Managing Finances When Divorcing

13 Aug 2019 | Lisa Pepper
piggy bank

Divorce Day

Believe it or not, January is considered divorce season among solicitors and lawyers. There is even a phenomenon known as ‘Divorce Day’, which lies on the first working day after New Year’s Day. There are several reasons for this – for example, couples may wish to give their families a good Christmas before telling them the news, or they are looking ahead to the New Year as an opportunity for a fresh start for them all.

The statistics support this idea of Divorce Day or at least the idea of divorce season. Last year, UK divorce lawyers, ‘helped 1.8 million couples who were considering splitting up during the holiday season’ and it has been shown that while 42 per cent of marriages in the UK end in divorce, this is the most common time of year for it’.

When going through a divorce, one of the most pressing issues after deciding on child arrangements is the division of finances. In fact, money matters can be so complicated, that the time taken to sort out the finer details of the divorce, including financial settlements appears to be growing. It is estimated that it can now take on average 14.5 months to get the details nailed down, compared to only 11.5 months last year.

Managing Your Assets – Some Broad Guidelines

The government website www.gov.uk offers some broad guidelines on what you should think about when deciding how to manage your money and other valuables during a divorce. The advice includes these notes below:

  1. If both partners can come to a mutually agreed arrangement without going to court, you can work with a solicitor to make your decisions binding from a legal standpoint. The decisions you take may include how to divide any jointly held property and money, as well as making arrangements around child maintenance.
  2. Help may be sought in order to come to an agreement on financial matters. For example, the services of a trained mediator or a solicitor may be useful.

3. If you have problems agreeing on how to divide your assets, then the courts can be a suitable avenue for help. Generally, prior to applying to court for assistance, it must be demonstrated that mediation is not appropriate and cannot work. However, there are certain cases where this proof is not necessary, such as when the relationship has been abusive or when social services have been involved.

Honesty Counts

Above all, when dividing up money and belongings it is important to be honest, among other things you both will need to consider:

  • What to do with your home? This depends on what you can afford, whether you have children and how much your home is worth. For example, you may wish to sell your home entirely or buy your partner out.
  • What to do with your pensions after divorce? It may be useful to speak to a financial advisor in order to decide how to manage any pensions.
  • Management of any joint bank accounts. For example, you may decide to continue using a joint account to cover costs such as the mortgage or child maintenance, or you may decide it should be closed and that you should open separate accounts.
  • How to split other things of value including personal belonging, savings and investments. This may also include items such as furniture and white goods as well as pets. Discussion of any debts should also be included, especially if debts are shared.

Divorce, Money and Children

Divorce with children is more complicated than if you have no children. Below is listed just a few of the extra considerations that impact financial discussions between a couple with a family.

Child Maintenance

Child maintenance must be paid to whichever parent is looking after the children and if the childcare is shared, maintenance payments will be reduced accordingly. What you pay depends on your earnings for children up to the age of 16 or age 20 if the child is in full-time education up to finishing their A-levels. There is no legal obligation to fund your child through university.

The Family Home

During divorce negotiations, a priority is to ensure that any children have somewhere to live. So, it is frequently the case that the house cannot be sold until the children’s education is completed. This means that it could take years before the equity from the family home can be released and shared.

State Benefits

You may need to consider claiming state benefits in place of any income you received from your partner, for example, you may be eligible for Universal Tax Credit

Share this article

Contact

Related InsightsVIEW ALL

  1. two people walking
    22.3.2023

    Does it matter if you’re a breadwinner...

    When it comes to deciding how wealth is split, English courts do not discriminate based on your role within the...

    Read more
  2. couple holding hands
    16.3.2023

    Are trusts protected from divorce?

    Can trusts protect an inheritance from your spouse? A trust is a separate legal entity. Neither spouse owns its assets. ...

    Read more
  3. cube cafe camden
    16.3.2023

    Is a limited company protected from divorce?

    Is my spouse entitled to half of my business? If you are involved in running a limited company, then it...

