top of page

Sharing financial information in divorce

Family mediation can be a way of reaching decisions about sharing your finances after separation. You and your ex-partner can discuss the issues that need to be resolved and with the help of the mediator you can decide how you are going to settle your finances such as the house, savings, pension. You can then make this proposal into a legally binding agreement.

Married Couples

For a financial settlement to be binding it is important that you both disclose to each other your respective financial positions. This would be the same whether your settlement was reached through mediation, through solicitors or through the court.

I sometimes meet clients who have made offers of financial settlement to a former partner which they think are very reasonable. It can be frustrating and stressful for them when they discover that a final legally binding order, where there has been a marriage or civil partnership, has to be preceded by full financial disclosure of both parties’ current situation. That applies even when the couple have been separated for months or years. That means that even if their former partner is happy to accept their offer, the process of disclosure cannot be circumvented.

The relevant protocol places on the parties an obligation to make full and frank disclosure of all material facts, documents and other information relevant to the issues. To obtain a court order the minimum of information required by the court is set out on a form D81 which is called “Statement of information for a consent order in relation to a financial remedy”. The form asks for details of each party and the children and covers a declaration of all current capital (all savings and property including jointly owned assets either with the other party or anyone else), all liabilities, cash valuations of all pensions, and current net monthly income. The date of the marriage or civil partnership, the details of the ages of the parties and any children together with details of any medical conditions, change of employment, any significant change in circumstances, and any prior agreement reached between the parties plus a declaration of any intentions to remarry or enter a civil partnership or to cohabit, are also requested. Failure to disclose would be very serious and would create potential for the order to be overturned.

This full and frank disclosure is legally necessary and makes sense; how can you come to an agreement if you don’t know what the assets and incomes are? Mediation is a cheaper and quicker way of completing this legally required full and frank disclosure.

In reaching a financial final settlement in mediation there would hopefully have been a two-stage process. The first stage is the disclosure of the current financial position and the second stage is the consideration of all the relevant circumstances.

In the Matrimonial Causes Act 1973 you can find at Section 25 a very helpful checklist of the factors that a court would consider before making a decision. This list includes such things as the welfare of the children, the length of the marriage and the contributions made both financially and in caring for the children. It also includes earning ability and financial needs of the parties and the children. I am frequently asked why the information about savings or debts accrued after separation is relevant. In reaching a financial settlement there is firstly the disclosure of the current financial position and then the consideration all the relevant circumstances. The discussion will include the fact that assets or debts were acquired after separation.

In mediation, following financial disclosure the parties are encouraged to raise these and any other issues that they think are relevant before looking at options to settle so that at the end of the process they can be assured that nothing important has been overlooked. Frequently clients have pensions into which contributions have been made either before the marriage or civil partnership or after the parties’ separation. The parties will consider whether it is fair to exclude those periods in reaching a final settlement. More information about the Section 25 factors is in the following guidance.

Cohabiting Couples

Whereas the divorce law gives the court a wide discretion to make a settlement that is fair and reasonable, for couples who live together, without marriage or civil partnership, the law in England and Wales is completely different.

The assets and liabilities are divided according to complex rules of property and trust laws. There is no protection of looking at things fairly even where there has been a long relationship.

In mediation, parties who do not have the benefit of falling back on the laws governing divorce must decide what information they are going to share with their former partner. Many will be prepared to fully disclose their positions and discuss a settlement based on fairness. However that does not appeal to everyone and it is important to seek independent legal advice. Further online guidance.

Open Financial Summary

The mediator, as part of the mediation process, will prepare a summary of your background, your family assets and income, which can be used as a foundation for your settlement proposals. This document is a factual document and it is known as an Open Financial Summary. If you seek legal advice you can show this to your solicitor and ask for a realistic assessment of the likely range of possibilities at court. In mediation you can focus on realistic, affordable and practical options so that you can reach an acceptable outcome.

If you are currently going through a divorce or looking to sort out your finances after separation family mediation could be very helpful. Please visit this page for more information about the process or call us on 01670 528441.

Follow Us
  • Facebook Basic Square
  • Twitter Basic Square
  • Google+ Basic Square
bottom of page