Sorting out the marital finances and deciding who will get what is not always as straightforward as one would imagine.
The key aspect of sorting out the financial issues during a divorce is to first identify what and how much is in the financial ‘pot’. Each party should disclose all their financial interests, including money, saving, investments (including pensions & insurance) and assets.
When we have all the financial information for both parties, we can then look at how it should be distributed, taking into account each of the parties’ current and future needs.
In an ideal world both parties would voluntarily disclose all their financial assets and then come to an amicable, realistic and fair agreement as to who should get what.
This agreement could then be drafted into a ‘Consent Order’ and sent to the court for formal approval and adherence.
This ‘ideal’ scenario would negate the need for parties to go back and forth to court, thus incurring high legal fees and lengthy court proceedings.
Unfortunately, the reality can be quite different. There are often times either party refuses to fully co-operate and disclose all of their financial details voluntarily and so going to court to seek a court order for full and frank disclosure will become necessary.
Usually during these types of proceedings, the biggest issue is always getting to the bottom of what exactly is in the financial ‘pot’.
In complex cases there may be a need to instruct an expert to investigate either parties’ finances if we are not satisfied with the other parties’ representation of their financial position.
Often these cases can become increasingly complex with the unfolding of each parties’ financial entitlements and/or discoveries of further investments.
Full and frank disclosure means that both parties have provided the court with details of all their circumstances, namely;
a)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;
b)the financial needs, obligations and responsibilities which each of the parties to the marriage has or is likely to have in the foreseeable future;
c)the standard of living enjoyed by the family before the breakdown of the marriage;
d)the age of each party to the marriage and the duration of the marriage;
e)any physical or mental disability of either of the parties to the marriage;
f)the contributions made by each of the parties to the welfare of the family, including any contribution made by looking after the home or caring for the family;
g)in the case of proceedings for divorce or nullity of marriage, the value to either of parties to the marriage of any benefit (for example, pension) which, by reason of the dissolution or annulment of the marriage, that party will lose the chance of acquiring;
The court will give regard to all that is in the financial ‘pot’ together with factors (a)-(g) above, with the aim of putting each party in the financial position they would have been in had the marriage not broken down and each had properly discharged his/her financial obligations and responsibilities towards the other.