Sorting out finances on separation and divorce can be complicated and stressful, and we have considerable experience at resolving many of the key issues that can arise.

Most couples will have integrated their joint financial affairs, with perhaps one spouse becoming the main breadwinner while the other may have become financially dependent. The ownership of financial assets, meanwhile, is divided for tax or other reasons.

While it can be difficult in some circumstances, it is always in the best interest of both parties to leave emotions to one side, think about their changed financial circumstances, and agree on the way forward – providing stability and reducing the costs that can be incurred.

How best to go forward?

The first step is to pull together all your financial information – this is called “financial disclosure”. Both parties should do this, and then exchange the information. This can be done formally or informally, in mediation, through collaborative law or through divorce lawyers negotiating on your behalf.

If there is one set of figures that both parties and their representatives can work from, there is a far better chance of a speedier – and fairer – resolution.

Sometimes there may be a temptation to hide incomes and assets and not disclose them. This is not advisable. The courts have wide powers to ensure that there is full financial disclosure and that the incomes and assets are preserved. The law sets out a framework for the division of incomes and assets on divorce. This provides a foundation to construct an agreement between the parties. Expert legal advisers can assist by explaining the framework and what the court is likely to see as fair and reasonable to both parties.

Dealing with the complications

Matters can become complicated where one party has an interest or potential interest in a trust, or where one party has a significantly larger pension scheme than the other.

Pension benefits can be more valuable than the family home, and calculating how they should be divided is a complex issue – particularly where a “final salary scheme” is involved. The Courts will generally insist on an independent, expert financial opinion as to how such assets should be shared.

The division of savings and investments can also be complicated, especially as division can result in penalty charges and tax implications. Financial advice may assist in reducing these costs.

Insurances covering the death illness or disability of either party may need to be reviewed and rearranged. It may also be sensible to effect new policies, for example to cover maintenance payments which could be affected by one party’s inability to work.

It may also be sensible to review Mortgage arrangements to ensure that the family home can be retained or, if possible, that both parties are able to own a suitable property going forwards.

When making the divorce settlement final – and dealing with the aftermath – it is generally sensible to enshrine the final agreement into a Court Order so that it becomes full and final. Without this it may be possible for one party to bring a claim against the other at some future date.

Divorce and separation can result in eligibility for State Benefits for one or both of the partners, and claiming these can be important – particularly where it becomes difficult to fund two sets of living expenses.

It is important to note that, if an existing will names a former spouse as a beneficiary, any such provision will automatically be revoked by a decree. It is always sensible to review a will and often important to write a completely new one following divorce.

Many people also appoint their spouse as their Attorney. Divorce will automatically remove an ex-spouse from this position and, if a Replacement Attorney was nominated in the original Power of Attorney they will automatically be appointed instead. It is still, however, generally sensible to review any Powers of Attorney which are in existence to ensure that they remain appropriate.

The benefit of specialist financial advice

We suggest that anyone who is seeking advice in relation to divorce or separation also contact a specialist divorce and separation financial expert to work alongside their legal team.

Our specialists will help you to:

  • Fully understand and interpret the divorce-related financial, tax and long-term wealth issues arising on divorce and separation
  • Better understand how your current financial situation will be impacted post-divorce
  • Evaluate the various possible settlement proposals and the long-term impacts
  • Build a solid foundation for your future financial stability using cash flow analysis

For further information, or to arrange a no obligation appointment, contact us today by telephone on 01626 242500 or email

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