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Divorce: financial advice

The process of getting a divorce is completely distinct to the process of making financial or child arrangements. A decree absolute will bring your marriage to an end, but it may not end the financial commitments that may continue to exist between you and your ex-spouse on divorce depending on your circumstances. Financial matters following a divorce are instead dealt with by way of a financial settlement, which can be determined in a number of ways, and for which you are strongly recommended to take financial divorce advice to ensure you get the best outcome in your situation.

This financial process does not need to be undertaken formally through the courts, and a couple may choose to settle more informally via an out of court process. This will depend on the circumstances of the divorce and you should obtain legal advice on the best approach. If there is a prenuptial agreement then this can also determine whether or not court involvement is necessary.

Financial settlement outside of the courts

The couple can agree how their assets will be divided in order to determine their financial settlement. Their financial agreement can be formalised by the courts as a consent order, which makes it legally binding. Again it is recommended that you take financial divorce advice to ensure that you are properly protected. Formalising the financial agreement determined between the parties provides financial security to each spouse following divorce as a court cannot enforce an agreement that has not been made legally binding. This advice applies irrespective of whether current relations are amicable or not.

Although the courts are involved in formalising the financial arrangement, it does not mean that this will be costly or result in protracted proceedings, as can sometimes be the case on divorce. It is still recommended that you obtain specialist financial divorce advice given the complex nature of such matters.

Financial settlement involving the courts

It might not be possible for the parties to agree outside of court, especially in an acrimonious divorce or where the financial situation is complicated. In these instances, it will be necessary for the courts to determine a financial settlement for the parties – a process that involves several stages. These can be complex arrangements and so you must get expert financial advice for your divorce to ensure the best outcome in your case.

Financial disclosure

Form A

This is an application to the court that starts the court-led process for financial remedy. The court, on receipt of Form A, will set an initial hearing and a timetable for disclosure for the case to progress. Your legal advisor can give you financial divorce advice and guidance on completing this form.

Form E

This document requires each party to set out their assets, income and financial needs. These are then exchanged between the parties and examined, after which further questions can be asked to the other side to progress the settlement discussion and resolve any queries. Again your lawyer can give you specialist financial advice on your divorce to help you complete this form.

Court hearings

First Directions Appointment (FDA)

This is the first hearing in relation to the financial aspects of a divorce, where the court issues steps that must be followed by the parties to establish the extent and value of assets involved.

Financial Dispute Resolution (FDR)

Prior to the FDR hearing, each party must make a proposal to their spouse, often prepared with legal advice. The judge, having looked at these proposals, will give an indication as to what they believe the final settlement will be. Most cases settle here, but, if not, they progress to a final hearing. Your lawyer can provide you with financial advice on your divorce in relation to what will happen at this hearing.

Final hearing

At a final hearing, the court listens to the evidence of both parties and decides what the assets are and how they should be divided. At the end of the hearing, the judge will make a judgment and set out a financial order transferring assets between the parties.

How will a judge decide the splitting of assets on divorce?

Separating parties will often wonder when getting divorced, who gets what. Where the courts are involved, the splitting of assets on divorce is solely within the discretion of the judge, whose ultimate role is to make a settlement that is fair to both parties. This does not necessarily mean a 50:50 division of the assets on divorce, though this is the starting point taken by the courts.

It is important to understand how the courts will approach this and so you should get advice from your lawyer. A judge will make their decision based on several factors, including:

• The individuals income and earning capacity, both at present and in future, alongside other personal factors including age, disability and contributions made to the marriage

• Needs of any children

• Standard of living prior to divorce

• Length of the marriage


Splitting assets on divorce is more difficult when those assets are complex, for example where a business is involved. The valuation of a business on divorce depends on a purely theoretical measure of how much the business could be sold for. In these cases, a court may order for the asset to be valued by an independent expert.

Income and pensions

The court considers salary on a needs basis, which means a party may only have a claim to a share of their former spouses income after a divorce if they are unable to meet their own needs. This is known as spousal maintenance and is often ordered where there exists a primary carer in the marriage, who has reduced prospects of employment/earning capacity on divorce.

Pensions, on the other hand, present a unique asset with a more nuanced approach. This is a compli-cated area of divorce law and it is important to get specialist advice to ensure the best outcome.

Clean break orders

A clean break order is used by a couple wishing to have a fresh start after the divorce is finalised. This is because, once implemented, there are no financial commitments (other than child maintenance if relevant) which continue to exist between the parties following divorce. For this reason, there exists a duty for the court to consider the possibility of a clean break on divorce in every case. Your lawyer can give you financial advice on your divorce in relation to whether this is appropriate in your circumstances.

Other financial matters you will need to consider in your divorce

Divorce and debt

It is not only assets that need to be divided on divorce, but matrimonial debts too. This remains the case even where existing debts are only in one name. Further information on how debts are dealt with on divorce can be found here.

Divorce and tax

There also exist tax implications on divorce, including:

  • Capital gains tax
  • Inheritance tax
  • Income tax

Getting advice

If you are facing divorce you may wish to protect your assets or you may be concerned about getting your fair share. As a top family law firm, Vardags specialist lawyers can give you expert financial advice on your divorce to help you get the best possible result from your financial proceedings.

The information on this website is intended as a guide and does not constitute legal advice. Vardags do not accept liability for any errors in the information on this website, nor any losses stemming from reliance upon the statements made herein. All articles and pages aim to reflect the legal position at time they were published, and may have been rendered obsolete by subsequent developments in the law. Should you require specialist advice, tailored to your situation, please see how Vardags can help you.

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