Financial Settlement

According to the latest research, women face a bigger income drop than men in the year after their divorce. Our family law solicitors look at the latest research and explain how the structure of a financial settlement and childcare arrangements can affect your post-divorce income.   Contact Evolve Family Law for Specialist Family Law Advice.   Research into the impact of divorce on incomes The latest research from Legal & General reveals that on average, women see their income fall by 50% in the year following their divorce.  In contrast, men’s incomes fall by 30% in the year following the divorce. L&G refer to this as the divorce gap. The L&G research goes deeper and reveals that: Nearly a quarter of women (24%) felt financially vulnerable after their divorce. Nearly a fifth (19%) of women struggled to pay their bills. 13% of women are concerned about the financial implications of retiring alone. How about the men? Only 16% of men felt financially vulnerable, and only 10% of men struggled to pay essential bills. 8% of men were more concerned about their retirement plans and retiring alone after their divorce. Some people may think the L&G research shows that women worry more about finances than men, but the data goes beyond the headlines and explains the rationale behind the divorce gap.   Research into the reasons for the divorce gap The L&G research revealed the reasons for the divorce gap as: 63% of women felt the financial impact of stopping sharing finances and outgoings with a partner, compared to only 39% of men. Roughly a quarter of the people surveyed said that the wife was the primary breadwinner before the divorce, and in 22% of marriages, the husband and wife earned about the same amount. After their divorce, around a fifth of women returned to employment.  Women are twice as likely as men to reduce their hours of work after their divorce because of parenting responsibilities. Only 13% of divorcing couples considered pension splitting when reaching a financial settlement. Women tend to prioritise non-pension assets when reaching a financial settlement. 28% of women did not receive pensions as part of their divorce settlement compared to 17% of men.   You might also be interested in [related_posts]   Will a divorce have an impact on my income? When a couple separates, it is common to move from a two-income household to a one-income household, resulting in a reduction in income. Unfortunately, it is often not possible to achieve a corresponding decrease in outgoings across the two households created by the separation. It is crucial that your divorce solicitor looks carefully at the impact of divorce on your income, as that should massively influence the size and structure of the financial settlement. Reaching a divorce settlement is a bit like putting a jigsaw together because the capital settlement (the share of the family home sale proceeds or the split of savings and investments) can influence how much income you need to meet your outgoings or your ability to pay spousal maintenance. For example, if you receive sufficient equity from the sale of the family home, you may be able to buy a new property either mortgage-free or with a modest mortgage. If you are the financially stronger spouse and receive a reduced share of the equity in the family home, you may not be able to afford to pay spousal maintenance and pay your bills.   Income support after a divorce If a divorce will impact your income, then you can consider ways to enhance your income through: Spousal maintenance. Child support. Improving your earnings capacity through increasing your hours of employment or retraining.   Income issues after divorce There can be income issues after divorce because with all three options, problems can arise, such as: The court prefers to achieve a clean break with no spousal maintenance payable in cases where a clean break is appropriate and there is sufficient capital to achieve that type of financial court order. Spousal maintenance stops if you remarry and may end if you cohabit with a new partner or if your former spouse loses their job or their income decreases. A former spouse may not comply with a spousal maintenance order, so you may be forced to apply to the court to enforce the order. Child support is not payable if parents agree or the court orders equal shared parenting under a child arrangement order. This rule applies even if your former spouse earns substantially more than you. You may agree on a financial settlement based on shared parenting, but your ex-partner then says they cannot share care, leaving you with additional childcare responsibilities. It may not be possible to increase your earnings capacity if you are undertaking the lion's share of parenting or if you were out of the job market as a stay-at-home parent during the marriage.   Assessing if you will receive or be ordered to pay spousal maintenance Whether the court will order that you pay spousal maintenance or receive it depends on a range of factors. These include: Whether you have young children to support, and whether the care of the children impacts your earnings capacity. Whether any disability or age impacts your ability to seek employment or increase your income, or your ex-spouse’s ability to do so. Your income and earnings capacity, and those of your former spouse. The extent of your respective reasonable outgoings. The length of the marriage. Other factors, such as the existence of a prenuptial agreement that sets out whether and how long spousal maintenance should be payable after your divorce. Depending on the ages of the children and future earnings capacity, the court may order that a former spouse should pay spousal maintenance on a time-limited basis so that you can adjust to the divorce and reduction in household income. Alternatively, the court may prefer to award you more capital so you can buy a home with an affordable mortgage (compared to your ex’s financial settlement), meaning that you have lower monthly outgoings than your former spouse and therefore no requirement for spousal maintenance.   Talk to a family lawyer   Whatever your priorities, it is best on separation or divorce to take legal advice from a specialist divorce solicitor so you can understand the range of options for your financial settlement and work out which one is best for you and your family.   Contact Evolve Family Law for Specialist Family Law Advice.

