Financial Agreements and Settlement

Family law agreements

It is important that you consider how to divide your financial assets and to reach a financial settlement.

A final divorce order (previously known as a Decree Absolute) brings a marriage to an end. However, your financial claims may well stay alive.

To reach a family law agreement usually involves two steps:

1. Financial disclosure and valuation of the assets

2. With this as the foundation, to negotiate an overall financial agreement

Step 1 requires consideration of what is financially at stake. This could be the family home, other properties, savings, investments, liabilities, business interests, trusts, offshore assets, pensions, income, outgoings and so on. More information about financial disclosure can be seen here.

Step 2 requires careful negotiation to promote a fair financial settlement. You have a number of financial claims which can be seen here. The family lawyers, together with any court, have to take into account a checklist of factors and principles. More information about such factors can be seen here.

Once an agreement has been reached, it is important that this is contained within a Consent Order. This financial order is binding on you and sets out:

• The financial agreement reached; and
• How it is to be implemented

A Consent order is an important legal document and is usually drafted by a divorce solicitor. Once it has been signed by everyone, it is sent to the court for a judge to approve together with some paperwork to confirm you are up to date personal and financial circumstances.

A Consent order will usually include a ‘clean break’ clause. This type of clause can be very important. Some examples of where care and family law advice is needed are:

• A full income and capital clean break – this means that neither of you can make a financial claim against the other in the future whatever the circumstances.
• A full clean break but conditional upon something happening, for example, the transfer of a property or the payment of a lump sum of money – here your financial claims may well remain alive until this event happens.
• A capital claim break only – this is whether neither of you can make a financial claim for capital, property, money, pension etc but if you are receiving spousal maintenance, this claim remains alive.

For couples who are not yet divorcing but which to separate, then it is important too that a financial agreement is contained in a document called a Separation Agreement. This could be later converted into a Consent order when there is a divorce.

It is very important that any type of financial agreement and settlement is property recorded in a legal document. This is to limit or avoid a situation when one party later changes their mind and the agreement is overturned. A family solicitor can explain your options to you and with cost information. You want your agreement to be binding to protect not only your financial settlement through the divorce but any future wealth, inheritances and so on.

Mediation can help couples to reach an agreement too and further information about our specialist family law mediation services is here.

Couples also think about other types of financial agreements, to include pre-nuptial agreements and post nuptial agreements. We are divorce experts and can help you reach a financial agreement and prepare the relevant family law document to record your settlement.