Divorce: Financial arrangements

2. HOW MUCH DOES A DIVORCE COST?

The cost of divorce varies by case, depending on solicitor fees.

Basic costs begin with a £410 court fee to start the divorce proceedings (payable by the ‘petitioner’ only). This is followed by a £255 court fee to issue financial proceedings, if you cannot agree financial arrangements between yourselves.

Your solicitor’s fees will be an additional cost to the charges outlined above and will vary depending on the complexity of the case. If there are no disputes over money or children, fees can start from around £150-£200.

For more information about our services and the costs involved, our free initial enquiry will provide an estimate of our fees.

3. KEEPING DOWN THE COST OF DIVORCE

The best way to minimise the cost of divorce is to agree on as much as possible directly with your partner and, where possible, avoid using a lawyer.

However, even if you both approve of the divorce and resulting arrangements, it is advised that you use a lawyer to draw up a final, formal document. This ensures the two of you are fairly covered and commit to your individual promises.

Mediators will add additional costs to your divorce; however, if you can’t finalise arrangements between the two of you, this is still a more cost-effective method than taking matters to court. You must consider mediation before you can go to court.

4. DIVORCE AND CHILDREN

Sorting any practical matters related to a divorce can be tougher if you and your partner have children.

Try to agree on maintenance payments and fair arrangements allowing you both to spend time with your children. If you’re struggling, you may wish to consider employing a mediator to help.

Although there is a fee for this service, it’ll cost less than going to court. There are also emotional benefits to reaching an agreement through mediation, and outside of a court room.

The timing of your divorce can have an impact on personal and capital gains tax, so you may wish to seek financial advice on the best time to transfer any assets, or sell property or shares.

5. DIVORCE FINANCIAL SETTLEMENT

Once you and your partner have decided how to divide up financial assets, it’s important you formalise these decisions.

Don’t rely on verbal assurances; instead, have a lawyer draft a consent order for you and your partner to sign.

This is then presented in court and your lawyer will use it to request a financial order, which the court will grant if it agrees the financial proposals are fair.

It’s common for a court to request more information before a ruling is made, so you may be required to fill in additional documentation. You may also be asked to provide proof of ownership for assets you brought into the marriage, assets accumulated during the marriage, pensions, debts, and assets acquired by inheritance.

6. THE FAMILY HOME

If you cannot agree on the best way to provide a home for your children, and the case goes to court, priority will always be given to the welfare of the children.

Where a family home is the main asset, the primary carer and the children will usually be allowed to remain in the house until children have finished their education.

Where finances do not allow for the cost of maintaining the family home, you may need to move into a smaller house.

This can be a contentious area, and one where you should seek legal advice before making any major decisions.

Mediation should be considered early on if you’re likely to need help resolving financial issues. In fact, you must meet with a Mediator at a Mediation Information and Assessment Meeting (MIAM) session before you can take your matter to court.

How can I protect myself when the family home is in my partner’s name?

When divorcing, all assets need to be identified and valued in order to determine what needs to be divided. This includes any property.

Once you recognise the marriage has irretrievably broken down, you can take steps to protect your interest in the property by registering a notice of home rights with the Land Registry. This can help stop your partner from selling the property without your knowledge or consent, until the divorce is finalised.

Even if the property is not in your name, it remains the marital home and you have the right of occupation for as long as you are married.

You might also be entitled to a share of the proceeds if the house is sold. This may not be 50/50 split, but any funds could help towards the cost of another home, so naturally you’ll want to take legal advice to claim whatever you’re entitled to.

7. RECEIVING FAIR CHILD MAINTENANCE AND ALIMONY

Child maintenance payments are calculated using fixed methods.

The Child Maintenance Service can work out how much you should receive and collect the payments on your behalf, should you wish it. If you and your partner can agree a sum, you can arrange a child maintenance schedule without involving the courts.

In terms of alimony (spousal maintenance), there is no fixed formula for calculating payments and there are a number of ways it can be finalised.

It is best to agree payments between yourselves without the need to go to court, with a decision then written into your divorce agreement. Alternatively, you can use mediation to try and resolve any outstanding issues; this will be faster and less costly than taking matters to court.

8. YOUR EX-PARTNER’S CONTRIBUTION TOWARDS THE MORTGAGE

If the mortgage is only in your partner’s name, then they are liable for making payments.

If it is a joint mortgage, both you and your partner are ‘jointly and severally’ liable, meaning you are both responsible for payments both jointly and individually.

In practice, ‘joint and severally’ means if your partner moves out and decides to stop paying the mortgage, you’ll have to pay the full amount yourself.

9. I HAVE NO MONEY

If you are in financial difficulty, or are worried your divorce may cause you to become so, you may be entitled to claim benefits, such as tax credits. The best way to find out what you might be entitled to is to contact HMRC Tax Credits.

If you are the sole adult occupant of the house, you may also be eligible to a Council Tax reduction, which could be reduced further if you’re on a low income. Contact your local council for more details or visit the Citizens Advice Bureau for information on who qualifies for a Council Tax reduction.

If you are a low earner, you may be able to secure maintenance payments from your partner. If this cannot be agreed between you, you can make an application for maintenance pending suit when you file for divorce. This is a form of interim maintenance payment until any final arrangements are confirmed.

There may be additional costs associated with filing such an application, so it’s best to discuss your options with a lawyer before making a final decision.

10. BREAKING UP WHEN COHABITING

Many couples choose to live together without getting married. While you may feel no different to a married couple in emotional terms, under the law, cohabiting couples do not share the same legal rights as those who are married.

This can make things difficult if the relationship breaks down, particularly in regards to finance and property. If children are involved, it’s important to protect their future too.

Nobody wants to think about a potential break up, but it’s sensible to plan for the future with a living together agreement (also called a cohabitation agreement).

This agreement ensures that, regardless of how your relationship might change in the future, both of you are legally protected.

11. CREATING A PRENUPTIAL AGREEMENT?

A prenuptial agreement is an agreement made before marriage which provides guidelines on how a couple’s assets are to be distributed in the event of a divorce.

Some might perceive it as unromantic, but prenuptial agreements (sometimes called premarital agreements) allow you to agree in advance what should happen to each person’s assets and finances should the marriage break down.

This way, you can make a fair agreement, rather than risk one of you losing a large chunk of assets in the event of a divorce.

If you have a prenuptial agreement in place, and need to clarify how this might affect your divorce, then you should get legal advice as soon as possible.