If you think your ex-partner is hiding assets in divorce proceedings, it is best to get expert family law advice on your options. Contact Evolve Family Law for expert divorce and financial settlement advice.   The requirement for financial disclosure in divorce financial settlements Divorce solicitors will tell you that husbands and wives are under a duty to provide full and frank financial disclosure of their assets when negotiating a financial settlement. That applies whether you are negotiating a financial settlement through: Direct discussions. Solicitor negotiations. Family mediation. Financial disclosure is also a requirement if a family law judge or an arbiter is deciding the financial settlement in financial court proceedings or through family arbitration.   The extent of financial disclosure  The court has a standard list of financial disclosure requirements, but a husband or wife can request additional information and ask questions. The judge will decide if the extent of the additional questions and the request for extra documents is relevant and proportionate. You may not want to engage in extensive financial disclosure if: Both of your finances are straightforward, and You both had access to bank statements and assets, so you know that money has not been moved from accounts, and You can reach a negotiated financial settlement. Every family situation is different. You probably know if your ex-spouse has hidden financial information and assets from you throughout your marriage. Alternatively, you may suspect that they started doing so when they met someone else, or when the marriage got into difficulties, and the relationship started to drift apart.   Red flags and financial disclosure in financial proceedings If your husband or wife appears keen to reach a clean-break financial settlement without providing financial disclosure, this may raise a red flag for your divorce solicitor. The family lawyer may question why your spouse objects to financial disclosure and why they are pressing you to reach an agreement so quickly. You need some minimum paperwork to check your spouse’s financial settlement proposals and for the court to be with the terms of a proposed financial court order that a family law judge is asked to make. If an estranged spouse is trying to pressure you to agree to a financial settlement without first providing financial disclosure and wanting you to accept their word about the extent of the assets or their current value, then you should consult a financial settlement solicitor. Your ex-partner might be totally honest and want to ‘cut to the chase’ and get a binding court order, but you are entitled to see the required financial disclosure and to take family law legal advice on their financial proposals and the wording of the court order.   You might also be interested in [related_posts]   Reasons why assets are hidden from spouses There are many reasons why an ex-spouse may try to hide assets or minimise their value. Divorce solicitors come across these common excuses: It is inherited or gifted money. It is savings from one spouse’s income. The ex-spouse’s new partner owns their current house, and the ex-spouse says they have no right to any equity in the property.  There is no need to get a business, pension or other asset valued, as your ex thinks you should take their word that the asset either has no value or is not sellable. Money was owed to a family member and was transferred to them to repay a loan rather than to hide assets Cash put into additional bank accounts was forgotten. An ex thinks property owned abroad or owned before marriage is irrelevant to the financial settlement and should therefore not be disclosed. These are all excuses. None of them is a good reason not to provide complete financial disclosure. Sometimes an asset will not be relevant to a financial settlement, but your financial lawyer needs to know about the asset and its current value so they can advise you on its relevance in your family circumstances. For example, a pension accrued before a short marriage with a cash equivalent transfer value of £10,000 may not be of significance. Your ex may waste their time and money by trying to hide an asset that may be of limited relevance because of the duration of your marriage or your ages. However, by failing to disclose the pension, you and the court may be far more sceptical about whether your ex-spouse has fully disclosed the existence of the pension or how honest their other financial disclosures are. For example, you may question the extent of your ex’s declared self-employed income or the reason they have transferred money to a sibling or new partner.   Steps to take if an ex is hiding assets If you are separated or getting divorced and believe your ex is hiding assets, you may need urgent financial settlement advice and help with an injunction application to safeguard and preserve the money until the court makes a financial order. Examples of when a spouse may require a financial injunction include: Your ex is transferring money or property to a third party. Your ex is putting their pension in payment and taking the maximum tax-free cash sum to put the money out of your reach. Your ex is syphoning money out of the family business to make sure the family business has a lower value placed on it, as profits will be reduced. Your ex is buying property overseas or transferring assets abroad. Your ex is moving money out of joint bank accounts and putting it into cryptocurrency or bitcoin.   Financial injunction applications A financial injunction order is a temporary measure to stop your ex-spouse from hiding or disposing of assets. It is best to consider applying for a section 37 injunction rather than assume that, in financial settlement court proceedings, your ex-spouse’s new partner, parent, or sibling can be joined to the financial application to try to unravel the transfer of assets. If you have not already done so, a divorce solicitor will also advise you to start financial court proceedings for a financial court order. Within the financial remedy application, the court can make financial disclosure orders that your ex will need to comply with.   Consequences of noncompliance with financial disclosure rules If your ex does not comply with the financial disclosure orders, then you can ask the judge to enforce the disclosure orders against your ex or ask the court to draw inferences. For example, if the court ordered disclosure of historical bank statements to reveal what happened to the equity of £100,000 after the sale of a buy-to-let property. If your ex flouts the disclosure order, you can ask the court to draw inferences as to why and ask the court to add back in the £100,000 so you get a greater share of the other family assets.   Financial proceedings and ex hiding assets If you have started financial proceedings and you are not satisfied with your ex’s Form E financial disclosure, a specialist family solicitor can review the financial disclosure with you and draw up a list of additional questions and request extra non-standard paperwork. For example, if your ex-spouse is the director and shareholder in a family business and you suspect they have been syphoning money off to their new partner by creative accounting or use of the director's loan account, you can ask for a forensic accountant to value the business and look at the accounting concerns. Alternatively, you can ask the court to make financial disclosure orders to help you investigate if: Your ex is self-employed, and the family lifestyle does not match their declared earnings. Your ex has withdrawn significant sums from a business or personal account, and the withdrawals are not their usual pattern of spending. Your ex previously mentioned an asset that was a rainy-day asset or pension, but there is no mention of the asset in their financial disclosure. There are lots of ways a tenacious divorce solicitor can ‘get to the bottom’ of financial disclosure, through your background information and knowledge of your ex, combined with financial disclosure orders,  valuations and freezing injunctions.   Contact Evolve Family Law for expert divorce and financial settlement advice.

