42% of marriages end in divorce, but you never imagine that you might be one of them. Getting divorced is such a difficult process, both emotionally and physically. There’s the actual physical separation, perhaps moving out of your shared home and into your own place. There is sorting out custody of children or pets, if you have any. Then, of course, there are financial settlements to be made.
While divorce can be devastating and overwhelming – money is probably the last thing you want to think about – sorting out your finances will help you to come to terms with the divorce and alleviate stress.
Here’s how to sort your finances during or after a divorce:
Did You Sign A Prenup?
The first thing to think about is the prenuptial agreement. Many couples sign a prenup in order to avoid messy divorce proceedings if the situation arises. This is a good idea for any new couple wanting to get married; it simplifies your separation if the day does come that you decide to split up.
If you didn’t sign a prenup, this means that your assets are shared and will need to be divided between you either following the advice of lawyers or your own division of assets.
Discussing The Settlement With Your Lawyer
If you are going through a divorce right now, you probably already have a lawyer. Being concerned about your financial separation from your spouse is understandable – it could leave you much worse off than you were before if you relied on your spouse’s income – so discussing your worries and your requests with your lawyer is a good idea.
A Woman’s Guide to Divorce: How to take control of the whole process, including finances, children and the emotional journey.
Here are some aspects you should speak to your lawyer about when discussing a financial divorce settlement:
Financial Settlement
The aim is to reach a fair distribution of assets, income and pensions. In the UK, there isn’t a standard split like 50/50; the courts consider various factors like earning capacity, the welfare of any children, and the standard of living enjoyed during the marriage, among other things.
Often overlooked, pensions can be a significant part of the matrimonial assets, especially in long marriages. There are various ways in which pension assets can be divided, such as pension sharing, pension offsetting, or pension earmarking.
Debt division
If you and your spouse are in debt, this will come up in any divorce settlement. You need to know how your debt will be divided between you.
Spousal maintenance
Spousal maintenance is a monthly maintenance fee paid from a higher-earning spouse to a lower-income spouse after a divorce. This is a complicated area that depends on many factors, so ask your divorce lawyer about the details of spousal maintenance.
Property division
A huge chunk of your financial viability will be tied up in your assets. This is an essential conversation to have with your lawyer, to determine how you can split your assets with your spouse in a way that benefits you both.
Change Your Will
You should also change your will if you have one. Under UK law, divorce can significantly affect the validity of your will.
An Amicable Settlement
Of course, the ideal situation in a divorce is to settle amicably. This means you will not even need to enter a courtroom throughout the entire process; you can split your money and assets between you by deciding face-to-face how things will be separated. This is unfortunately a rare occurrence, but one that will save you thousands in legal fees and overall prevent a highly stressful court appearance.
Divorce proceedings can get ugly if spouses disagree on how much they owe to one another. Although it is easy to disagree on such things, it is important to remember to uphold the respect you have for each other throughout a divorce.
