Agreeing a Financial Settlement is key when negotiating a divorce from your partner
It is important to note that the Divorce proceedings and Financial proceedings are two separate issues, and although they often run simultaneously, they are dealt with individually.
Financial Settlements are of utmost importance when finalising your divorce. Sometimes couples can agree their Financial Settlement from the outset without needing the Court’s intervention. If parties cannot agree then the Court will decide for them.
A Financial Settlement does not necessarily need to be in place for you to apply for a Decree Absolute to legally end the marriage. If you have not reached a Financial Settlement, it is advised that you do not apply for the Decree Absolute because your entitlement to certain assets of the marriage could be affected.
Some examples include pension funds, trust funds or other complex assets which cannot be transferred except to a spouse. There is the additional fact that if you remarry you could lose some or all rights in respect to any subsequent attempt to claim from your former spouse. You will also need to consider that if one of you dies before a financial order has been made, the surviving spouse will lose out on any automatic spousal benefits that would have been paid.
In some cases, it is worth considering delaying your application for Decree Absolute and to remain married, so that you can ensure a Financial Settlement has been agreed and the Consent Order has been sealed by the Court before applying for Decree Absolute.
The process is outlined below, from outset to Court hearing. Agreement may be reached at any point in the process, in which case both parties will sign a Consent Order which is then sealed by the Court.
1. Notice of application – Form A
Sending a completed Form A (‘Notice of an application for a financial order’) begins the Financial Settlement process.
2. First Directions Appointment date set
The court sets the date for First Directions Appointment (FDA). At this hearing the judge will set out a timetable for both parties to deliver up the information that both sides need to create the Financial Settlement.
3. Financial Disclosure – Form E
Both parties send their Form Es to the Court and the other side at least five weeks before the FDA.
4. FDA documentation
These documents are filed two weeks before the FDA:
- A Statement of Issues
- A Chronology
- A Questionnaire
- A Form G
5. Costs – Form H
Both parties send the Court a completed Form H just before the FDA meeting, listing any costs they have incurred.
6. FDA hearing at Court
The judge will decide what evidence must be provided and what questions must be answered by both parties in respect of the Financial Settlement.
The judge will set a timetable for both parties to disclose such information.
The judge will also set a date for the Financial Dispute Resolution Hearing (FDR). The purpose of the FDR hearing is to encourage discussion and negotiation between parties.
7. File proposals
Both parties answer questionnaires, provide eveidence and submit proposals to the Court for the Financial Settlement.
Both parties also submit a second Form H, listing updated costs.
8. FDR hearing at Court
The judge will try to get both parties to agree to a Financial Settlement. If not, the judge sets the date for a final hearing.
9. Final hearing
If there is no agreement, then both parties will submit updated Form Hs and the matter will be handed to a new judge to decide on a Financial Settlement.