In this blog, our family law solicitors examine what happens if you keep financial secrets during a separation or divorce.   Contact Evolve Family Law Today for Expert Family Law Advice.   Reasons for hiding money during a relationship There are many reasons why someone might hide money or not reveal their financial situation whilst in a relationship, such as: Wanting to build up a safety net of savings that their partner won’t spend, so there is a rainy-day savings fund in case of redundancy or a large unforeseen bill, such as replacing the boiler. Feeling the need to save money so that there is an escape route from an abusive relationship where the partner secreting the money is afraid that without the hidden money if it will be impossible to leave their controlling partner. Hiding credit card debt or loans because you know that your partner will worry about the debts. Feelings of embarrassment about having incurred debt. In some cases, the debt may have been incurred before the new relationship, and it now feels ‘too late’ to mention it. If a couple decides to separate, it can be challenging to reveal financial secrets that were kept during the relationship. However, when negotiating a financial settlement, there is an obligation to provide full financial disclosure.   Financial secrets and separation, and divorce   At Evolve Family Law, our divorce solicitors will ask questions about your finances and those of your spouse to provide the best advice on financial settlement options. Sometimes people are reluctant to mention undisclosed credit card debts or loans, as their husband or wife doesn’t know about them. However, it is essential to do so as the debts may impact your ability to take over the mortgage on the family home or secure another mortgage to purchase a new property. In cases where there is debt, then in financial court proceedings, the court rarely undertakes a forensic exercise into how the debt was incurred and whether, for example, you should have bought the shoes or motorbike. Instead, the court will ask: Is the debt family debt– in other words, although the debt was hidden from a husband or wife, was the loan or credit card money used for the benefit of the family? What impact does the debt have? The court will want to know if the debt will prevent a husband or wife from buying another house, staying in the family home, or meeting their other needs. In addition to debt and divorce, when it comes to financial disclosure on separation or divorce, there is an obligation to provide complete and frank financial disclosure of all your assets. That includes secret bank accounts that your husband or wife doesn’t know anything about, or money given to a family member to ‘hold’ for you, or cash that you keep.   You might also be interested in [related_posts]   The consequences of not providing full financial disclosure Failure to provide full financial disclosure after a separation or divorce may mean: Your spouse will not go to family mediation to reach an agreed financial settlement, or the family mediator may say that mediation is not suitable as full financial disclosure is a requirement for mediation. Your spouse may start financial proceedings so they can get an order requiring you to file a Form E financial disclosure document and supporting paperwork, and can ask additional questions about your finances and transactions. Your spouse could ask the court to make additional disclosure orders, ask for valuations of assets such as the family home or a family business and make Section 37 injunction orders to prevent the sale or transfer of assets to third parties. The court could draw inferences or make findings against you in a financial settlement court hearing. For example, if your family businessgenerates cash but according to your accounts, you receive an income that amounts to less than your essential outgoings (mortgage payments, utility bills or other known expenditure), then the court could make inferences or findings against you. Any financial settlement recorded in a separation agreement or in a financial court order could be overturned later if it is discovered that the agreement or order was made without you having provided full financial disclosure. Therefore, whilst there may be many reasons why you would want to keep things secret during a relationship, when it comes to a separation or divorce, there are many compelling reasons why you should provide full financial disclosure.   Manchester and Cheshire Divorce and Financial Settlement Solicitors Evolve Family Law specialises in family law, divorce and financial settlements. If you need advice on your divorce and financial settlement options, our friendly experts can help.   Contact Evolve Family Law Today for Expert Family Law Advice.

If you are separating or divorcing and have questions about how your husband or wife’s behaviour will affect your financial settlement, then the divorce solicitors at Evolve Family Law can help you.  Call Evolve Family Law or complete our online enquiry form. Divorce proceedings and unreasonable behaviour Since the introduction of no-fault divorce proceedings, all you need to say to obtain a divorce is that, in your opinion, your marriage has irretrievably broken down. There is no longer a requirement to explain the reasons behind the breakdown of the relationship, and no need to cite and give examples of a spouse’s unreasonable behaviour. Divorce law was changed to make it less acrimonious. A husband or wife no longer needs to think of six to eight ways in which their spouse behaved unreasonably. That’s a good thing, as no-fault divorce avoids disputes over who should start the divorce proceedings. Although you can no longer refer to unreasonable behaviour in divorce proceedings, you can refer to unreasonable behaviour on the part of your spouse when applying for: An injunction order – a non-molestation order or occupation order. Children law order, such as a child arrangement order, specific issue order, prohibited steps order or relocation order. Financial court order – if the circumstances justify it. Bad behaviour and the impact on divorce financial settlements When you ask the court to make a financial court order, you can ask the court to consider your spouse’s bad behaviour when deciding on the size or structure of the financial settlement. The court is duty-bound to consider several factors (referred to as the Section 25 factors, as they are contained in Section 25 of the Matrimonial Causes Act 1973). One of the factors is conduct if the court thinks it would be inequitable to disregard it. Alleging behaviour in financial  proceedings When you file your Form E in the financial court proceedings, you have the option to include a reference to bad behaviour. The court may ask you to file a detailed statement setting out your behaviour allegations and how they should affect the financial settlement, and your spouse will be given the opportunity to reply. The threshold to raise bad behaviour is high. Although your husband or wife may have behaved very badly by having an affair, being abusive or being a spendthrift, you should speak to a divorce solicitor about whether the bad behaviour will be considered relevant in the financial court proceedings. A specialist finance lawyer will advise you on the best way to secure a financial court order that meets your needs after balancing the impact of the bad behaviour on you and the likelihood that the court will consider it relevant, having regard to statute and caselaw. Is the bad behaviour gross and obvious? The court’s view is that a spouse’s conduct will only affect the financial settlement if it is ‘gross and obvious,’ and so serious that it would be unfair for it to be ignored. Whether a spouse’s conduct has been serious enough to be classed as ‘gross and obvious’ will be a highly subjective decision. What is classed as bad behaviour in financial court proceedings? Several forms of bad behaviour or conduct may affect the size or structure of a financial settlement. These include: If a spouse has a gambling addiction and has gambled away a lot of the family’s money. If a spouse has assaulted and injured the other spouse, so that the injured spouse’s ability to work and earn money has been affected. If a spouse has been found guilty of a financial criminal offence. For example, a conviction for fraud will prevent the spouse from providing spousal maintenance or child support for their family. If a spouse has remortgaged the family home without telling the other spouse, and used the mortgage funds for their purposes. Every family situation is different, so although you may believe your spouse’s behaviour was gross, it is best to check with a divorce lawyer. The family law solicitor can advise if the specific behaviour is likely to have an impact on your financial settlement after assessing all the circumstances.  