We understand how the end of a relationship can have a dramatic effect on your finances and your life as a whole.
But, we also know how important it is that you understand where you stand from a legal point of view when this happens; there are many different factors affecting your claim to your joint finances after separation.
Here at First4Lawyers, our team of divorce lawyers are here to help you understand your rights. We can also guide you through the legal process during what may be a difficult time.
What are the main factors affecting finances after separation?
- Whether or not you’re married.
- Whether you wish to separate or dissolve the relationship.
- Whether you have any pre-nuptial agreements/pre-civil partnership agreements/cohabitation agreements in place.
- Whether you have any children.
How will my marital status affect my finances after separation?
If you are married or in a civil partnership, then you have an automatic claim to the finances of your spouse/partner when you separate or dissolve your union. This is where the 'sharing principle' (divison of assets)and 'needs principle' (what you actually need to manage in the future) in English law is applied.
However, if you and your partner are unmarried then you have no automatic legal claim to their finances.
The existence of a pre-nuptial agreement, pre-civil partnership agreement, or cohabitation agreement may change the nature of your legal claim to the finances of your spouse, partner, or cohabitee (and vice versa).
Bear in mind though that such documents will only have a strong legal basis if their terms adhere to the rule of UK law and the court deems them to be fair.
What are the financial differences between legal separation and divorce?
If you are married and wish to end your relationship, you can choose between divorce and legal separation.
You may wish to choose legal separation over divorce as it will mean that you are still entitled to some of the financial benefits of a married couple, such as the associated tax breaks.
On the other hand, divorce is final and completely severs your relationship in UK law. After the divorce is final, you will no longer have any claim to the finances of your ex-spouse, nor any of the associated benefits that the marriage may have brought you.
I am married / in a civil partnership – what are the financial considerations from a legal standpoint?
You have an automatic legal right to your spouse’s finances if you are married or in a civil partnership. As a result, a divorce will result in a division of your combined assets.
Yet many people believe that there is such a thing as the 50/50 law in terms of an equal share. In reality, this is not the case.
The main financial consideration in a divorce or dissolution settlement is how much you and your spouse/partner need to live on after the marriage/partnership ends.
If you have children from the relationship, their needs will come first in the eyes of the law. This means that the value of the family home may be split unequally. This is to ensure that the parent who cares for the children most of the time has somewhere to live.
If there are no children involved, then your individual needs will be the main financial consideration in UK law. This means ensuring that each of you have somewhere to live and that you can support yourselves financially.
I am married / in a civil partnership – what legal issues might I face?
Reaching a financial settlement in a divorce can be both difficult and expensive. Yet the whole process will be easier and less expensive if you and your spouse/partner cooperate to reach what you both feel is a fair settlement.
If you can’t reach a fair agreement between you, then you can hire a solicitor to mediate a compromise. If you are still unable to agree, you may then have to apply to the court in order to resolve your joint issues.
It is important that you both disclose all of your capital assets, including pensions in full. Failing to do so could lead to imprisonment or costly legal proceedings in the future, as in the case of Alison Sharland and Varsha Gohil. If you suspect your spouse or partner is not being honest about their finances, then you should hire a skilled divorce lawyer to investigate.
I am unmarried – what financial claims might I have from a legal standpoint?
Unmarried couples have no automatic right to the finances of someone they are living with; this is also the case when the relationship ends. However, you may need to settle issues relating to jointly-owned property and money, as well as any children from the relationship. You can do this either by an informal agreement or by making a written separation agreement.
If you are unmarried and don’t have joint assets, one partner may be left with very little income, especially if they are unable to work because they have the care of children. For this reason, it is highly advisable to enter into a cohabitation agreement before you split up.
I am facing legal issues with regard to my divorce settlement – what should I do?
To reach a fair divorce settlement that protects your financial interests, you should seek advice from experts as soon as possible.
Here at First4Lawyers, we assign an expert divorce lawyer. They are here to offer the advice you need to understand rights and to help fight for your financial future. If you need help, please contact First4Lawyers today.
Our specialist family solicitors are always looking to help.