Financial and Legal Advice - Page 10

Divorce involves complex financial and legal considerations that can have long-lasting impacts on your future. This section provides expert guidance on crucial topics such as property division, spousal support, tax implications, and legal rights, empowering you to make informed decisions and protect your interests throughout the divorce process.

property rights during separation

The Effects of Restrictions on your Property Rights during Separation

Published on
Kerry Smith
Kerry Smith
Head of Family Law
at K J Smith

When a couple end their relationship, there is typically a big dispute between the two parties regarding all of their assets and finances.

In a lot of situations, it can often be the case that one member of the couple holds the legal title to the owned property, rather than any property being jointly owned.

This can bring potential issues to you if you are the individual that doesn’t have legal ownership of the property, but there are a number of things that you can do to help your situation.

What should you do if you aren’t named as a Proprietor of the Property?

Following the separation from your partner, it is important that you determine whether or not you are named as a proprietor of the property in question.

In the case that you aren’t named as the proprietor, you will need to contact the Land registry and permit yourself occupation by registering a ‘Home Rights Notice’ against the property as soon as you can.

By completing this process, you are essentially protecting your personal rights in relation to eviction and exclusion, and this allows you to enter the property and means that you can continue to live there, even if you had already previously left the family home.

Although this process provides you with the previously mentioned rights, it doesn’t give you ownership of the property.

Property Restrictions

Restrictions for the property in question will prevent any unnatural dealings with the property by your former partner, particularly as restrictions can ultimately prevent them from selling it.

In order to file a restriction against the property, you must demonstrate a particular interest in the property, as well as matching a variety of different criteria.

As restrictions specifically relate to the property and the way in which it is handled by the proprietor, they are typically used within family law cases.

The main focus of this would be to prevent the sale of the property without the consent of the individual, or their solicitors, that ensured the restrictions. This would work in a way that the Land Registry would notify the proprietor of the property of your wish to apply a restriction against the property, with any objections to the restriction leading the case to be reviewed be an adjudicator.

A restriction would be removed from the property in the event of divorce, a court ordering or even a voluntary release, from the individual that initially requested the restriction, be put in place.

A restriction would be put in place against a property up until one of the parties applies for its removal, but this is typically following an agreement between the two parties for it to be removed, ready for the sale of the property.

Home Rights Notices and their Purpose

These notices are specifically designed to protect the rights of third parties as they will be lodged within the charges register of the property title, which would in turn inform any potential buyers of the property.

By having such a notice, you will be informed of any attempts to sell or transfer the property, giving you the ability to stop any transactions.

There are three types of notice that can be registered including:

Registrar’s Notice – This type of notice is designed for certain circumstances, and isn’t a very common occurrence within Family Law.

Agreed Notice – This type of notice would need consent from the proprietor of the property.

Unilateral Notice – This type of notice does not require any consent from the proprietor of the property.

It is essential that you know where you stand in relation to your property and your living arrangements. In the case that you aren’t a named proprietor of the property, we advise that you make use of this guide and take the relevant steps to protecting yourself and your position.

Click here for more articles by Kerry Smith

About Kerry Smith

Kerry Smith is the head of family law at K J Smith Solicitors, a specialist family law firm who deal with a wide range of issues including divorce, domestic violence, civil partnerships and prenuptial agreements.

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Divorce with a business involved

Going through Divorce with a Business Involved

Published on
Victor Collins
Partner and Solicitor at Nelsons Solicitors

The family business comes in all shapes and sizes and in view of this can often be the most difficult financial settlement to conclude following a divorce.

In today’s uncertain economic climate there are potential storms on the horizon for the family business and in the event of a divorce, the business needs to be protected as quickly as possible for its survival and commercial viability for the future.

Why are there complications in these circumstances?

Dealing with the family business following divorce can raise many complex issues involving inheritance, financial contributions and other family members having a share or interest in the business.

How do the courts decide who gets what?

Historically, the family court and trial judge would seek to protect the family business from being heavily involved in a matrimonial settlement in order to avoid the business having to be sold. In view of the position, it was previously possible to try and ‘ring-fence’ the business. However, the position has changed following the case White v White 2001.

In the case, the court dealt with a 33-year marriage and assets totalling £4.6 million, the main being the family farming business. The case went to The Supreme Court, where Mrs White was awarded £1.69 million, 40% of the matrimonial assets, which resulted in the business having to be sold in order to provide Mrs White’s settlement.

Since the case, the law has leaned towards fairness and dividing the matrimonial assets and courts will only depart from equality where there is good reason to do so.

Understanding the business structure

The first step in resolving the family business is to understand the business structure, of which there are three main types:

1. The sole trader is the owner and controller of the business assets and personally liable for the business and its debts.

2. Partnerships can be formal or informal. There are various types of partnership. In view of the position the business structure can be more complicated. Partnership shares and ownership can vary as can business liability.