You might also be interested in [related_posts]   What is financial misconduct during the financial court proceedings? A spouse or former spouse may behave badly during the financial court proceedings. Examples of this type of behaviour include: Dragging out the financial proceedings, or running up needless and excessive legal costs. This isn’t usually reflected in the financial settlement. Instead, the court can order the irresponsible spouse to pay some or a proportion of the other spouse’s legal costs. Hiding assets or transferring assets to family members. The court can be asked to make a Section 37 injunction order or to join family members into the financial court proceedings. A spouse lying about their financial situation and not giving full financial disclosure. The judge can deal with poor behaviour  during the court proceedings by: Ordering the guilty spouse to pay some or all the other spouse’s legal costs. Structuring the financial settlement differently. Assuming, when making a final financial decision, that the guilty spouse is much wealthier than they say they are. If the lying is discovered after a final decision, the decision or financial court order can be set aside, and the process started again. Financial settlements can be structured differently if the judge accepts that a spouse has behaved badly or is not trustworthy. For example, a judge may think that it is best to award a spouse a larger share of the equity in the family home because there is a risk that if the equity were split equally, the wealthier spouse would not pay the ordered spousal maintenance because their behaviour during the marriage or the proceedings indicates they are not trustworthy. How much does bad behaviour change the financial settlement? The impact of the conduct on the financial settlement will vary greatly and entirely depends upon the circumstances of a family. A specialist family law will consider: The bad behaviour. The impact of the bad behaviour on the other spouse. The additional costs of arguing that bad behaviour is relevant to the financial court order. The likely prospects of the court agreeing that the bad behaviour is relevant to the financial settlement and awarding a better financial settlement. In every case of bad behaviour, your divorce solicitor will carry out a cost-benefit analysis of whether the additional time spent arguing your valid points will help you achieve a better financial settlement. Sometimes it won't, but your divorce lawyer will instead recommend an alternative strategy to get you the best financial settlement possible, such as: Filing a questionnaire to ask specific questions about your spouse’s financial disclosure and asking for more paperwork. Asking the judge for permission to instruct a forensic accountant to assess the value of a family business. Instructing a shadow accountant to investigate complex financial transactions or investments. Asking a pension actuary to value the pensions accurately. Why choose Evolve Family Law as your divorce lawyers? Here are three reasons to choose Evolve Family Law as your divorce solicitors: We are a niche law firm specialising in family law and private client services with offices in Holmes Chapel and Whitefield. All our divorce lawyers are experts in their field. They are also approachable and will do their best to answer all your questions and help you reach a financial settlement or childcare arrangement that suits you. Many of our family law services are provided on a fixed fee basis. When we charge on an hourly basis, we are transparent about our fees. Here are some client reviews. If you need family law legal advice, we are here to help. Call Evolve Family Law or complete our online enquiry form.

A Guide to What Assets will be Shared in Divorce Proceedings and how Couples and Their Financial Advisors can Safeguard Family Wealth From Being Shared in Divorce Financial Proceedings Standish v Standish [2025] UKSC 26. On 2 July 2025, the Supreme Court ruled on the classification of assets in divorce financial proceedings, specifically whether matrimonial assets and non-matrimonial assets should be shared when the court makes a financial order. The decision in the Supreme Court case of Standish is important because it emphasises how crucial it is to work with your family law solicitors and financial advisors to ensure family wealth and non-matrimonial property is protected. At Evolve Family Law, our specialist family lawyers can advise you on wealth protection strategies and advise you in financial settlement negotiations and court proceedings. For expert family law advice, call our team of specialist family lawyers or complete our online enquiry form. The Supreme Court decision in Standish v Standish You can read the full court ruling here. Supreme Court rulings in family cases are rare due to the high cost and litigation risk associated with appealing from the original decision to the Court of Appeal and then to the Supreme Court. The decision in Standish radically alters the size of the financial award to Mrs Standish, but it also: Explains how the sharing principle in dividing matrimonial assets should work. Says that the sharing principle does not apply if the asset is a non-matrimonial asset unless it is a needs case. Offers guidance on when a non-matrimonial asset can convert to a matrimonial asset and therefore be subject to the sharing principle. Matrimonial assets and non-matrimonial assets Depending on the extent of your family's wealth, categorising assets into separate pots can be helpful. They are: Matrimonial assets or family assets, and Non-matrimonial assets or non-family assets If all your assets are matrimonial assets, they will be shared with your spouse. The starting point is an equal division of assets, but the court can order a different outcome after considering the factors in Section 23 of the Matrimonial Causes Act 1973. These include the needs of dependent children, the duration of the marriage, and other relevant factors, such as housing requirements and earning capacity. The court will only share an asset classified as a non-matrimonial asset if the sharing of the matrimonial assets does not meet one spouse’s reasonable needs. Ownership and the classification of matrimonial assets and non-matrimonial assets Some people believe that if an asset is jointly owned, it is considered a matrimonial asset, whereas if it is held in a spouse’s sole name, it is deemed a non-matrimonial asset. The law is more complicated than that. The judgment in Standish confirms that matrimonial assets are ‘’the fruits of the marriage’’. However, the fruits do not need to be owned jointly to be classed as marital assets. If a husband and wife cannot agree on whether an asset is a matrimonial asset or a non-matrimonial asset, the court can rule on the issue. This is what the Supreme Court did in the Standish case. Family lawyers recommend the use of prenuptial agreements and postnuptial agreements if you want to reduce the risk of a dispute over whether an asset is a matrimonial asset or a non-matrimonial asset. You might also be interested in [related_posts] How a non-matrimonial asset can convert into a matrimonial asset The Standish case involved an argument that the husband’s non-matrimonial assets had converted into matrimonial assets when he transferred millions to his wife, to enable her to place the funds in a trust as a tax mitigation strategy for the benefit of the children. The money was not placed in a trust, and the wife argued that the transfer of the funds from her husband's sole name into her name converted