When financial matters need to be settled as part of a divorce and they cannot be resolved through mediation alone, a Financial Remedy Application (now also known as a Financial Order) can be made. This is a procedure to establish how money and property is divided between the couple.

What is the procedure?

On divorce or dissolution, spouses and civil partners - as well as former spouses and civil partners - can make a number of financial claims against one another. These include claims for:

1. Maintenance 
2. Property
3. Lump sums, and
4. A share of pensions/attachment orders.

Generally efforts are made to resolve such financial claims by agreement but if that isn’t possible and one of the parties makes an application to the court, there will usually be three stages to that process:

1.     A first directions appointment

This is where the court checks that all finances have been properly disclosed and decides whether a valuation of assets is necessary or whether any other evidence is required before the proceedings move on to the next stage.

2.     A Financial Dispute Resolution hearing (FDR)

An experienced judge tries to help a couple reach a settlement by suggesting possible solutions to their financial dispute. If this is not successful the proceedings move on to the third stage.

3.     A trial - final hearing 

A different judge (because the judge who dealt with FDR in stage 2 has already given a view) hears evidence from both partners and then makes a decision. The decision will include orders relating to income, capital and pensions, and the judge will say whether there should be a financial clean break or not. 

What factors do the court take into account when deciding on a financial settlement?

The judge will consider all the circumstances of the family, including any dependent children. Where there is only just enough money to go round, the focus will be on financial need. If there is a surplus, then the principle of sharing assets will come into play. If one spouse has given up a promising career, there may be elements of compensation in any order (although this is becoming increasingly rare).

What happens with inherited assets?

It depends how much was inherited and when it was inherited. If the inheritance occurred at the beginning of a long marriage it is likely to be regarded as a matrimonial asset. But if it occurs at the end of a marriage or even after separation, it may be regarded differently. However, an inheritance can still be used to meet unsatisfied financial needs if a judge thinks it is appropriate to do that.  

It is possible to protect potential future inheritances using a prenuptial (sometimes known as premarital) agreement. Our family law solicitors can discuss this with you. It is even possible to reach agreement about such matters after getting married if you haven’t thought about it before.

Arranging child maintenance – how much should be paid?

The online calculator of the Child Maintenance Service will give you a clear idea as to the amount of money that would be regarded as an appropriate payment.

However, the maximum figure shown on the calculator can be exceeded by the court if incomes are very large, although it is important to note that a judge can’t order basic child maintenance unless it has been agreed between the parents – and even then, after 12 months the Child Maintenance Service could take over child support and make its own assessment.

Financial remedy proceedings are not easy to navigate. Early legal advice will help you reach a fair and reasonable division of your matrimonial assets.

Get in touch about financial remedy proceedings

Our family law solicitors are experts in this field and will be happy to have a free 15 minute no obligation telephone conversation to see how we can help.