I have had this situation with a number of my clients in the past week. They have received an offer for settlement of the finances but without them having exchanged financial information. We are therefore without full disclosure.
In addition, I have spoken to a couple of people who have been asked by their lawyer what they want in terms of a settlement. Again, in my opinion, until there is full disclosure, we don’t fully understand what there is and may be suggesting more than is available or less that would be reasonable.
What’s the problem?
It might seem on the face of it, that you know whether the offer is a good one or not. However, so that you can truly understand the offer, you need to have the full picture, i.e. an accurate valuation of all the assets of the marriage, the liabilities of the marriage, the income your both receive and the fair value of the pension benefits you each have. Without this information, it is impossible to see whether the offer is fair or not. For example, half a bank account with £10 in it is very different to half a bank account with £1million in it!
The only response you can have, is whether it is enough for your needs, and remember there may not be enough in the pot to satisfy the needs of both of you.
If one of you owns a business, it is important that the business is valued accurately by an independent valuer. Most couples insist on this when it comes to the residential or commercial property they own, but often fail to value the business. The business does of course provide income to the marriage, and this should be borne in mind, as should the transfer of this income to the spouse retaining the business, if there was previously a shareholding by each party.
Just this week, I have come across two clients where their spouses want to keep their pensions out of negotiations and have not properly disclosed their values. As you may have heard me say before, pensions are often the second biggest asset of a marriage and may in some cases be the biggest asset. It is vital that they are not ignored, and the correct valuations are disclosed. From the couple’s perspective, this means ensuring the details are completed fully with CETVs on the form E. It also means that if there are different types of pensions, defined benefit pensions (final salary, career average, etc), or defined contribution pensions with guarantees, that an actuarial report is instructed to ensure that everyone has the full picture. For more information, please refer to the Advice Now Guide https://www.advicenow.org.uk/pensions.
If you agree to use the Child Maintenance calculator on the CMS website to work out the amount that should be paid, it is important that the receiving spouse understands the income that this will be based on. For employed spouses, this is relatively straightforward. For those who are directors of limited companies, it is more complex. The salary and dividends will be taken into account. For those who are self employed, we need to understand the net profit of the business.
What do I want?
When we work with clients, we help them to understand what they need from the marital pot to begin their new chapter, move on, and live the life they wish to. We can use specialist software, which enables us to show you how different scenarios and financial settlements might impact your future lifestyle so that you understand the amount that you need. Whilst this can be done without understanding the full value of all the assets, you might not be able to have everything you need if there are not sufficient assets available. Therefore, this needs to be our starting point.
If you feel that we could help you to move forward with sorting out your finances on divorce, please do get in touch or book a meeting using the link https://calendly.com/tamsin-caine/15min.