3.  A limited company can also be more complicated. This involves the issue of shares and appointment of directors within the company. There can be many owners of the business with restrictions being placed on the transfer of shares in the business.

Having established the family business structure, the next step is to value the business.

How is the family business valued?

The valuation of the family business is a crucial starting point since this determines what is in the ‘matrimonial pot’ for distribution between a divorcing couple.

The valuation of the business will almost always be based upon the current market valuation. Normally the valuation will be by a single joint expert who will be an independent qualified accountant.

In order to carry out the valuation the accountant will require full financial disclosure in relation to the business consisting of financial and management accounts. The accountant may also be instructed to deal with other issues such as: the liquidity of the business in order to raise funds and Capital Gains Tax payable on the transfer of shares, or disposal of the business.

When the family business involves land and buildings then it will be necessary to instruct an estate agent as a single joint expert to provide a valuation of these assets.

What could happen to the family business?

The final stage of the process is to decide how to deal with the family business as a settlement between a divorcing couple.  This will normally involve three options:

1. Putting the business up for sale: This option enables a divorcing couple to sell the business and divide the profits. However, selling the business may not always be practical or feasible for various reasons. It will also mean ‘selling the goose that lays the golden egg’.

2. Buying out the other spouse’s interest: This can involve a cash payment from the business to achieve this object. This can also involve a set-off, for example, one spouse taking ownership of the family business and the other spouse taking ownership of the former family home.

3. Co-owning the family business: For divorcing spouses who do not wish to sell the business then co-ownership of the business is another option. However, this is subject to the spouses being able to continue running the business together and being able to get on.”

Professional advice

It is important for divorcing spouses to ensure the correct professional experts are instructed to deal with the family business on divorce.

This not only involves specialised solicitors but also other professionals to deal with valuation and taxation implications in order to ensure the business is not at risk going forward and at the same time achieving a settlement which is fair and reasonable.

About Victor Collins

Victor qualified as a solicitor in 1983 and joined Nelsons in 2013.

He is a well-respected expert in financial settlements, regularly handling divorce cases with substantial assets with a particular emphasis on those involving a family business.

Victor has also developed a niche specialism advising on pre-nuptial, post-nuptial and separation agreements.

For more information on Nelsons Solicitors please visit www.nelsonslaw.co.uk or call 0115 958 6262.

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How Divorce can Affect Farming Families

Moving on to Pastures New: How Divorce can Affect Farming Families

Published on
Victor Collins
Partner and Solicitor at Nelsons Solicitors

The breakdown of a marriage in any family is an upsetting and emotional experience for those involved.

However, the ramifications and financial upheaval can be considerable and far reaching where a divorce affects a family farm.

There are few other occupations where home and work are so interrelated – the farm is not just a home and business, but a way of life. A farm can involve close family involvement and vested interests and can often be a capital rich, but income light, asset.

Why are there complications in these circumstances?

A farm may have been in the family for a number of generations, resulting in parents and siblings inheriting and sharing the agricultural business. This complex ownership means in the event of a divorce, resolving the family farm as a matrimonial asset can be a very difficult process involving special consideration.

How do the courts decide who gets what?

Where a couple divorces, all assets are taken into account regardless of where they came from. Since the case of White v White 2001, the law has leaned towards fairness when dividing the matrimonial assets and courts will only depart from equality where there is good reason to do so.

However, an equal division of assets and wealth accumulated during a marriage is not always achievable for farmers. This is because of the need to preserve assets that were inherited or owned long before the marriage.

White v White happened to be a case where the parties ran a farm in a farming partnership.

Prior to this case, financial cases tended to be settled based upon a ‘reasonable needs’ basis. This meant that in farming cases it was a lot easier to protect pre-matrimonial assets such as the farm from being sold to fund a divorce settlement.

However, White v White established the principle of fairness. The court ruled that the ‘yardstick of equality’ should be applied so the contribution of both parties to the marriage, and its length, should be taken into account.

This means the financially weaker party should not be disadvantaged and discriminated against when making a divorce settlement.

When a divorce takes place in these circumstances, it is first necessary to ascertain the make-up of the farming business. This includes legal ownership of the land, family trusts and tenancies.

The next stage is to value the farm. In this respect, a specialist valuer is required. It is essential to ensure all aspects of the farm are valued, including land, buildings, farm machinery, livestock and subsidies.

Finally, it is time to divide the farm and the other matrimonial assets.

 How is the farm and other matrimonial assets divided?

Barron J, in her judgement in the Y v Y 2012 case, gave seven factors as a useful guideline and checklist in farming cases relevant to the principle of sharing:

  1. the nature of the assets (e.g. land/property, art, antiques, jewellery on the one hand, and cash or realisable securities on the other);
  2. whether the inherited assets have been preserved in specie or converted in to different assets, realised or even spent;
  3. how long they have been ‘in the family’;
  4. the established or accepted intentions of both the previous holders of the assets and the spouse who has inherited them;
  5. whether they have been ‘mingled’ (for example by being put into joint names of the spouses, or by being mixed with assets generated during the marriage);
  6. the length of the marriage and therefore the period over which they have been ‘enjoyed’ by the other spouse;
  7. whether the other spouse has directly contributed to the improvement or preservation of the inherited wealth.