the money from a non-matrimonial asset to a matrimonial asset. The Supreme Court disagreed. While the Supreme Court said assets could change category by a concept referred to as ‘’Matrimonialisation’’, it had not occurred when Mr Standish transferred funds to his wife. The concept of Matrimonialisation If a non-matrimonial asset is matrimonialised, it becomes a family asset. That’s a crucial transformation as under the family court principles, a matrimonial asset is available for sharing between the husband and wife. The court will start on the premise that all matrimonial assets should be shared equally between the husband and wife, unless there is a reason to depart from this principle of equality. If you have family wealth or are a financial advisor, accountant or tax advisor, you need to understand the Standish principles of matrimonialisation and how to avoid it. In Standish, the Supreme Court said: Matrimonialisation occurs where there is intention by the contributor to share non-marital property, coupled with treatment by the parties of this non-marital property as shared over time. The Standish Matrimonialisation principles can be summarised as: Matrimonialisation will not be applied narrowly or widely by the court. When deciding if a non-matrimonial asset has become a matrimonial asset, what is important is how the husband and wife have dealt with the non-matrimonial assets and whether their course of dealing shows that, over time, the husband and wife have matrimonialised the non-matrimonial asset into a matrimonial asset. If a husband or wife wants a share of a non-matrimonial asset, they need to be able to demonstrate that the other spouse intended to use or treat the assets as matrimonial assets despite their initial treatment as non-matrimonial assets. The longer an asset is shared or treated as shared by spouses, the stronger the evidence that the asset has become a matrimonial asset. Financial lawyers should advise on the proportionality of arguing whether an asset is a matrimonial asset or a non-matrimonial asset, or if a non-family asset has been matrimonialised.   The facts in the case of Mr and Mrs Standish Every family law case is decided on its facts. As every family is different, it is hard to say that a family situation is an exact match to an earlier court decision. In the case of Mr and Mrs Standish, Mr Standish kept his wealth separate from his wife, except for some accounts and a jointly owned family home. In 2017, he transferred £80 million to his wife as part of a tax mitigation strategy. Instead of transferring the assets into a trust, Mrs Standish separated from her husband and started divorce proceedings. She argued in the Supreme Court that the transfer of funds into her name converted her husband's non-matrimonial asset into a matrimonial asset. The Supreme Court disagreed because it held that there was ‘no Matrimonialisation’ of the assets because the transfer was to save tax and was for the benefit of the children not the wife and therefore the money was not being treated by the husband and wife for any period of time as an asset that was shared between them. Accordingly, the wife’s financial award was limited to £25 million, representing her share of the matrimonial assets. Classifying assets as non-matrimonial assets and avoiding Matrimonialisation You may not be as wealthy as Mr. or Mrs Standish, but it is essential to understand how family wealth and pre-marital assets can and should be protected. Here are some examples of where family wealth or pre-marriage assets may require protection: Money inherited from extended family. Parents gifting substantial sums as part of their inheritance tax strategy. Pre-marriage owned family business. Second marriage and a desire to protect family wealth for the benefit of children from a first marriage. Substantial civil compensation damages. Pension fund to which pension contributions were made prior to the relationship. The best way to ensure that there is no dispute over whether a particular asset or account is a matrimonial asset or non-matrimonial asset is to: Sign a prenuptial agreement to categorise specific assets as non-matrimonial assets. Review the prenuptial agreement if circumstances change. Speak to a family law solicitor when wealth or financial planning to ensure that non-matrimonial assets are not being matrimonialised by wealth planning strategies. Sign a postnuptial agreement if you come into unexpected wealth that you want treated as a non-matrimonial asset, such as an inheritance, the gift of money from a parent, the transfer of shares in a multi-generational family business or the release of capital or income from a trust fund. If you have connections to more than one country, as you or your spouse is from overseas, speak to a family lawyer with international family law expertise who can advise on jurisdictional issues and the impact on your prenuptial agreement or postnuptial agreement. Speak to Evolve Family Law At Evolve Family Law, our specialist prenuptial agreement solicitors collaborate with accountants, tax advisors, wealth planners, and trustees to help families understand decisions such as Standish v Standish and how to best plan their financial futures. For expert family law advice, call our team of specialist family lawyers or complete our online enquiry form.    

If a member of the extended family gives money to a husband or wife during their relationship, the money is undoubtedly very welcome at the time of the gift or loan. When a couple splits up, family gifts or loans can complicate things. There may be a dispute over whether the money was a gift or a loan and how the gift or loan should be treated in the divorce and financial proceedings. Our North West divorce solicitors provide specialist advice on the treatment of loans in divorce and financial proceedings. Contact our specialist family lawyers for a consultation on your divorce and financial settlement. What is a family loan in divorce financial proceedings? A family loan is typically an informal loan between a family member and one of the divorcing spouses. It could be verbal or written, but if it is written, it could have been prepared without the benefit of legal advice, and the terms of the agreement may not be clearly defined. Often, the spouse who received money from their side of the family will say it was a loan, while the other spouse will say it was a gift. If agreement cannot be reached on whether the money received was a loan or a gift, the family court can be asked to decide the issue in financial proceedings brought by either the husband or the wife. The person who lent the money can also apply to intervene in the financial proceedings so they can make their case and have legal representation. If the court says the money is a hard loan, it will affect the asset pot available to be distributed between the husband and wife. The size of a loan and its classification could substantially impact the financial court order. In this sequence, the court must decide: Was the family money a gift or a loan? If it was a loan, was it a hard loan or a soft loan? In light of the court's finding on the loan status, what is the extent of the family assets available for distribution by the judge? What is a fair financial settlement for the husband and wife? Family loans and reaching a financial settlement in mediation If you are trying to reach a financial agreement in mediation, you may need specialist legal advice on complex points, such as: Whether the court would be likely to say a loan was hard or soft, and the impact on the financial settlement. The value of complicated assets, such as pensions or shares in a family business. The relevance of specific factors, such as pre-marriage owned property, gifts or inheritances. Family law solicitors can advise you on specific queries to help you reach an agreement in mediation and can provide mediation support to help you convert your mediated agreement into a binding financial court order. Family loans in financial proceedings In divorce financial proceedings, there can be disputes about: Whether money from friends or family members was a gift or a loan. Whether the gift was to the husband or wife or the couple jointly. If