In advising as to a Financial Settlement within divorce proceedings, the starting point is the financial position of the parties as at that date (not when they separated) and the principles set out at Section 25 of the Matrimonial Causes Act 1973 (I will go into more detail regarding these in a later article).
Initially, the Solicitors on each side will advise their clients of the need to provide full and frank documentary disclosure of their financial position. The principle behind this is that when there has been such disclosure, then each party knows exactly not only what they have, but also what their Husband/Wife has and it is then possible to enter into negotiations in a meaningful way.
If a Court Order is agreed on the basis of disclosure which turns out not to be “full and frank”, then the prejudiced party can apply to the Court to set aside that Order and to re-hear the case on the basis of the additional disclosure that has come to light. The party who has failed to make appropriate disclosure will be penalised with regard to having to pay a contribution to the other side’s costs (these may be substantial!).
The largest asset for most people is normally the matrimonial home. A valuation will either be agreed, or the parties will instruct Estate Agents/Valuers to provide a valuation that they can both work on. Apart from that, financial disclosure involves the provision of Bank statements, P60’s, payslips, Business Accounts (if appropriate) and details of any debts. There is also a requirement to obtain the Cash Equivalent Transfer Value (CETV) of each Pension held by each of the parties.
Once appropriate disclosure has been made, then in the normal course of events any settlement will be governed by:-
(a) The interests of the children being paramount.
(b) Looking at the needs and resources of each of the parties.
(c) Seeking to share the resources so as to meet each party’s reasonable needs if at all possible. Usually the approach will be that the assets should be shared equally provided that meets the needs of both parties. If it does not then this is when a decision has to be made as to who gets the majority of the assets and on what terms – generally this benefits the party who is the primary carer of the children at the time.