Protecting your assets

A common mistake and misconception made by farmers and land owners is that a farming asset or business is ‘ring-fenced’ and therefore excluded from any divorce settlement. This is not the case.

The principle of equality established in White v White means that all assets, including the farm, must be taken into account when determining a divorce settlement based upon the requirement of fairness.

However, a trial judge does have the discretion to depart from this basic principle if it becomes clear an equal division of assets is not fair.

This is particularly the case if such a division is likely to damage the farm and business irrevocably.

For these reasons, farming cases can present a number of complex and unique challenges which require an experienced family solicitor specialising in farming cases for their resolution.

For more information on Nelsons Solicitors please visit www.nelsonslaw.co.uk or call 0115 958 6262.

About Victor Collins

Victor qualified as a solicitor in 1983 and joined Nelsons in 2013.

He is a well-respected expert in financial settlements, regularly handling divorce cases with substantial assets with a particular emphasis on those involving a family business.

Victor has also developed a niche specialism advising on pre-nuptial, post-nuptial and separation agreements.

 

 

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pension sharing on divorce

Pension Sharing on Divorce

Published on
Heidi Fleming
Family lawyer with
Bretherton Law

It is easy to see how getting divorced can have a negative impact on an individual’s finances, whether it be those of the wife or the husband.

Having two houses and cars to pay for and run, where once there may have only been one, additional childcare payments, holidays and the countless other extra costs of no longer living under one roof can put serious pressure on standards of living.

Little wonder then that many divorcing couples do not focus on retirement planning when going through a divorce.

According to a study by insurer Prudential, divorcees planning on retiring this year are likely to be 16% worse off than those who have never divorced, and face a shortfall of £3000 in their annual income in comparison.

And around a third of people who have been divorced can expect to retire with debts to their name, compared with one in five who have never divorced.

So when it comes to splitting family assets, the home and its contents are not the only things to consider.

Pension plans can form a substantial part of the divorcing couple’s assets and with the lengthening periods before individuals can draw their state pension, coupled with longer life-expectancy, pensions funds are becoming more and more central to divorce settlements.

Dividing a pension fund can be problematic in that an arrangement that suits one party may not be of advantage to the other.

There are three main ways to deal with a pension in the event of a divorce. The first option is offsetting, where one party simply transfers assets of a certain value, such as the family home, to their former spouse in lieu of their share of the pension. Whilst this is a straightforward solution it may not always be the best – you may have somewhere to live, but no longer any retirement income.

Pension sharing is often favoured as it offers a clean-break solution. In this instance any pension funds are valued and shared between the divorcing parties in accordance with a court order, leaving both parties with a pension in their own name.

The difficulty with pension sharing lies in setting a value on the pension and using a Pension Actuary to value and explain how you need to share your pension to reach your objectives and the effect is fundamental.

Another solution but the least popular is a Pension attachment order in which once the pension becomes payable the pension arrangement pay part or a lump sum to the ex-spouse. Downsides to this sort of arrangement are there is no clean break, and it is impossible to predict either party’s needs at the time the pension becomes payable or the value of the asset to be divided.

Everyone’s circumstances are different and the solution is to think through the options carefully and to get the best advice possible.

About Heidi

Heidi qualified as a Solicitor in England and Wales in 2009. She initially practised in Yorkshire and then as a Solicitor overseas in Gibraltar. She was subsequently called to the bar in Gibraltar in 2015. Heidi relocated to St Albans in late 2016 to join Bretherton Law‘s Family Department as a Senior Associate.

Heidi specialises in Family Law advising on high net worth Divorce, Nullity, Cohabitation, Financial Remedy, children matters and domestic violence cases.

Heidi also has experience in representing children, parents and other relatives in public law proceedings involving social services.

She is a member of the Law Society’s Children’s Panel and is able to represent Children within Private and Public Law proceedings.

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divorce financial planning

Rules of Disengagement – Divorce and Financial Planning

Published on
Nigel Rowland
Principal
Rowland Financial Planning

Divorce or separation can cause significant personal upheaval, but dealing with important practicalities can prevent difficulties becoming worse.

Unfortunately, more than 40% of UK marriages end in divorce.1 While divorce and separation can be emotionally and psychologically damaging, they can also come with huge legal and financial implications.

Amid such upheaval, it is all too easy to overlook such issues, but doing so can make a difficult situation worse, and leave you unnecessarily out of pocket. In some cases, inaction can prolong the process significantly.