the money was a loan, the repayment terms. If the money was a loan, whether the debt should be included as a debt in the asset schedule. If the money has been repaid to the extended family member because of the divorce, whether the funds transferred to the relative should be added back into the asset schedule. Whether the extended family member should intervene in the financial court proceedings. Things can get very acrimonious when family money is in issue, with one party saying the money was a gift and the other a loan. Treatment of family loans in divorce and financial proceedings The case of P v Q (Financial Remedies) [2022] EWFC B9 (10 February 2022) clarified how the court should treat family loans in financial proceedings after a divorce. The case emphasises the importance of extended family members taking legal advice before making a payment to a married family member to ensure it is clear if the money is a loan, a joint gift, or a gift to one spouse, with the money ring-fenced in the case of separation or divorce. The case of P v Q (Financial Remedies) [2022] EWFC B9 The case of P v Q involved an international family based in the UK and Germany. The wife was German, living in England, and the husband was English, living in Germany with the couple’s two children. The case had many unusual points, including the value and liquidity of company shares, as the case was heard when Russian forces were massing at the Ukraine border and there were expectations of share price volatility. Divorce and financial proceedings were started in the UK. The wife said the husband had given his mother £150,000 to reduce the family assets and to reduce the amount the husband would be ordered to pay her as a financial settlement. The husband said he had repaid his mother the £150,000 loan, and the money should not be added to the asset schedule. The husband’s mother had given each of her three children £150,000 to help them with housing. No loan documentation was drawn up, and there was no evidence that the mother had gifted the money as part of an estate planning strategy. No demand was ever made for repayment of the £150,000, and there was no discussion about the circumstances when repayment was required. In evidence, the mother said she hoped the family would repay the money to her if she needed it. The husband repaid the £150,000 to his mother without his mother asking her son for the money. The wife argued the transfer was a device to remove £150,000 from the asset schedule, so she lost £75,000, using the sharing principle of a 50:50 split if £150,000 was added back into the asset schedule. The judge had to consider whether the £150,000 (and other family monies) were gifts or loans. The judge held that for money to amount to a gift, there must be an intention to give away with no expectation of repayment. Accordingly, the judge held that the £150,000 payment was a loan. The arguments didn’t stop there. Using case law, the judge had to consider whether the loan was a hard or soft loan to determine whether the £150,000 should be added back into the asset schedule. The judge concluded the loan was a soft loan. This meant the loan monies were added back into the asset schedule, thus increasing the amount to be shared between the husband and wife by £150,000 and increasing the size of the wife’s award. [related_posts] The law and the treatment of family loans in financial proceedings The judge in the case of P v Q said he had to consider the factors set out in Section 25 of the Matrimonial Causes Act 1973, together with any relevant case law, to decide: How to treat the loan and How to split the assets. Section 25 Matrimonial Causes Act 1973 broadly says it is the duty of the court when making a financial court order to have regard to all the circumstances of the case, first consideration being given to the welfare while a minor of any child of the family who has not attained the age of eighteen. Amongst other things, and of relevance to family money and loans, the court should pay particular regard to: The income, earning capacity, property and other financial resources which each of the parties to the marriage has or is likely to have in the foreseeable future, including in the case of earning capacity any increase in that capacity which it would in the opinion of the court be reasonable to expect a party to the marriage to take steps to acquire, and The financial needs, obligations, and responsibilities that each of the parties to the marriage has or is likely to have in the foreseeable future. Is a family loan a soft loan? A loan can be classed as hard or soft. The definition is important because a soft loan will not carry as much weight in divorce financial proceedings as a hard loan. A hard loan is more like a commercial or contractual agreement, while a soft loan is an arrangement between family members without too much formality. In P v Q, the judge said that when looking at the treatment of loans in financial proceedings, the court needs to consider: If there is a contractually binding obligation by a party to the marriage towards a third party, the court should consider whether the obligation is a hard obligation debt or a soft debt. There is no set test to decide if a loan amounts to a hard or soft debt. A common feature of family loan analysis in financial proceedings is determining whether the obligation to repay will be enforced. The court should consider common factors that point toward a hard or soft loan. Evidence that a loan is a hard loan in financial proceedings Factors that point to a loan being classed by a judge as a hard loan include: The terms of the obligation feel like a normal commercial arrangement. There is a written loan agreement and a written demand for payment. There is a threat of litigation or intervention in the financial settlement proceedings. There was no delay in enforcing the debt. The amount of money owed is such that it would be less likely for a creditor to waive the obligation to pay. Evidence that a loan is a soft loan in financial proceedings Factors that point to a loan being classed by a judge as a soft loan include: The debt is owed to a friend or family member who remains on good terms. The loan is informal without a commercial arrangement feel to the loan. There has been no written demand for payment despite the loan repayment date having passed. There has been a delay in enforcing repayment. The amount of the money is such that it would be more likely for the creditor to be likely to waive the obligation to repay. Divorce and private client considerations when making or receiving family loans If you are thinking about making a gift or loan to a family member, it is sensible to take private client advice to: Understand estate planning and ensure your gift is tax-efficient for inheritance tax purposes, and Ring-fenced and protected in case the family member gets divorced. This can be achieved through a formal loan document, preferably combined with a prenuptial agreement or postnuptial agreement. Specialist divorce and financial advice on the treatment of loans in divorce proceedings Our expert divorce solicitors can help you if you are: Disputing a payment made by a family member was a loan and not a gift. Arguing that the money given by your family to you individually or as a couple was a loan. The loan maker who needs advice on intervening in the financial proceedings to protect your loan and financial interests. Our divorce lawyers will: Give an unbiased view of whether the court will likely say the money is a gift or a loan. Whilst you may not like the opinion about the treatment of the family money, you don’t want to waste time or money on an argument that you are not likely to win. Look at the additional legal costs of arguing whether the family money was a gift or loan, as you don’t want to spend more on legal costs arguing the point if the costs will be more than the amount to be gained in your likely financial award. Our family law solicitors can also help prepare prenuptial and postnuptial agreements, and our private client lawyers can advise on estate planning, gifting, and family loans. Contact our specialist family lawyers for a consultation on your divorce and financial settlement.

