If you are a resident of England or Wales who is in the middle of a divorce, sooner or later you will inevitably face the issue of finance.
One of the most important issues is how financial assets are divided, and you might be wondering whether you are legally required to instruct a solicitor to deal with this.
To offer a quick answer – you don’t need a solicitor to divide assets during a divorce. Couples are free to work out a voluntary agreement or use a mediation service.
But while legal representation isn’t compulsory, we strongly advise it. The main reasons are to ensure that any agreement is legally binding and prevents future financial claims, but there’s more to it than that.
In this article, we examine the options of asset division in a divorce; looking at the process of reaching a voluntary agreement, Consent Orders and why they matter, mediation and court proceedings, and when you should instruct a solicitor.
Voluntary agreement
In England and Wales, divorcing couples may negotiate their own financial settlement. This may include decisions about how to divide; a family home, additional properties owned by the couple, as well as savings, investments and pensions.
Business interests may also be considered as financial assets, and debts or liabilities which are owed can also come into the equation.
Voluntary agreement relies on open communication and full financial disclosure from both parties in order to ensure a fair agreement. If an agreement can be reached in this way, the approach can be less stressful and quicker than going to court.
A key distinction to recognise, however, is that an informal agreement is not legally binding after a divorce.
Legal binding is required
Here, we will touch on what is required to make sure a financial settlement is legally binding in England and Wales.
Agreements on the division of financial assets must be recorded in a Consent Order and approved by the Family Court if they are to be legally binding. A Consent Order is a formal legal document that sets out how assets are to be divided. Once it is approved by a judge, it becomes enforceable.
Unless a Consent Order is approved by the court, your former partner could potentially make more financial claims against you in the future. This may be a claim against property, pensions, savings, inheritances, or other assets that have been acquired after separation.
The court will require both parties to provide a summary of their financial circumstances before approving the order. This is known as a Statement of Information.
The role of mediation
If you and your former spouse can’t reach an agreement between you, you may consider mediation as a solution.
This involves a trained mediator who will act as a neutral; helping both parties discuss and negotiate. It’s a structured environment which can help to expedite the process of reaching a financial agreement.
Mediation is encouraged as a faster solution than court proceedings, which can do less damage to a relationship post-divorce. This is particularly important where children are involved.
There is always the possibility that mediation does not result in an agreement. In this scenario, either party may apply to the Family Court for a financial order. The court determines how assets are divided, applying factors set out in divorce law.
When to use a solicitor?
To reiterate, you aren’t legally required to instruct a solicitor when it comes to the division of financial assets following a divorce. However, professional advice is especially important when there are complex financial arrangements, or if significant assets or pensions are involved.
A solicitor can also be helpful when one party has greater financial knowledge or control than the other. If business interests or self-employment income need to be taken into account, legal advice can also be helpful in this regard.
Ultimately, a solicitor isn’t only necessary if you can’t agree on what constitutes a fair division. A legal representative will ensure that thorough and transparent financial disclosure takes place and advise you on what a court would likely consider fair.
At Bennett Smith Solicitors, our separation solicitors in North Wales are there to advise on financial settlements and prepare court-approved Consent Orders. Call us today on 01248 671994.
