Lead Forensics
Prettys Solicitors Ipswich

Family law

Financial Claims

If you need divorce advice, including help with financial settlements, the family and divorce lawyers at Prettys can help. We work with clients across Suffolk and Essex. Here are answers to some questions about the financial aspects of divorce. 

We are divorcing – what financial claims can I make?

As a spouse or former spouse you have the right to claim for any or all of the following:

What is an income claim; does it include child maintenance?

An income claim does not include child maintenance, which is something separate.  An income claim is maintenance paid by one spouse to the other if there is a significant difference in their respective incomes.  It is most likely to be paid where there is a long marriage and a long history of one spouse not working or not earning much.  If the spouses are reaching retirement, an income claim could be avoided by sharing pension provision (see below).  An income claim is also more common where there are young children and the primary carer’s ability to work is reduced by caring for the children during their minority.  The spouse claiming spousal maintenance will need to prove that they have maximised their income from all sources before claiming, which means they would be expected to increase their part-time hours if possible, or claim benefits that are available but presently not being claimed.  Both spouses’ income and outgoings are considered to decide whether there is a legitimate claim and whether it can be met by the wealthier spouse.  Consideration will then be given to how much should be paid and for how long.

What is a property claim; will I be forced out of my house?

A property claim usually centres on the marital home, but can include other property owned by either spouse.  The first consideration regarding the property is how much equity is in it – ie, market value less mortgage, any mortgage penalties, and costs of sale.  What remains is considered equity available for division.  Sale is not automatic; if one spouse can take over the mortgage and pay out the other spouse’s share of the equity, the house does not have to be sold.  The priority for the departing spouse is normally to be released from the mortgage.  If there is limited equity, it may be that the departing spouse has to stay on the mortgage for the foreseeable future because this safeguards the house as a home for any children.  Affordability is a key factor in resolving property claims – if neither party can financially afford the property living as a single household, then the property is likely to have to be sold.  Property claims can also extend to jewellery, art, antiques etc.  There are a number of creative ways property claims can be dealt with.

What is a capital claim?

Capital is normally savings, ISAs, policies, investments, bonds, etc.  It can sometimes be less relevant in whose name the monies are held; they can still be considered marital assets to be divided.  However, if one party built up the majority of the capital they may argue that they should retain the majority of it; whether or not this succeeds depends on the totality of the asset base and the various claims of the spouses that need to be met.

What are pension claims?

Pensions can often be overlooked, but they can also sometimes be the most valuable marital asset.  In long marriages particularly, pensions will be assets necessary to divide if one party has been a stay-at-home carer for children, or worked part-time, to allow the other party to pursue their career.  Each spouses’ pension value is considered to determine whether one spouse’s pension needs to be shared (ie, transferred) to the other to increase their pension provision.  As this can be a technical area, pension experts are sometimes brought in to assist the parties reach a financially fair agreement.

Can these claims be off-set against each other?

Yes, where appropriate.  Where relevant, one spouse may agree not to make a claim against a pension if they can keep the equity in the property.  One spouse may agree not to claim spousal maintenance if they have a pension sharing Order or a lump sum instead.  One spouse may want to take all of the capital and agree to leave the equity in the property for the other.  There are many options and much depends on what is available to divide, and whether the off-set proposed is fair and reasonable in all the circumstances.  You also need to consider very carefully the future worth of assets you may be relinquishing to achieve an agreement now. 

Do I need a solicitor?

Yes. This involves complex issues and you need to be sure that you are adequately protected now and in the future and so expert divorce advice is essential.  You will also need to record your agreement in a financial Order.

What is the “remarriage trap”?

This occurs if one spouse remarries after divorce but without there being a financial Order - unless that person has already applied for a financial Order for a lump sum or transfer of property in the divorce Petition or made a formal application to the court before they re-marry, then they are caught in ‘the re-marriage trap’. The effect of this trap is that they have lost the right to make those financial claims against their former spouse.  The other spouse who has not remarried can still make their financial claims in the usual way as they have not been caught by the remarriage trap.

What if we don’t want to make a financial Order?

If the spouses decide not to obtain court Orders dealing with financial provision, and in the event that the re-marriage trap does not apply, then the claims which each of them have against the other are simply left open. This situation is unsatisfactory as it creates a degree of uncertainty because it leaves the possibility of one spouse making a claim against the other at any time, particularly if one spouse’s financial position improves. On the other hand, where one spouse’s financial position is likely to improve substantially it may be in the other’s interest to delay a final financial settlement.

How can I contact you?

You can either call the Family Team on 01473 232121, ask for a call back here or e-mail Prettys here.

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