By taking a few appropriate and timely steps, those affected can more easily navigate the legal and financial risks ahead, while potentially reducing some of the stresses associated with divorce and separation.

“Firstly and most importantly, seek professional advice,” says Suzanne Lurie of Linder Myers Solicitors. “Professionals can assist and guide you through the process and, whilst it might be an expense, advice at the outset can often help to ensure a smoother process and avoid problems later. Legal advice is essential, but do not disregard advice from your financial adviser or accountant.”

Having sought out the appropriate professional help, there is a number of steps that Lurie believes should be taken – or at least be properly prepared for.

Get your papers in order

One job that might seem mundane but can prove vitally important is to organise your paperwork. Personal documents are often fundamental to working out divorces, and ready access to the appropriate papers can be enormously beneficial as you navigate the process.

“Valuations will be required of all assets, including property, pensions, investments, and share portfolios,” says Lurie.

“If you have these available, it will help with any initial discussions. The same applies to any liabilities you may have, including mortgage, loans and outstanding credit card balances.”

If you have any joint accounts or credit cards, you should let the financial institution know that you are separating. This may lead to the accounts being frozen, and so you may wish to open a new account.

You may also wish to consider how you protect other forms of information. For example, it is worth tallying up who may be able to access your online accounts, and changing your passwords if necessary.

It might also be useful to create a record of relevant events by keeping a diary. “A diary can help you to navigate difficult contact arrangements with the children, should this become a problem later,” says Lurie.

Legal matters

Whilst divorce proceedings will invariably involve legal challenges, it is of course possible that the two separating parties will reach an agreement without legal advice.

If that happens, Lurie stresses the importance of ensuring the agreement is written into a court order – called a ‘consent order’. This will ensure that what you agreed remains legally binding on you both.

Yet even if such an order is agreed, there are other legal questions to consider and review. If you have a Will and a lasting power of attorney (LPA), these will certainly need to be looked at.

“Divorce does not annul a Will,” says Lurie. “Instead, any gift made which benefits your partner takes effect as if that person had died at the date of the decree absolute – the legal document that formally ends a marriage.”

This means that any gifts made to your partner will pass to other beneficiaries or become part of the residue of the estate, potentially against your wishes.

If you have appointed your partner as your executor, then this clause will be cancelled, which could leave you without an executor.

In separations without divorce proceedings, the Will also remains valid – again, this may be against your wishes. Whether divorce affects an LPA will depend on how it is written. You may need to consider whether to change your attorneys, although you can elect your former partner to be your attorney if you wish. If you do not have a Will or LPA, it would be wise to ensure that you do.

If a consent order cannot be agreed, there are still alternative routes to try before heading to court. Lurie maintains that court proceedings are generally treated by professionals as the last resort.

“Separation and divorce does not have to be acrimonious,” says Lurie.

“One route is for you and your partner to meet with a mediator, who is trained to help resolve disputes and help you reach an agreement, but who cannot take sides or give advice.”

Others might consider turning instead to ‘collaborative law’.

Under this approach, each party appoints their own lawyer, and negotiations to seek an agreement are done face-to-face with all parties present. Should this approach fail, then you will need to appoint a new lawyer to represent you in court proceedings.

Childcare

Many couples will also face the challenge of helping children through the process.

“If children are involved, it can be helpful to inform teachers so that they are aware there will be changes at home,” says Lurie. “This has a dual benefit. Teachers will understand better if work is late or behaviour deteriorates, but it will alert you to any issues the children may be having, should they struggle to deal with the separation.

If they are struggling, you may wish to seek advice from teachers or medical professionals on what counselling is available.”

After going through the considerable process of preparing for a divorce or separation, it can sometimes become clear separation is not, in fact, the ultimate answer. In such cases, some couples benefit from the relationship support provided by organisations such as Relate, which can provide significant support.

Will writing and Lasting Powers of Attorney involve the referral to a service which is separate and distinct to those offered by St. James’s Place and are not regulated by the Financial Conduct Authority.

1 Office for National Statistics, November 2015.

About Nigel

I provide a lifestyle financial planning service and wealth management advice to clients both within the City of London, and more widely throughout the South East of England. My office is based in Clapham Village near Worthing in West Sussex.

I have always worked within the financial services industry. My career started with eight years in domestic banking, followed by two years as an area building society manager, then eight years as a life office consultant dealing with professional advisers (financial services, tax and legal) specialising in pensions and investment planning.

As a consequence, I have now established many working relationships with individuals within this sector due, in part; to the insight and understanding that I have for their specific financial requirements – whether these be personal or corporate.

I am committed to ensuring that my industry knowledge remains relevant and current by placing strong emphasis on my personal development towards Chartered Financial Planner status. This, along with the pride and dedication that I place on developing solid personal relationships with my clients, ensures that I am able to offer a rounded, professional and principled service.