Sorting out how you split the equity in the family home can be tricky. It can be a lot harder to reach a divorce settlement when you are also trying to agree on who pays the bank loan and credit cards, what happens to the pensions, and whether one of you should pay spousal maintenance and for how long. In this blog, our family law solicitors answer your questions on divorce financial settlements.  Call us for expert family law advice or complete our online enquiry form.  Reaching a divorce settlement  In the UK, divorce settlements are discretionary and based on reasonable needs. The statutory factors make it hard for couples to reach a financial agreement as English family law doesn’t say that a husband and wife must split their assets equally or that a wife must return to full-time employment when the youngest child is 11 or that a husband will always keep a family business owned before the marriage or even that the divorce court must follow a prenuptial agreement. If there are no hard and fast rules, how are divorce settlements reached? Ultimately, if a husband and wife can't agree, it is down to a family court judge to decide what happens to each asset and make a financial court order. The judge will look at statutory criteria and case law when making the order. When a divorce solicitor advises on likely divorce settlement outcomes, they base their advice on their experience in negotiating settlements and representing spouses in contested financial court proceedings.  Divorce settlement advice   If you need divorce settlement advice, it's crucial to speak to a divorce lawyer. The solicitor will talk to you about your circumstances before offering advice. Examples of why information and talking are important include: It is often assumed there should be a 50/50 split of assets after a long marriage. However, that assumption could be displaced for several reasons, such as the wife can't get a mortgage and needs more than 50% of the assets to buy a new family home for herself and the children or most of the assets were inherited by the husband before the marriage and the wife can comfortably rehouse herself and meet all her other needs with 30% of the total assets. Alternatively, the couple may have signed a prenuptial agreement to ringfence inherited money Clean breaks should be achieved to end any financial or other ongoing ties between husband and wife. However, if the family home is sold, the equity won't be enough for either the husband or wife to buy another property, so both parents will be stuck renting. Maybe the parent who is the primary carer of the children should stay in the family home until the youngest child is 18. The house can then be sold, and the proceeds of the sale can be split in percentages fair to the ex-husband and wife   Discretion and how it works with divorce settlements Family law solicitors will outline the discretionary factors the court applies when making a financial court order after a contested final hearing of a financial application. The factors are just as relevant if you are negotiating an agreement through family mediation, solicitor negotiations or trying to do a deal at a financial dispute resolution hearing. The discretionary factors are contained in Section 25 of the Matrimonial Causes Act 1973. The lawyer shorthand for them is ‘Section 25 criteria’. The court’s first concern should be the welfare of any dependent children and how the children's needs will be met. The court should then consider the Section 25 criteria: The income, earning capacity, property, and other financial resources that the husband and wife have or are likely to have in the foreseeable future. With earning capacity, this includes any increase in that capacity which it would, in the opinion of the court, be reasonable to expect a husband or wife to take steps to acquire The financial needs, obligations, and responsibilities that the husband and wife have or are likely to have in the foreseeable future The standard of living enjoyed by the family before the breakdown of the marriage The age of the husband and wife and the length of the relationship  Any health issues affecting either the husband or wife or their children   The contributions made by the husband or wife or likely to be made in the foreseeable future to the welfare of the family, including any contribution as a homemaker or stay-at-home parent  The conduct of the husband or wife if that conduct is such that it would, in the opinion of the court, be inequitable to disregard it The value to the husband and wife of any benefit (for example, a pension) that they will lose the chance of acquiring because of the divorce With this list of factors, it is easy to see how, in some situations, a judge may order a different financial settlement from another judge. However, the difference in judicial view should be within a band of reasonableness. For example, it would be unreasonable for one judge to say an equal split of equity in the family home and for another one to say a 90/10 split of the equity in the family home would meet the Section 25 criteria. With the uncertainty of judicial discretion, most divorcing couples prefer to try to negotiate a divorce financial consent order based on their family lawyer’s assessment of the Section 25 criteria. [related_posts] How to get the best divorce settlement  Some people think the only way to get the best divorce settlement is to apply to the court for a financial order.  They may be right. For example, if their former spouse is refusing to provide financial disclosure, is transferring assets to friends or family or is refusing to agree to a valuation of the family home or business. In other situations, a divorcing husband or wife must weigh up the costs and time in making a financial application against the benefits to be gained.  A family law solicitor will tell you that if your ex-spouse is only offering you 10% of the family assets, you need to go to court. It is far harder to advise on the decision to start financial proceedings if your former spouse is offering you 45%. The decision may then come down to the value of the 5% of the assets you may be losing out on balanced against the costs of going to court. Things are often more complicated than that, as you may also dispute your ex-spouse’s valuation of his business or home, or you may argue that your ex-partner is offering you assets that are not as valuable to you as the ones you want. For example, they may be proposing that they will keep all the equity in the family home and you keep all your pensions, but that deal doesn’t give you the capital to rehouse yourself even though it will provide you with an income in eventual retirement. At Evolve Family Law, our North West divorce solicitors focus on finding out what your ideal divorce settlement would look like and why. We then work on discovering the full extent of the family assets and any property that might be classed as non-family assets. We can then have an informed discussion with you about your realistic settlement options so you can weigh up the pros and cons of court proceedings over family mediation or arbitration or weigh up the advantages of spousal maintenance over a bigger share of equity in the family home. Having the right expert support behind you can give you the confidence to say yes or no to what is on offer from your ex, knowing that your lawyers have a strategy to get you the divorce settlement you need. Call us for an appointment to discuss your divorce settlement or complete our online enquiry form. 

