Can I reach a financial settlement with my spouse before our Divorce?

Separation can be one of the most difficult periods in anyone’s lives, particularly when there are joint assets and or children concerned. Divorce or dissolution is not necessarily the first option for married couples or those in civil partnerships who wish to deal with their financial affairs. 

You can look at finalising a financial settlement before, during or after Divorce or dissolution.  However, you do need to consider how the agreement reached will be recorded to prevent any disputes later.

It is a misconception that once you are divorced your spouse cannot make any financial claims against you.  This is not the case.   Unless financial claims are dismissed by the Court, either party can come back and make further claims.  This could cause issues if you have purchased a new property after separation, received an inheritance or won the lottery for example.  The Court would look at your circumstances at the time of the application and if your spouse is struggling financially at that point, the Court could order you to share your income, capital or pension.

It is therefore important to seek a legally binding financial clean break as soon as possible.  This can only be effectively achieved by seeking a Court Order during or after the Divorce.  Ideally, we would recommend that you address this during your Divorce so that once the proceedings have concluded, the financial matters are resolved at the same time.

If you are wanting to reach a financial settlement now and Divorce later, then there is another option that you may want to consider and that is a Separation Agreement. This would offer the certainty of a written agreement reflecting the intentions of both parties at the time of separation.  You can then look to have the terms of the Separation Agreement converted into a Court Order later down the line when the Divorce is issued. 

An important consideration to note is that a Separation Agreement is not legally binding in England and Wales. However, in the event of any future disagreement, the Agreement can be used to provide the Court with evidence of what both parties had agreed would happen with their assets upon separation if there was later a dispute. Despite the Agreement not being legally binding, you should not enter into any agreement unless you intend to be bound by its terms.

It is vital that both parties share a common understanding of the financial assets and liabilities involved.  This means both parties would need to undertake the process of financial disclosure so that an agreed schedule of assets and liabilities can be annexed to the Agreement.  Both parties would also need to take independent legal advice upon the contents of the Agreement before signing the same. 

Entering into a Separation Agreement could prove to be a quick and efficient way of reaching a financial settlement between you and your spouse, with no need to worry about how long the Divorce could take.  You would have the protection of knowing that the agreement reached is in full and final settlement of all claims arising from the breakdown of your marriage.  You would be able to proceed to implement the agreed terms such as the transfer or sale of a property without any delay.

At Jordans, we offer a range of pricing options from hourly rates to fixed fee. However, the fee would depend on the value of your assets involved and the complexity of the agreement. We are able to discuss this further with you on our free initial telephone consultation.

Want to discuss further?

Contact our team of family law experts to arrange a free initial telephone consultation to discuss further.