Outside of my business, I am married to Vanessa and have two grown up children. I am a keen 5-a-side footballer and have a passion for fast cars. The local community is also important to me and I am the Responsible Financial Officer for Clapham Parish Council.

Call me now to book a time for an initial no-obligation meeting, on 07770 770627 / 01903 871699 or email me on nigel.rowland@sjpp.co.uk

The Partner Practice represents only St. James’s Place Wealth Management plc (which is authorised and regulated by the Financial Conduct Authority) for the purpose of advising solely on the group’s wealth management products and services, more details of which are set out on the group’s website at www.sjp.co.uk/products. The ‘St. James’s Place Partnership’ and the title ‘Partner Practice’ are marketing terms used to describe St. James’s Place representatives.

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Cash Equivalent Transfer Value

Divorce and Pension Rights – My Ex won’t Provide Details of the Cash Equivalent Transfer Value of a Pension

Published on
Peter Jones
Founder
Jones Myers

When it comes to divorce, pensions are treated just like any other asset.

However, unlike bricks and mortar, it can sometimes be difficult to establish whether a pension exists and what it might be worth. This can become even more difficult in an acrimonious split, when one partner refuses to divulge the financial details of their pension arrangements.

If this situation arises, there are number of steps you can take with the help of a specialist solicitor.

First, you need to find out if a pension exists.

A useful first step is to take advantage of the Government’s Pension Tracing Service – an online database containing details of all workplace and personal pension schemes.

Although you won’t be able to search your partner’s details, you can make an application to the court for them to be forced to make search by putting in all of their past and current employers, together with any personal pension providers that might be relevant.

This won’t give you the value of the pension, but it will tell you who the provider is and give you details of where to write for more information.

The next step in securing a fair allocation of assets is to find out how much the pension is worth by obtaining a calculation of the Cash Equivalent Value (CEV) of the pension benefits that have accrued.

Under normal circumstances, this information is put on the table along with any other assets in order to work out what each spouse is entitled to. However, it does happen occasionally, when relationships have completely broken down, that this information is not produced.

In cases of a refusal to provide CEV information about a known pension fund, there is provision in law for the court to require the member spouse to obtain information and also for the court to order the pension provider to supply that information to the court.

To make that happen, the non-member spouse’s solicitor would send a copy of the application for a pension sharing order direct to the pension supplier. It is then obliged to provide certain information to the member, including the value of the pension benefits.

If the member spouse refuses to disclose that information, an application can be made to the court for a separate order for this information to be provided.

Once all of the information is before the court, it enables a decision to be made about how the pensions should be split equitably between the parties. This split can take a number of forms, of which the most usual are:

  • Pension sharing – where you receive a percentage share of any one (or more) of your ex-partner’s pensions. This is either transferred into a pension in your name or you can join your ex-partner’s pension scheme, depending upon the pension scheme rules and independent financial advice;
  • Pensions offsetting – where the value of any pension(s) is offset against other assets, for example, you might obtain a bigger share of the family home in return for your ex-partner keeping their pension.

Amid the stress and emotional turmoil of divorce, it can be difficult to think beyond the day-to-day. However this is precisely the time to focus on planning ahead and avoid later regrets about failing to make adequate provision for the future.

About Peter Jones

Peter Jones is one of the country’s leading divorce and family lawyers. A qualified arbitrator and mediator, Peter set up Jones Myers as the first niche family law firm in the north of England in 1992 and has acted for a string of high-profile clients.

Renowned for his sympathetic approach, he is a former national chairman of Resolution, a former Deputy District Judge – and instigated the D5 Group of law firms that promotes excellence in family law.

Leeds and Essex based Jones Myers, consistently top-rated Yorkshire family law firm by Chambers and the Legal 500 Legal Guides, has been one of the pioneers of collaborative family law – known as the ‘pain-free way to divorce’ – which advocates a more amicable, and often speedier, route to divorce, without resorting to the courts.

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Managing your Finances after Divorce

Managing your Finances after Divorce

Published on
Claire Trundley
Partner HCB Solicitors

There is no doubt that experiencing a divorce can turn your life upside down, both emotionally and financially. For many, it is a devastating and traumatic event that can be messy, protracted and expensive.

Managing your finances after a divorce can, therefore, be an overwhelming and daunting task, leaving you uncertain and anxious about your future, especially if your household income has taken a huge hit.

For some, however, this change in circumstances can be liberating, presenting the perfect opportunity to take back control and achieve financial independence.

Here are 6 top tips to help you get your post-divorce finances back on track.

Prepare a Budget & Plan of Action

Having a budget and financial plan of action in place is key to managing your finances after you divorce.

