Our team of experienced Family Lawyers have a wealth of experience dealing with financial settlements during divorce.
Below are answers to some of the questions we are most frequently asked about divorce settlements. Please click on a link to see the answer to that question.
If you have other questions, please contact us for a free consultation.
- What is a clean break financial settlement?
- Can I get financial maintenance from my husband / wife?
- Will my business be included in the financial settlement on divorce?
- Will my pension be affected by the divorce settlement?
A "clean break" is a settlement where all finances are settled at the point that the agreement is made, with no ongoing financial obligations, such as paying maintenance to a spouse.
It is usually achieved where financial assets can be split to settle the financial agreement in full.
Even if an amount of spousal maintenance had been agreed during negotiations, a clean break may still be achievable where enough assets exist to pay off the spousal maintenance in full in one go, for example by transfer of an asset which is equal to the value of the ongoing maintenance agreed.
A clean break agreement cannot be reopened at a later date, even if circumstances change.
Critically, you cannot get a clean break agreement in relation to your financial obligations to your children, only to your husband or wife.
Entitlement to ongoing financial maintenance will depend on a number of factors, including:
- How long you were married
- The income of each spouse
- Your standard of living before the divorce
- The financial needs of each spouse and the needs of any dependent children
- The future earnings capability of each spouse
- The contribution made to the marriage, either financial or by caring for children and looking after the family home
Contact us for an assessment of your circumstances.
Business assets owned by one of both of the parties will be included as part of the financial settlement as they are considered as part of the marital assets.
This still applies even if one party has built the business with no direct involvement from their spouse.
As part of a negotiated settlement, a business may still be able to be protected if enough other assets are available to achieve a fair split. For example, one spouse may hold on to the business by giving up their entitlement to their share in other assets, such as the family home. This is called "off-setting".
If capital assets do not exist to facilitate "off-setting", but the business is generating enough income, it may also be possible to pay out the other spouse over a period of time with income from the business.
The pensions of both spouses are no classed as assets of the marriage and will therefore be taken into account during the divorce settlement. This is particularly relevant where one spouse has a large pension pot and the other has little or none, for example a stay at home mum.
If this is the case then the financial settlement may be achieved in a number of ways:
- The spouse with the pension pot could give up entitlement to other assets of the marriage to off set the pension entitlement
- Payment of a lump sum to the other spouse
- A pension sharing order - part of the pension pot can be taken out and put into a pension in the spouse's name