What Is The Best Time To Deal With A Financial Settlement?

I’ve Recently Separated From My Spouse – What Do I Do Now?

The three main issues that need to be dealt with after you have separated are the divorce itself which will end the marriage, the financial settlement and the arrangements for the children.

They can all be dealt with at the same time or can be dealt with at different times. It can however, sometimes be beneficial to issue divorce proceedings straight away to ensure, that when you do reach a financial settlement, that the terms can be put into a court order. A court order will ensure that neither of you can change your mind about the settlement. It is also needed if part of the agreement includes a pension order.

But When Is It Best To Deal With The Financial Settlement?

The financial settlement deals with how the assets and liabilities that you have are going to be divided between you. The main asset is usually the home that you have lived in together but may also include other properties, savings, investments and pensions.

To be able to consider how the finances should be divided it is necessary to find out how much they are worth. In most cases, I would advise dealing with the financial settlement early on. The value of assets can change and if in one party’s sole name, can even disappear. If you have had an investment that you have continued to pay into, so has increased in value, it is unlikely that you will want your former spouse having a share of that extra money. But it is very difficult to work out how much should be taken into account. What was the value at the time you separated? How much has that part of the investment increased by?

You may have bought another property to live in whilst your spouse remained living in the matrimonial home. Your spouse may want to claim a share in that property so you will need to prove where the deposit came from or your spouse may need to prove that the deposit came from joint or matrimonial money. This can be difficult to do if it has been a long time since you separated.

Bank statements can give a lot of information about what has happened with assets. But banks usually only keep statements for 6 years. So if you have been separated for longer than that and haven’t kept all your statements then it will be difficult to prove how much was in the account at the time you separated and what has happened to that money.

The person who has remained living in the former matrimonial home may have carried out improvements and increased its value. The matrimonial home is always taken to be a matrimonial asset, whether in joint names or just one parties name, so the money you spend on improvements could increase the amount of money that the other will receive on the settlement.

You may have most of the matrimonial debt in your name, perhaps on credit cards. But what if you decide to take our a loan to amalgamate the debt or keep adding to the credit card for your personal use. How do you prove then how much was matrimonial debt?

As you can see, there can be a lot of pitfalls in delaying dealing with the financial settlement too long.

Is There Ever Any Benefit In Delaying Dealing With The Financial Settlement?

Sometimes, tactics can mean that a delay in dealing with a settlement is good. Your spouse may own a successful business and you are aware that there is a takeover likely to happen which would make your spouse very rich or a business deal with will significantly increase the value of their shares. You may be aware that values of other assets belonging to your spouse are likely to increase in the near future. These may be reasons to wait to deal with the settlement.

What If We’ve Agreed That I Should Stay In The Family Home Until The Children Are Grown Up?

This doesn’t mean that you can’t deal with the settlement. An agreement can still be reached to decide how the finances will be divided when the children are adults and maybe some of them be divided now. An order can be put in place (if divorce proceedings have been issued) which sets out what will happen to the family home at that time, and how much each of you will receive.

If you have recently separated and are unsure when to deal with the finances, please feel free to contact us on 0800 011 6666.