  • Keep good records of your income and expenses
  • Check the benefits you may be entitled to now that you have separated, such as reduced council tax, adjustments to tax credits or child benefit.
  • Collect statements of all your outgoing expenses such as rent/mortgage, utilities etc.
  • Aim to identify and eliminate any unnecessary expenditure.
  • Identify where any savings and investments can be made.
  • Think about financial planning with your future in mind and the ways in which you will fund your retirement.
  • Think carefully about the long-term affordability of staying in the matrimonial home and the financial consequences of taking on a whole mortgage by yourself, especially if it is going to over stretch you financially.
  • Consider the benefits of downsizing to a smaller property with smaller mortgage and running costs.
  • Consider opting for a share of your partner’s pension rather than focusing entirely on the property you share.

Review Bank Accounts

It is a good idea to cut all financial ties with your ex as soon as possible.

  • Contact your bank to protect any joint bank accounts that you share with your ex. You will want to prevent your ex from emptying or closing accounts or running up any overdraft facility that you will be liable for. You might want to consider closing joint accounts or putting a freeze on them until you and your ex can agree on how to manage things, going forward. Get in touch with your bank and they will be able to advise you on the best course of action to take.
  • Secure your online banking by changing passwords and PIN codes that your ex might know or can easily guess.
  • Close any joint savings accounts and split the assets
  • Open a separate bank account in your name only, so payments can be made directly to you.

Deal with Debts

Making an effort to pay off debts is a sensible way to secure your personal finance going forward.

  • Cancel any joint bank credit cards. Try to reach an agreement with your ex on any outstanding balances and have agreed amounts transferred to new cards in your separate names.
  • Deal with outstanding debts that are in your name. You will be responsible for all debts in your name, even joint debts.
  • Let your lenders know that you have separated or divorced.
  • Communicate with your lenders to let them know if you are experiencing any problems with loan repayments so they can help you with a plan going forward.
  • Seek specialist financial counselling to help you put a plan in place to deal with any debt issues.

Save More

Investing in a savings account is a good way of creating finance to fall back on should unexpected expenses arise further down the line.

  • Allocate a regular portion of your income to your savings which will help you to avoid falling into debt and help protect your financial future.

Sort Mortgage, Rent & Utilities

Taking charge of your mortgage, rent and utilities will help protect the roof over your head.

  • Inform your lender that you and your partner have separated and work out a plan to ensure that mortgage repayments are covered.
  • If you are renting, let your agent or landlord know of your separation and have the lease put in your name only. Again, work out a plan to ensure that rent payments are covered. If you intend to move out of a rented property, let your agent or landlord know and have yourself removed from the lease.  You may also want to remove your name from the utilities for the property.
  • If you are staying in your property, ensure that all utility bills are in your sole name. If you are moving, ensure your name is removed from the utility bills for that property.

Make or Update Your Will

  • If you haven’t made a Will, now would be a good time to visit a solicitor and make one so that your exact wishes are known and adhered to. This is especially important if you have children that you are responsible for. Doing this will give you the opportunity to decide how you want your assets divided and who will be appointed guardians of your children.  If you have already made a Will, you may want to update it or make a new one that matches your new circumstances.
  • If you have a Power of Attorney in place you may want to review it and ensure that it is updated now that you have divorced.

About Claire 

Claire graduated in 1990 and joined HCB’s Bedford office in 1993; she was made a Partner in 1997.

She has always worked in family law dealing with children (private law), divorce, injunctions, financial matters and separation. She is an accredited specialist of Resolution (formerly known as SFLA) and a trained Collaborative lawyer.

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Divorce Finance Specialist, Comments on Latest Office Of National Statistics *Findings on Divorce in the UK

Published on
Mary Waring
Mary Waring
Independent Financial Advisor and The Wealthy Woman: A Man is Not a Financial Plan: A Woman’s Guide to Achieving Financial

Data on UK divorces, released this week by the Office of National Statistics, announced that that the average age at divorce is continuing to rise; for 30 years, from 1985-2015, the average age at divorce has increased by over eight years.

The average age at divorce for a man in 2015 was 45.9 years, and 43.5 years for a woman.

Therefore, for a spouse with no retirement provision, overlooking his or her soon-to-be-ex’s pension could prove costly.  Factor in many stay-at-home parents’ gaps in state entitlement and it’s clear pensions have never been a more important consideration for divorcing couples.

People experiencing divorce often prioritise the house thinking they will be able to move somewhere smaller and realise some capital later. But moving from, say, a 4-bed to a 3-bed will usually not generate that much cash once the costs of moving are taken into account.

Under today’s flexible pension rules, anyone with a private sector defined benefit, also known as a final salary scheme, can demand a cash transfer and if they are 55 or more, obtain what could be a considerable lump sum.

Based on how transfer values from defined benefit pension schemes are calculated, the transfer value of a defined pension may be more than 30 times the annual income.

So, if your other half has built up a final salary pension of just £7,000 a year, it could be worth more than the average UK house price of £222,000 recorded at the end of 2016.

Someone with £30,000 of final salary pension could be sitting on an asset worth £1m. This shows just how valuable the pension is. It’s very easy to discount the importance of a payment which may not be available to you for a number of years in the future. But when you understand the current value of that income, you then realise how vital it is for you take a share of that value, rather than have all your share of the joint assets tied up in a house.

