Four Important Things to Consider Before Starting Divorce Proceedings
- Family Law
In the wake of the worldwide coronavirus pandemic and the enforced lockdown of families at home, already strained relationships are becoming more fractious than ever before. With COVID-19 expected to prove the catalyst for a significant spike in divorce numbers over the coming months, Warren Nichols, a partner in our family department, identifies four of the more salient issues to be considered when contemplating a divorce/separation.
1. What will happen to the children?
Arguably the most fundamental and sensitive factor to consider for any divorcing couple will be the impact on any children.
Child residence and contact issues are not an automatic part of the divorce process; in fact, issues concerning children are dealt with in their own right. In England and Wales, contrary to popular belief, the Courts do not make routine orders concerning residence and contact simply as an involuntary by-product of divorce. Unless there are extenuating circumstances which warrant it, the Courts will only tend to make decisions in relation to children where parents are unable to firstly reach an agreement between themselves.
The needs of a child will be the primary concern for the Courts in determining how any marital assets should be divided on divorce so it is important that notice of a Petitioner’s intention to seek financial provision for any relevant child is made clear at the outset.
2. Are you in business together?
For couples in business together, a divorce is always going to bring with it far-reaching and sometimes multifaceted complications. A key consideration has to be whether you want the business to continue once the divorce is finalised, or indeed, can it continue to be owned and/or run by the both of you post-divorce? If not, what will happen to it?
In the absence of a partnership agreement that sets out what should happen in such a situation, the general legal standing will be that joint assets are divided on a 50-50 basis, or that the shareholding of each party will dictate how interests are divided (in the first instance). Any proposed division will, however, be considered in the context of other marital assets.
Whatever is happening in your personal relationship, you are best advised to try and act rationally and without emotion when it comes to any venture or enterprise you may operate with your spouse. All too often, business owners will take steps out of anger, only to find this approach leads to detrimental outcomes further down the line for everyone concerned. An early action plan can help to eliminate those initial worries.
3. How will pensions be looked at?
One of the most significant assets involved in any divorce (after the family home) is the pension.
Pensions may need to be split on divorce and there are various ways of doing so. In England and Wales, the total value of all private pensions built up by both parties can be taken into account, regardless of whether or not they were taken out prior to the start of the marriage. Whilst there may be arguments over any pre-marriage contributions which may have been made by either party, the Court can delve into that “non-marital” element if the respective needs of the parties justify it.
Pensions can be shared (where a Court directs a percentage of one party's pension is separated and credited to a policy held in the name of the other party) – known as “pension sharing”. Alternatively, a “pension attachment” order can be set up whereby there is a direction of the Court to the effect that a percentage of the benefits to be received by one party under the pension scheme can, at the time of their receipt, be re-directed to the other party. Pensions can also be offset against capital assets where the party retaining his or her pension receives less of the capital assets in order to cater for this imbalance.
It is prudent to take advice from experienced divorce solicitors (as well as pension experts/financial advisors) before making any sort of decision regarding pensions and worthwhile collating your pension information early on in the process, particularly where this information can take a little while to filter through from the various scheme administrators.
4. If you or your spouse has been declared bankrupt…
In the event of such an eventuality, the whole process of dividing assets on divorce can become very complicated and could give rise to serious implications for any financial settlement.
When a party has been adjudged bankrupt, almost all their assets cease to belong to them, but instead vest in the Trustee in Bankruptcy. Where the family home is owned jointly, the house cannot be transferred into the sole name of the non-bankrupt spouse without permission from the Trustee, and this will usually only be granted in circumstances where the spouse is in a position to buy the bankrupt spouse’s share at a reasonable market value.
Bankruptcy will also affect lump sum and maintenance payments so it is vital to consult expert family law solicitors if this situation applies or may apply to your individual set of circumstances.
If you are contemplating divorce, there is a lot to consider. Why not discuss it with knowledgeable, expert divorce solicitors? Summit Law LLP has a solid reputation in the field of divorce and family law. Our friendly, helpful specialists are considered amongst the best divorce lawyers in London and are ready to advise and guide you in all aspects of the divorce process.
Please see our divorce page for more information here.
For questions about divorce or family issues (at any stage) please get in touch with our specialist team today on 020 7467 3980 or email email@example.com.