When you separate from a husband or wife you need to reach an agreement over what happens to the house and to decide how your assets are split. Until you do so your life can feel in limbo. Our North West divorce solicitors focus on helping you reach a financial agreement that meets your needs. One way to do that is through a private financial dispute resolution. Family lawyer, Robin Charrot, explains what a private financial dispute resolution is and why it may be the best solution for you. For family law advice call our team of specialist divorce lawyers or complete our online enquiry form. What is a financial dispute resolution hearing? A financial dispute resolution hearing is a stage in the financial settlement court process. Financial court proceedings follow a set path timetabled by the court: Financial application sent to court by the husband or wife The court issues the financial application and provides a court timetable Form E financial disclosure by the husband and wife First directions appointment hearing – a preliminary hearing Court-ordered valuations, reports and further financial disclosure is obtained Financial dispute resolution hearing – a settlement hearing Final hearing (if required) Step six, the financial dispute resolution (FDR) is a court or judge-led settlement hearing. The FDR judge hears legal submissions from the representatives of the husband and wife. The FDR judge then says what they think a judge at the final hearing might order if the application had to go to the expense of a final hearing. The financial dispute resolution hearing is designed to encourage a husband and wife to reach a financial settlement. Their financial agreement is made into a binding financial consent order by the FDR judge. You cannot be forced into reaching a financial agreement at a court FDR. However, it may be in your best interests to do so to save money and to avoid the risk of your ending up with less after a final hearing. A negotiated compromise ensures that you walk away from court with a financial settlement that you are satisfied with rather than one that a judge imposes on you after hearing evidence at a final hearing. If divorce lawyers can't negotiate an acceptable financial settlement for you at the FDR, they ask the FDR judge to list the financial application for a final hearing. The final hearing won't be listed before the judge who gave their settlement views at the FDR hearing. Any offers or concessions made at the FDR hearing cannot be brought to the judge’s attention at the final hearing. Do you need a court financial dispute resolution hearing to reach a financial settlement? You only need to start financial proceedings if you can't reach a financial agreement amicably. Ways to reach an agreed financial settlement include: A private financial dispute resolution arranged outside of the court process Solicitor negotiations Roundtable meeting Family mediation Arbitration Using the One Lawyer Service at Evolve Family Law Reaching an agreement using collaborative law Direct discussions between husband and wife A family law solicitor can briefly discuss each option and recommend the one they think would be best for you. For example, if your ex won't give financial disclosure the recommendation will be to start financial court proceedings as the court can order financial disclosure and enforce the order. What is a private financial dispute resolution? A private financial dispute resolution is like a court-based financial dispute resolution hearing but instead of waiting for a court date, the FDR takes place with a private judge (a jointly appointed barrister) in their chambers or at another agreed venue. In a private FDR, you and your husband or wife pay privately for the services of the FDR judge. In addition to these fees, you also pay the cost of your divorce solicitor and any barrister instructed on your behalf. [related_posts] Preparing for a private financial dispute resolution You and your family law solicitor need to be well prepared for the private FDR to ensure that it has the best chance of helping you reach a financial settlement. This is achieved through: Financial disclosure by husband and wife Asking any extra relevant questions about the financial disclosure and getting answers Any necessary valuations obtained. For example, a valuation of the family home, business or pensions Any necessary reports obtained, such as on the tax implications of the sale or transfer of assets Checking things like your housing needs, mortgage capacity, job prospects or other relevant factors Looking at what you want to achieve from the private FDR so you go to it understanding the FDR process and knowing what you are prepared to compromise on and what your ‘bottom line’ is What are the advantages of private financial dispute resolution over a court FDR hearing? The advantages of a private FDR are: A private FDR is quicker than a court FDR hearing. Court delays and backlogs mean there could be a substantial wait for a court hearing date. You may want to reach a decision quickly so you can sell the family home or shares in a family business A private FDR is more civilised. At court, you may be negotiating outside the courtroom in the corridor because of a lack of interview rooms or feel rushed because the FDR judge has several other cases. That doesn’t happen with a private FDR. Improved facilities and time together with separate consultation rooms improve the prospects of your being able to reach a financial agreement With a private FDR the divorce solicitors select the FDR judge. At a court-based FDR, you will be allocated a judge to hear the FDR. The judge at a court FDR may not have specialised in family law before becoming a part-time or full-time judge. In a private FDR, your divorce lawyers jointly select the person who will conduct the private FDR. This can be particularly helpful if there are complex aspects to your financial settlement or if you need your private FDR judge to have experience in a particular area of family law What happens if you reach an agreement at a private financial dispute resolution? If you reach a financial agreement over how to divide your assets at a private FDR your family lawyer will either prepare a document called a ‘heads of agreement’ or a draft financial court order. The financial consent order will be sent to the family court for approval together with a financial statement of information. The statement of information gives the court sufficient information for the judge to decide whether to make the requested order. The court normally makes the agreed order without raising any questions and without the need for a court hearing. Why do you need a financial court order after reaching an agreement at a private FDR? You need a financial court order from the court after reaching an agreement at a private FDR for several reasons: If your agreement includes pension sharing the pension administrator will require the sealed court order and final order of divorce before they can implement the pension sharing order Some mortgage companies need a copy of a court order before they will agree to remove one spouse’s name from the mortgage. Alternatively, the mortgage company may require the order as proof that one spouse is receiving spousal maintenance and therefore has sufficient income for their planned borrowing If the agreement cannot be implemented you need a financial court order to be able to apply to court to enforce what was agreed If you have questions about financial settlements after a separation or divorce our specialist Northwest divorce solicitors can help guide you to reach a financial settlement and secure a financial court order. For information on private financial dispute resolution hearings or advice on divorce or family law call our team of specialist divorce lawyers or complete our online enquiry form.