Courts can make an order that a pension is split, with part of the benefits transferred to the other party in the divorce.

Splitting a pension and then transferring it into a defined contribution plan can, in some circumstances, be an efficient way to generate revenue for a non-earning party who could receive £11,000 tax free per year from the DC pension pot if they are over age 55 This compares to the 40 per cent tax the main breadwinner might pay on pension withdrawals.

It’s all about maximising the value of what’s in the joint pot. Money that comes to you or your ex-spouse in the future rather than going to the taxman has to be worth investigating.

The Office of National Statistics data also finds that some 42% of marriages are destined for divorce, and that half of these divorces are expected to occur in the first 10 years of marriage.  This does underpin the importance of prenups and postnups, especially in situations where one or both spouses have substantial pre-acquired assets.

A properly drawn up prenuptial agreement will not be a cheap option and the additional expense, on top of all the wedding costs, may be very unwelcome. However, the legal costs of a prenuptial agreement are likely to be much less than the costs that would be incurred by having an acrimonious divorce, involving a protracted dispute about financial matters.

According to the statistics, the majority of divorces in 2015 where a decree absolute was granted were petitioned by the wife (62%).

Essentially, both case law and divorce law now make it much easier for a non-earning spouse (very often the wife) to get a fair share of the assets on divorce.  This is likely to have increased the number of women getting divorced”.

*https://www.ons.gov.uk/peoplepopulationandcommunity/birthsdeathsandmarriages/divorce/bulletins/divorcesinenglandandwales/2015

 

About Mary

Mary Waring is a Chartered Financial Planner  and Chartered Accountant who specialises in advising female clients, particularly women going through a divorce.  She is also an affiliate member of Resolution, a national organisation of family lawyers committed to non-confrontational divorce.

Wealth for Women Limited is a financial planning firm which specialises in providing financial advice to women who are going through divorce or bereavement.

 

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Divorce Proceedings and Financial Applications Uncoupled.

Published on
Carmen Hudson (LLB) Director DivorceBox

From Monday 19th June 2017, divorce applications and financial applications (following a separation) will be separated in the eyes of the court. 

The president of the Family Division recently confirmed that following a successful pilot scheme, courts in England & Wales will separate  divorce and financial applications to avoid delays to the separation process.

‘We are pleased to say that the pilot has been successful and achieved its aim of introducing a more streamlined process which reduces the delays currently experienced by court users as files are transferred between courts’ *

The aim is for users to have one case number for both applications (divorce/financial applications) but separate files which should reduce the delays currently experienced by users entering the system.

‘Currently if a contested financial application is made the whole divorce proceedings are transferred to a local court to be dealt with. This builds in delay for court users and is resource intensive for HMCTS staff to administer.’ **

Following theses changes the court should see a significant reduction in the number of delays that arose because of the transference of files.

As separate applications, they should be dealt with more efficiently and this should reduce the waiting time and uncertainty that existed within the old system.

A move towards a more streamlined process has long been awaited by those within the Family Law sector. The Family Court system has been very slow to change compared to other sectors within the legal system where advances in technology have been embraced to allow better access for clients.

Whilst this is a positive step in the right direction it is worth noting that Family Law proceedings can be some of the most stressful and life changing of applications for those involved.

As such more should be done to reduce the impact on those individuals who have no choice but to engage with the Family Court system.

No fault divorce and easier access in terms of entry into the system are yet to be implemented and we have a long way to go before we achieve a truly accessible system the serves the individuals it is meant to protect.

* https://www.judiciary.gov.uk

** President of Family Division’s letter of 27th April 2017   

ABOUT CARMEN

Carmen Hudson (LLB) is a director and head of legal of operations at DivorceBox.com a online legal service provider specialising in online divorce (e-divorce).

After 15 years in dispute resolution she founded DivorceBox to offer a less intimidating alternative to traditional legal services.

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How to Approach the Thorny Issue of Pensions when Divorcing 

Published on
Peter Jones
Founder
Jones Myers

Along with dwindling annuity rates and the demise of defined pension schemes, it is a fact of life that divorcees’ retirement incomes are inevitably lower than those of non-divorcees.

A further downside is that from April 6, 2016, thousands of people who divorce, remarry or form a new civil partnership can no longer use ex-spouses’ National Insurance Contributions to help increase their basic state pension.

This development makes it even more essential for separating couples to obtain sound financial advice – not only on their pension situation – but on a whole range of money, investment and insurance issues.

At Jones Myers we have a wealth of expertise in financial remedies – settling of financial matters on divorce. Our specialist team can assist in the complex area of pensions.

As pioneers of collaboration, which offers a viable and constructive alternative to going through the court system, Jones Myers highly experienced lawyers also work with other professional consultants to help both parties secure the best outcome possible.

