Family Law – Divorce
The factors which are considered when reaching a Financial Settlement
The circumstances of each divorce can be very different, and it is important to remember this when speaking to friends or family that have also been through a divorce. The facts of each case can be very different and the law in this area is flexible. It is not therefore always the case that the assets will be divided equally between the two of you.
When attempting to reach an agreement as to the appropriate financial settlement, there are a series of factors which must be considered. These factors are also taken into account by the Court when considering what orders should be made and are as follows:
Needs of the Child or Children
Where there are children involved, their welfare and future financial support is always the first consideration. The children’s financial and housing needs are going to be at the forefront of the court’s mind, and it may mean that the assets are distributed in favour of the parent with care to ensure the children’s needs are met.
Available capital, income and other resources
This will include the family home, business and other assets which will need to be valued if a valuation cannot be agreed. A cash equivalent transfer value (valuation on divorce) will need to be obtained for all pensions. Financial support from third parties, for example a parent or new partner may also be a relevant consideration, whether that support has already been provided, or is likely in the foreseeable future. The court will not only look at the income of each of you, but also your respective earning capacities. If both of you are in a new relationship and cohabiting, your new partner’s financial affairs may also be taken into account.
It is necessary to work out not only the finances required for your children to be re-housed, but also your own re-housing needs. Future income needs will also need to be calculated. It will be necessary for each of you to confirm your outgoings, estimating how much you need to meet all of your outgoings on a monthly basis, both now and in the future.
Ages of the parties and length of the marriage
Generally speaking, the longer the marriage, the larger the claims may be on divorce. When looking at the length of the marriage it is usual to start from the date on which any cohabitation started up to the point when you separated. Age is usually a consideration when looking at earning capacity and pension needs on retirement.
Standard of living enjoyed before the breakdown of the marriage
This is usually taken into account in the context of balancing the overall available assets and resources against the needs of each of you.
Any physical or mental incapacity
Often this is only relevant in cases where the management of a significant physical or mental disability of one of the parties will be impacted by the financial distribution of the divorce settlement. It is likely that a medical report would be required if this is to be relied upon.
Contribution that each party has made or is likely to make in the foreseeable future
The role of a wife or husband as a homemaker when caring for children is seen as an equal contribution to that of the other spouse who may be the main earner. Contribution arguments can be relevant in situations where either of you possessed significant assets prior to the marriage, or where significant assets have built up during the period of separation. For example, the introduction of inherited assets to the marriage can be viewed as a relevant contribution and may adjust a settlement in that person’s favour.
Bad behaviour or conduct of either party
This is rarely taken into account in a divorce. In order for the court to consider bad behaviour or conduct it must be extreme.
To arrange a discussion at your convenience with a family law solicitor please do not hesitate to contact us.