Christian Butler, Partner
January is typical renowned as a busy month for divorce lawyers as many people resolve to make life changes at the beginning of a new year. It is so important that anyone going through a separation or contemplating separating from their partner, has a good and clear understanding of their options. This is more true now than ever before given the tough economic conditions many are now facing and the burden of the cost of living crisis.
If someone is looking to apply for a divorce, they can now do so if they have been married for at least twelve months and one party decides that the marriage has irretrievably broken down. Parties can also submit a joint application for divorce, as opposed to just one party applying, with the ability to contest a divorce (almost entirely) now removed.
Prior to April 2022, the only alternative to blaming one partner for adultery, desertion or unreasonable behaviour, was to go through a period of separation. In April 2022, the so called “no-fault divorce” was introduced, which saw a surge in applications from couples looking to avoid the blame game, but many challenges continue to lie ahead for couples leaving a marriage.
Although the divorce procedure will usually take around 6 months, it is sensible to ensure that there is a legally binding Financial Remedy Order in place, formalising a financial settlement between the parties, before finalising the divorce. Without the closure of a Financial Remedy Order, either spouse can make a later claim or ask for financial support in future, which is something we are increasingly being asked to advise upon.
Despite the divorce process becoming less adversarial, the associated negotiating over finances and children is becoming an increasing challenge and, in some cases, is overlooked through lack of knowledge.
Many are now attempting to manage the process themselves, turning to online help or untrained mediators, only to discover that they may have agreed financial or childcare outcomes that leave them at a significant disadvantage, when professional advice and representation may have reached a fairer outcome.
When a couple are divorcing, if financial matters can be agreed (either through the direct discussions of the parties, through solicitors’ correspondence and negotiations, or through the mediation process with the assistance of a qualified mediator) they can apply for a Financial Remedy Order by Consent (sometimes known as a “Consent Order”) from the court, which sets out the full detail of financial settlement reached. In such circumstances, the parties are not ordinarily required to appear in court themselves, which can be both daunting and costly.
The Financial Remedy Order can include details of how assets will be divided, including cash, property, pension funds and other investments, and can, if appropriate, also include arrangements for maintenance payments, including child maintenance. Both parties have to agree and sign the draft Financial Remedy Order and a judge will consider the terms to make sure they are fair, reasonable, and demonstrate a fair division of assets. If deemed fair and reasonable, the court will approve the agreement to make it legally binding. The Financial Remedy Order will also generally include a clause to stop ex-spouses raising subsequent financial claims against each other, providing parties with what is known as a “clean break”.
A significant issue for parting couples comes in the complexity of capital gains tax liabilities following separation. When a couple first separate, transfers and disposals made during the current tax year can be on a ‘no gain, no loss’ basis. But once outside that first tax year, matters become complex and could involve tax charges on the spouse or civil partner who is transferring the asset. And the likelihood of this rises as financial matters are increasingly complex, and many divorces take longer to complete.
The Government has proposed legislation to change the rules for disposals that take place on or after 6 April 2023. These proposed changes would extend the window of ‘no gain, no loss’ transfers and disposals to three tax years after the end of the tax year of separation, or where there is a formal court order with no time limit.
Another area of concern is that couples navigating divorce without guidance may overlook the importance of pension sharing, particularly where a primary caregiver to children may not have been able to acquire their own pension assets. Expert pension advice is often necessary to ensure that where there is to be a Pension Sharing Order made, the pension sharing is calculated accurately and fairly.
Seeking professional expert advice is vital to ensure there is a reasonable outcome for both parties to a divorce. A reasonable and fair outcome should be entirely possible without recourse to the court to determine matters, which is ultimately what happens if a financial agreement cannot be reached between a divorcing couple.
Unless the parties’ assets are straightforward, it may take longer than four or six months for an agreement to be negotiated and thereafter a Financial Remedy Order prepared and submitted to the Court for approval to become legally binding, so seeking professional expert assistance as soon as possible is always advisable.
Parents are encouraged to reach their own agreement about when and for how long the children spend time with each parent.
Increasingly, due to the current cost of living situation, some couples are choosing to continue to live together, even when officially separated, or even post-divorce, including so-called ‘bird nesting’ arrangements, where the children stay in the family home and the parents come and go.
However, if the parents cannot reach an agreement directly, it is recommended they attend family mediation, to try to reach an agreement in that forum. If mediation is unsuitable then, as a last resort, parents can make an application to the Court for the Court to consider the child arrangements and impose an arrangement on the parents and children. This process is entirely separate from the divorce process.
At Hay & Kilner in most cases our charges are approximately £650.00 plus VAT for an uncontested divorce. Please note if there are issues surrounding the service of the divorce application or around jurisdiction, our costs are likely to increase from that stated. There is also a Court fee of £593.00.
Advice regarding child arrangements and financial settlements depend upon the complexity of the case.
Please do contact us for an initial consultation during which we will be able to provide you with an estimate of your likely costs for any further work that you request us to carry out on your behalf.
The team at Hay & Kilner, are experts in family law. We have a wealth of experience in dealing with divorce, child arrangements, financial settlements (for married and unmarried couples) and Pre-Nuptial and Post-Nuptial Agreements.
Our approach is conciliatory and constructive and we settle the vast majority of cases without recourse to a litigious court process. However, if necessary, we are adept at supporting and guiding our clients through the litigated Court processes in relation to divorce, financial and children matters. As a client of Hay & Kilner, you can expect to be provided with objective and sound specialist legal advice at all stages by a solicitor who cares about you and your family. We pride ourselves on delivering excellent client care with value for money.