The division of matrimonial assets is an important aspect for consideration when going through a divorce. Unless settlement terms can be agreed and recorded in a Consent Order (which is then approved by the Court) both parties continue to have a claim against the other subject to whether either party is cohabiting or intending to remarry.
It is therefore important to address the division of the matrimonial assets as soon as possible once divorce proceedings have been issued (and before the Decree Absolute is granted). There are 2 options available:-
(1) Agreeing settlement terms by consent or
(2) Issue an Application for ancillary relief.
AGREEING SETTLEMENT TERMS
Before advising on possible settlement terms both parties must make voluntary disclosure of all their assets. Once this has taken place we will be able to advise you on a realistic division of the matrimonial assets and can liaise with your ex-spouse or their solicitor on a without prejudice basis to attempt to agree settlement terms. This means that even if negotiations breakdown the Court will not be aware of the details of the negotiations until after a final Order is made by the Court.
If the parties are able to reach settlement terms then the terms will be recorded in a Consent Order and lodged with the Court to be approved by the Judge. As no formal disclosure process will have taken place both parties must also file with the Court a Statement of Information which gives a ‘snap shot’ of the assets to ensure that the terms reached are fair to both parties.
APPLICATION FOR ANCILLARY RELIEF
If the division of the matrimonial assets cannot be agreed an application will need to be made to the Court for ancillary relief seeking one or more of the following orders for yourself:-
- Lump sum order
- Property adjustment order
- Periodical payments order
- Order for maintenance pending suit
- Secured provision order
- Pension sharing/attachment order
The following orders can also be obtained for the children:-
- Periodical payment order
- Secured provision order
- Lump sum order
- Property adjustment order
A Court fee for the Application is payable.
Once the Application has been issued the Court will list a hearing for the First Appointment. The Court will also provide directions as to the mutual exchange of Financial Statements (Form E’S) and other documents required by the Court before the First Appointment.
Financial Statement (“Form E”)
The Form E is a lengthy form which must be completed by both parties. The following is some of the information which will need to be disclosed on the Form E:-
- All properties which are jointly (with the spouse or third party) or solely owned or which either party has a beneficial interest;
- All bank accounts including copies of bank statements for the previous 12 months for all accounts;
- All shares, ISA and other investments;
- Employment and salary details including your previous 3 wage slips and P60;
- Details of any sole trader business including Tax Returns for the previous 2 years;
- Directorships currently held or held in the previous 12 months;
- Details and value of any shareholding;
- State benefits;
- Cash held over £500 (or equivalent in any other currency);
- Personal property with a value of over £500;
- Full details of all liabilities (including credit cards, bank loans, hire purchase agreements).
Before the hearing both parties must exchange the following documents:-
- Financial Statements and supporting documents;
- Chronology of events;
- Statement of Issues (a list of issues the Court is being asked to deal with);
- Questionnaire (a request for additional information/documents following the information disclosed in the Form E);
- Estimate of Costs.
First Appointment (“FDA”)
The FDA can be used by the parties to negotiate and attempt to agree settlement terms. However it is often the case that additional documents/disclosure is required from one or both parties. Accordingly the Court will usually make directions in relation to further disclosure to be provided and obtaining valuations of the former matrimonial home and any other property/business. The Court will also re-list the matter for a Financial Dispute Resolution (known as an FDR) hearing which will usually take place 2-4 months after the FDA.
Final Dispute Resolution (“FDR”)
The FDR hearing is to enable the parties to attempt to reach settlement terms after full disclosure has taken place. The parties and their legal representatives must attend Court at least 1 hour before the hearing for negotiations. If agreement cannot be reached the parties will attend the hearing before a Judge who will, on a brief consideration of the papers, give an indication as to his/her view of the likely division of the assets if the matter were to proceed to trial. This is to assist the parties in
continuing negotiations. If no agreement is reached then the Judge will make any further directions required and list the matter for trial. The FDR is a hearing conducted ‘without prejudice’ so both parties can “put their cards on the table” to try and reach settlement terms. If settlement terms are not reached the Judge that conducted the FDR cannot be the trial Judge.
If settlement terms are reached during negotiations at the FDR then the terms will be recorded in a Consent Order and approved by the Judge. This will bring a conclusion to the ancillary relief proceedings save for completion of any direction in the Order which must be complied with (i.e. the closure of an account, sale of a property)
It is unusual for ancillary relief matters to proceed to trial unless there are complex financial circumstances. However in the event that settlement terms cannot be reached at the FDR the Court will make further directions for both parties to provide updating disclosure and for the mutual exchange of s.25 statements which is a statement setting out each parties’ position.
At trial the Court determines the division of the parties assets bearing in mind the factors set out in S25 Matrimonial Cause Act as follows:-
(a)Resources (including income, earning capacity and property);
(b)Needs (including the accommodation required by either party and caring for children);
(c)Standard of living enjoyed by the parties during the marriage;
(d)Age of the parties and duration of the marriage;
(e)Disability of either party;
(f)Contribution of either party to the marriage (by way of building a business, generating income or as a homemaker);
(g)Conduct of either party.
Not all of the above factors will be relevant to each and every case. The factors that are particularly relevant will be borne in mind in advising you generally in relation to the proceedings and during negotiations.
At trial both parties (and any other witnesses) will need to attend trial to be cross examined.
At the conclusion of the trial the Judge will give his/her Judgment and decision on the division of the matrimonial assets.
Please note the information provided in this article is only intended to be an overview for general guidance. Further information and more detailed and case specific advice can be provided on all aspects on request.