This is what actually happens to your finances when you get divorced, according to a divorce lawyer
The decision to end your marriage is rarely an easy one. Whether it appears to come out of the blue or after years of separation, divorce can be an extremely difficult adjustment period. Not least because of the impact on your finances.
It costs £593 just to apply for a divorce (although you can get help paying this fee if you’re on a low income). And that’s before you’ve gone through the hassle of employing a divorce lawyer, managing court fees, and deciding on a financial settlement.
In fact, Money Helper estimates that the average cost of a divorce in the UK stands at £14,561, and it’s even higher if there’s a property involved. With that in mind, GLAMOUR spoke to Jim Richards, a Senior Associate at Winckworth Sherwood, to find out more about what actually happens to your finances during a divorce.
What’s included in a couple’s finances?
Financial remedy applications can include assets such as (but not limited to) property, savings, pensions, shares and high-value items such as cars or jewellery – regardless of whether it belongs to one or both of you.
Do I need a divorce lawyer?
Whatever the reason for making an application, it is crucial to take early advice, whether you are the paying or receiving party. A solution-focused family lawyer will be able to guide you through the application process, whilst avoiding unnecessary conflict with your ex-partner. They’ll also be able to guide you on how a court is likely to view any change in your finances and what a reasonable level of maintenance is to suggest to your ex-partner if any at all.
Can couples decide together on how their finances should be divided?
When a married couple divorces in England and Wales, they can reach an agreement between themselves as to how their financial assets will be divided or they can apply to the court for a judge to decide.
For some, deciding who gets what can seem like an impossible conversation to have, the consequences of not doing so can be significant. Either way, the latest government figures suggest these applications are reaching their highest levels since 2011 with nearly 13,000 court orders made in the first part of 2021.
What if I’m financially dependent on my partner?
The court is bound in every case to consider whether to sever all financial ties between the parties (known as a ‘clean break’), this may not be possible, so you (or a judge) might decide that maintenance payments are needed.
This can last for a short term to enable an adjustment, or until a pension is available or longer as the case may be. This is particularly common in divorces where children are involved or where longer-term financial needs can’t be met from the assets available at the time of divorce.
For example, if a party has taken a career break to raise children, it may be a few years after returning to work, before they are able to earn enough money to be fully financially independent. Although maintenance payments are usually time-limited, they can last for several years. (It’s important to note that maintenance ordered as part of a divorce settlement is entirely separate from child maintenance.
Is the court’s decision final?
If the final agreement contains maintenance payments, either the paying or receiving party can apply to increase, decrease or indeed to dismiss the order. As a rule of thumb, other aspects of the final agreement can’t be varied such as pension sharing arrangements or lump sum payments which is why it is crucial to seek out legal advice when divorcing, to ensure your long term needs are provided for where possible.
It’s not difficult to imagine a variety of life circumstances that could lead to someone needing more in maintenance or being unable to continue paying. The law in England and Wales recognises this and that any maintenance agreed at the time of divorce may no longer be appropriate as time goes on.
For example, children may change which parent they live with or become independent and move out of the family home. In more unfortunate circumstances, the paying party might become redundant or unwell for an extended period, reducing their ability to work. In reverse, either party may experience a sudden increase in income, following a job promotion or new business venture, which might mean the receiving party is less reliant on maintenance payments from their ex-partner.