    Read more
  4. man looking out
    16.3.2023

    How is a pension split in a divorce?

    Pensions and Divorce In a divorce, pensions are taken into account together with all other financial assets. Once all assets...

    Read more
  5. Camden house red door
    16.3.2023

    Who gets the house in a divorce?

    How is a house divided in a UK divorce? For most people contemplating divorce, one of the main concerns will...

    Read more
  6. 8.12.2022

    The courts approach to costs in financial proceedings...

    WC V HC – a recent costs case in financial proceedings on divorce The recent case of WC v HC [2022] EWFC 40...

    Read more
  7. 6.10.2022

    How to set aside an order in financial...

    My ex-spouse didn’t tell the truth about their finances when we divorced, can anything be done? Can the financial...

    Read more
  8. 30.8.2022

    What are the rules on pension sharing?

    Pensions are one of the biggest assets of a marriage, yet many people are uncertain about whether they are entitled...

    Read more
  9. 6.5.2022

    My ex has cut me off during divorce

    Unfortunately, it is far too common that when a client says it’s over, their spouse with the “purse strings”...

    Read more
  10. 6.5.2022

    How the Court views loans from parents during...

    Getting a loan during a divorce A frequent issue in financial divorce cases is a loan from a spouse’s...

    Read more
  11. mesher order house
    5.5.2022

    Mesher Orders Explained

    What is a Mesher order? A Mesher Order allows the sale of the family home to be postponed in a...

    Read more
  12. 11.4.2022

    Divorcing couples reaching financial settlement through Private FDR

    The Runaway Advantages of the Private FDR Our specialist lawyers are keen to ensure our divorcing clients achieve cost-effective outcomes...

    Read more
  13. 9.12.2021

    Negotiating financial settlements in divorce

    Costly and acrimonious divorces: a lesson in what not to do  If you’re determined to pursue your financial claims...

    Read more
  14. squirrel hiding assets
    16.11.2021

    Uncovering hidden assets in your divorce

    Hiding Assets During a Divorce As part of your divorce, you and your ex will have to agree on how...

    Read more
  15. 9.11.2021

    I helped build my spouse’s career

    What is the impact on our divorce settlement? It’s been almost two years since The Da Vinci Code author...

    Read more
  16. 9.11.2021

    6 cases that shape your divorce settlement

    Part of what makes our divorce lawyers experts in their field is knowing what way a judge is likely to...

    Read more
  17. separate paths in the snow
    10.9.2021

    Does Divorce Revoke A Will?

    Divorce and Wills In the midst of a divorce or separation, it’s rare for couples to think about making...

    Read more
  18. beneficial interest in property review at the court of appeal
    10.8.2021

    Beneficial Interest in Property

    Andrew Watson, a London-based divorce lawyer in our family department and Resolution accredited cohabitation lawyer, summarises the law in relation...

    Read more
  19. 27.4.2021

    Divorce in your 60s – The Financial Implications

    How common is a divorce in your 60s? The latest divorce figures from the Office of National Statistics (ONS) show...

    Read more
  20. 18.2.2021

    Tax implications for divorcing couples

    As the end of the Stamp Duty holiday looms on 31 March 2021, that is not the only deadline that separating and...

    Read more
  21. london houses
    9.2.2021

    When can you claim PPR Relief on more...

    Family lawyers are familiar with ‘Mesher Orders‘ where the court orders that as part of the financial settlement on divorce,...

    Read more
  22. father with child
    6.4.2020

    Setting aside a financial remedy order

    What has been the impact of the coronavirus pandemic on financial remedy orders? Can you do it at all? Barder...

    Read more
  23. family in poppy field
    24.3.2020

    Divorcees could appeal financial settlements if they lose...

    Billions of pounds have been wiped off shares as uncertainty builds amid the coronavirus crisis, but what does this mean...

    Read more
  24. 23.1.2020

    Financial negotiations on divorce outside court

    A reminder from another court that an honest statement is best There was an interesting case in the Court of...

    Read more

VIEW ALL