ‘First Directions Appointment’, is an initial hearing for the court to decide what evidence needs to be called.
The next hearing, known as the ‘Financial Dispute Resolution Hearing’ is usually where the position of both you and your ex-partner will be presented to the judge. The judge will then set out how he or she believes the case should conclude, and the settlement may be agreed at this point.
If this does not happen then the ‘Final Hearing’ will take place where the court will make a decision on how your matrimonial assets will be divided and how any maintenance payments will work.
Get help making a financial agreement
If you need help making a financial agreement or are looking for help with mediation, Crisp & Co’s team of experts can help. Our team of specialist solicitors are on your side and can help your reach an agreement with minimal fuss. Call us today on 020 8017 8962 or get in touch using the enquiry form at bottom of this page.