Among these are neutral Independent Financial Advisers who provide crucial information and advice to both parties regarding pensions and financial planning generally.

This process is vital for the family’s new situation in which fundamental changes can include the extra cost of running two homes, reduced individual disposable incomes and a greater debt burden.

It is also important for couples to discuss their finances openly and honestly. The collaborative process is ideal for this as both parties agree to work through family and financial issues together.

However, when it comes to the divorce process there is no avoiding a full and frank disclosure of each partner’s finances. Neither party can put their head in the sand, nor should they believe that they can squirrel away assets.

Financial disclosure is designed to protect both parties and to ensure that each receives a fair settlement in the circumstances of that particular family, and which may well include an equitable split of pension benefits.

Clients who have resolved issues with their partners through collaboration say it brings wide-ranging benefits which include feeling more in control over their future and improved levels of communication with their ex-spouses. Agreements are reached more quickly and creatively, but far less confrontationally, than awards imposed within the court process.

For more information about financial planning or any aspect of divorce or family law call our team of experts at Jones Myers on 0113 246 0055 or tweet us on @helpwithdivorce

About Peter Jones 

Peter Jones is one of the country’s leading divorce and family lawyers. A qualified arbitrator and mediator, Peter set up Jones Myers as the first niche family law firm in the north of England in 1992 and has acted for a string of high-profile clients.

Renowned for his sympathetic approach, he is a former national chairman of Resolution, a former Deputy District Judge – and instigated the D5 Group of law firms that promotes excellence in family law.

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What Is The Average Cost Of Divorce?

What Is The Average Cost Of Divorce?

Published on
Henry Crisp
Founding Partner
Crisp & Co.

If you’re considering going through a divorce, often one of the biggest worries will be the overall cost associated with the process. After all, divorce has always been famous for its price tag. But what does the price entail?

Aviva estimates the overall cost of a divorce at nearly £44,000 – or £21,979 per partner to be precise. That seems like a whopping amount.

However, the cost of legal fees per person on average makes up just £1,280 of that total. So what are the other costs associated with divorce? According to the research by Aviva, setting up a new home, arranging childcare and even post-separation holidays are among the secondary costs frequently cited by divorcing couples.

In our recent infographic, “What Is The Cost Of Divorce?” we break down the average cost of a divorce as well as providing some top tips for protecting your assets and ensuring the best outcome for you and your family.

What are the Costs?

For any divorce, you will need to apply for a divorce petition and pay the court fee – this is currently £550.

It is highly advisable to instruct a solicitor to help you through your divorce, and the solicitor’s fees will be on top of the court fee.

The bulk of the financial upheaval associated with divorce will be down to the division of assets. This doesn’t necessarily need to be done by a judge in court: there are various forms of alternative dispute resolution available, such as mediation.

In a mediation session, you and your partner will sit down with an impartial mediator who will guide the negotiations. If you and your partner cannot agree on a settlement, it will be the role of the judge to decide how assets are split.

 How are Assets Divided?

There are few set rules regarding who gets what in a divorce. Usually, assets acquired during the marriage (often known as ‘marital assets’) are considered as the property of both partners and put into the divorce pot to be divided up.  This includes:

  • Property
  • Earnings/pension acquired through work
  • Business and investments
  • Money

When deciding how to fairly divide up these assets between the divorcing couple, the judge will take into consideration a number of factors:

  • Whether there are any children
  • Whether a pre-nuptial or post-nuptial agreement exists
  • The length of the marriage
  • Future income and financial needs of both parties
  • New relationships (e.g. if one person has started a new relationship and is living in their new partner’s home)

However, every divorce settlement is decided on its own merits, and no two situations are the same. The judge has discretionary powers and will ultimately make the call on what is fair.

About Henry

Henry Crisp qualified as a solicitor in 1992 and has specialised in the practice of all aspects of Family Law since then.

Henry is a founding Partner of Crisp & Co.  As well as being a qualified Mediator, Henry is also a member of Resolution and is trained and practised in Collaborative Law.

 

 

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What is the Cost Of Divorce?

What is the Cost of Divorce?

Published on
Henry Crisp
Founding Partner
Crisp & Co.

Aviva estimates the overall cost of a divorce at nearly £44,000 – or £21,979 per partner to be precise.

That seems like a whopping amount. However, the cost of legal fees per person on average makes up just £1,280 of that total.

So what are the other costs associated with divorce?

In our recent infographic, “What Is The Cost Of Divorce?” we break down the average cost of a divorce as well as providing some top tips for protecting your assets and ensuring the best outcome for you and your family.

About Henry

Henry Crisp qualified as a solicitor in 1992 and has specialised in the practice of all aspects of Family Law since then. Henry is a founding Partner of Crisp & Co.

As well as being a qualified Mediator, Henry is also a member of Resolution and is trained and practised in Collaborative Law.

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