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What's mine is yours: Explaining financial settlements upon divorce.

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Making the decision to get divorced is never easy. Anxieties can be exacerbated by misinformation being passed down by friends and family that, in an effort to help, only serve to worry. Myths surrounding financial matters pose one of the main areas of concern for those people considering divorce or separation.

Each and every relationship is unique and each and every couple choose to deal with their respective finances in a different way. As a result, the Court has to adapt to the individual circumstances of each case in order to provide the fairest solution to a couple’s financial separation. In order to do this the Court makes reference to the factors set out in Section 25 of the Matrimonial Causes Act 1973.

The factors to be considered under Section 25 include the income and earning capacity of both parties, the financial needs and responsibilities of both parties, the standard of living enjoyed by the family, the contributions of each party and any conduct which would be unfair to disregard.

Due to the individualist nature of these factors it is extremely difficult to predict how the Court might interpret any particular set of circumstances. It is true to say that the ‘yardstick of equality’ is often referred to by the Court when considering financial cases and it is commonly thought of as a starting point for settlement.

Unfortunately, entering into financial proceedings does come with some uncertainties. It is for this reason that legal advisers will often encourage parties to enter into negotiations with the other party either individually or with the assistance of lawyers. This helps to ensure that the power remains with the parties in the hope that an agreement can be reached which benefits all involved.

It should always be highlighted that these negotiations should not proceed without the parties having entered into full and frank financial disclosure of information. This would be required by the Court if proceedings became necessary and is important in order to facilitate healthy and successful negotiations.

If you or someone you know would like further information in relation to the contents of this article or any other family matter, please contact a member of our Family Department who will book you in for our half an hour free consultation.

This article is not a definitive statement of the law. It is designed as a free update on the law at the time of publishing. It is not a substitute for legal advice on specific facts and circumstances. BakerLaw LLP and/or the writer accepts no liability or responsibility for reliance on this article and recommends that you seek independent legal advice on your specific circumstances prior to taking any steps.