Divorce Settlements and Finances FAQ

Below are some of the questions we are most frequently asked about divorce settlements and finances relating to divorce. Click on a link to see the answer to that question or contact us for more information.

• Will we have to go to Court to reach a financial settlement?
• How is a divorce settlement arrived at?
• What is a clean break financial settlement?
• Who pays the legal fees for a divorce settlement?
• What happens to the family home after a divorce?

Will we have to go to Court to reach a financial settlement?

A settlement can be negotiated between the parties, with the assistance of their solicitors, without the need to go to Court. This can help to minimise the legal fees incurred by both sides.

If an agreement is reached in this way it will then be checked by the Court to ensure that it is reasonable and endorsed by them to make it a legally binding order.

The majority of cases can be agreed in this way.

If an agreement cannot be reached in this manner, either due to one or both parties being uncooperative or unreasonable, then it will be necessary to go to Court to achieve an agreement. The downside of the Courts ruling on a settlement is that a degree of control is lost by both parties as to the eventual terms of the settlement.

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How is a divorce settlement arrived at?

An agreement can be reached either by negotiation between the parties and their solicitors, or through the Court process if necessary. The Courts will assess how any capital should be divided as well as whether or not income should be shared.

The negotiation of a financial settlement will take into account the following factors:

• Children – their financial needs as well as other factors that may affect their future wellbeing
• The length of the marriage
• The current earnings of each party
• The potential earning capacity of each party in the future
• The assets of each party including pensions
• The standard of living the couple have enjoyed during the marriage
• The financial contribution that each party has made to the marriage
• Other contributions that each party has made to the marriage (non financial), such as caring for the children and running the house

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What is a clean break financial settlement?

A clean break is where no ongoing financial commitments remain between the parties. A clean break can even be achieved in cases where ongoing spousal maintenance would normally be payable, if enough assets exist to enable the liable party to transfer a suitable amount to offset the future maintenance liability.

A clean break is only possible in relation to your spouse and not your children. It is not possible to achieve a clean break in terms of financial responsibility for children.

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Who pays the legal fees for a divorce settlement?

In most cases, both parties will have their own solicitor and will be responsible for their own legal fees.

In certain circumstances it may be possible to include the payment of legal fees as part of the financial settlement if this is included in the negotiations.

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What happens to the family home after a divorce?

The family home will usually be an asset of the marriage and will therefore be included in the financial negotiations. Divorce settlement negotiations start from the point of an equal division of assets between the parties. If one party wishes to retain the family home then they will need to have enough other assets to be able to offset the value of their partners share of the home by transferring assets of that value to their ex spouse.

If the couple have children then this can sometimes mean that one party can stay in the family home with the children. The Courts always place a high level of importance on the needs of the children. However, the Courts will not allow an unfair settlement to either party, so this type of arrangement will depend on the other parties financial circumstances and their ability to afford a second home to live in. The partner leaving the home can maintain a financial share of the family home, which they will realise at an agreed future date on the eventual sale of the property.

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