One of the biggest decisions that you and your ex will have to make when you separate is how to divide your assets. Whilst arguing over the Boyzone CDs is probably something that you can sort out yourselves, the division of your financial assets, such as pensions, your business, investments and equity in the house is likely to require professional advice.
You may also be concerned about your financial future. However wealthy you are, divorce means that your money now needs to fund two households rather than one and your lifestyle is likely to need to change.
Negotiate Own Settlement
In an ideal world, I am sure that we would try to work out who gets what between ourselves. However, it is unusual that divorcing couples can come to an agreement about who gets what themselves. If you have agreed the division of assets yourselves, I would suggest that the financial settlement is drawn up by a lawyer and rubber stamped by the court, for your own protection in the future.
Some couples feel that they cannot come to an agreement themselves and need a third-party present to ask questions of them both. A mediator will not provide advice and is working for the couple, rather than one party or the other.
If mediation does not work for you, perhaps because one of you has considerably more financial knowledge and experience, you could both choose a family lawyer qualified in collaborative law. In this case, you would each have a lawyer and all four of you would sit around a table to discuss the issues and try to reach a reasonable compromise that both parties can agree to.
Traditional Family Lawyers
If you and your ex just cannot sit down in a room and come to an agreement, even with the support of a mediator or your own collaborative lawyers, then you may need to engage a traditional family lawyer. They will negotiate the financial settlement on your behalf. Usually an offer will be made and a response will be given by the other side. If no agreement can be made, the case may eventually go to court, where a judge will decide.
Who Gets What?
Dividing marital assets is not set in stone and depends on many different aspects; for example, the security of the asset, the earning capacity or both parties, the amount of time children will stay with each parent, the relative age of both parties etc. You may feel strongly that you deserve the settlement to be in your favour. However, even if you ask a court to decide, the judge may not agree and you will have spent a huge amount of money on lawyers, barristers and court proceedings in the meantime. If possible, this route should be avoided in preference for coming to an agreement.
How Can a Financial Planner Help?
As financial planners, we are brought into the process by both legal professionals and the couple themselves. Traditionally, financial planners have been engaged to implement Pension Sharing Orders, which are in place once the agreement has been made.
However, lifestyle financial planners can be of huge value when the negotiations are taking place, either working for both of the couple or one individual or the other. They will initially spend time getting to know the person (or people) and their future goals, ambitions, hopes and fears. They will then collect factual information relating to their current financial position. We can then look at how different financial settlements will impact them and their financial future. This gives clarity and an understanding of what they need to do to maintain or improve their lifestyle in the future. Many people do not understand what the money they are being offered actually means in practical terms.
If you think we can help and would like to talk to us about your own circumstances, please email Tamsin@smartdivorce.co.uk or telephone her on 07975 922766.
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Tamsin Caine is a Chartered Financial Planner at Smart Divorce. She specialises in working with separating or divorcing clients to help them to understand how to divide their finances to move forward with their lives.