Our Family law expert, Nicola Matthews answers the questions her clients frequently ask about the financial issues arising in divorce proceedings.
What sort of settlement can I expect?
Firstly, list the value of all assets and deduct all debts, including any mortgages.The starting point is that both parties receive half of net assets, but all the circumstances of the family are taken into account together with the following factors to see whether there is a good reason why either party should receive more than half:
Will the house have to be sold?
If the equity in the home (i.e. the value of the property less the mortgage) makes up a significant percentage of total net assets then it may have to be sold to share the assets fairly.
However providing suitable accommodation for children under the age of 18 is usually top of the list of priorities. So, if the equity in the property is more than 50% of net assets, but the parent with whom the children will live cannot find a cheaper property in their local area, they may still be able to remain in the family home.
What happens to our pension funds?
If you divorce it is possible to obtain a ‘Pension Sharing Order’ from the Court so a percentage of one spouse’s pension is transferred to the other spouse’s pension fund to achieve a fair distribution.
What about the family business?
A family business is an asset that is taken into account as a resource available to the parties. It is usual to try to reach an agreement whereby one party keeps the business and the other receives other assets in exchange. Sometimes it is possible for money to be extracted from the business to be paid to the party who is leaving the business behind. Each case is unique and requires specialist legal advice.
How is child maintenance calculated?
The basic rule is that the parent with whom the children do not live pays a percentage of their net income to the parent with whom the children live, as follows:-
The figures can be altered depending upon whether the children stay overnight with the paying parent and if that parent has children from other relationships for which they are financially responsible.
Is any spousal maintenance payable?
The ideal situation is for spouses to become financially independent of each other after divorce. However if one spouse’s income is significantly more than the other, it may be appropriate for the higher earner to provide monthly support to the other. This may be for a limited period of time.
Nicola Matthews is a Law Society Family Law Panel member, qualified Collaborative Lawyer and local chair of “Resolution”, an association of specialist family lawyers who adopt a firm yet conciliatory approach to family cases. For further information contact Nicola on 0191 232 8345 or email: firstname.lastname@example.org