FAMILY FINANCE – over 134 Questions answered on sorting out your family finance in Divorce

1.

What is Ancillary Relief?

This is the name given to the financial proceedings brought between spouses either during or after Divorce.

How do you start financial proceedings?

Your divorce/judicial separation proceedings must have started as the case number used for the financial proceedings is the same. You start with Form A and a Court fee of £240 plus Legal Costs.

3.

What are the alternatives to starting financial proceedings?

Mediation – www.mediation.org.ukCollabrative Law – www.SFLA.org.uk

4.

Why should my solicitor be a member of Resolution, previously known as the Solicitors Family Law Association?

They are usually experts in family law, they adhere to a non-confrontational approach which can save you money and will avoid unnecessary acrimonious letters toing and froing between the solicitors. saving you legal costs.

5.

When should I be dealing with the financial matters with my spouse?

This should be done immediately, as it will take time to deal with the practicalities. But you can only issue financial proceedings (as a final order can only be granted/sealed) after the decree Nisi.

6.

My wife and I want to wait to deal with the finances, we only want to separate now.

How about dealing with a separation agreement? This is an outline of your intention as to the finances, the divorce and the children. This can be helpful if you want to separate but do not want to go through the court proceedings now.

7.

We have agreed all the finances, do we still have to go to court?

If you both have agreed a sensible financial division, you should still both have independant legal advice, you should also disclose to each other your respective finances, and you can deal with a final agreement also called a consent order without going to court.

Helping you with the Form E –

At Garner & Hancock we help you complete the Form E so that you do not prejudice your case.

8.

What is the Form E?

This is the long form providing all our financial details including the needs of yourself and your children.You should also enclose a comprehensive needs schedule which your solicitor should provide to you. You can download the form E by Clicking Here

9.

Why am I asked to provide 12 months of statements.

This gives both parties and the court a chance to see if there have been any changes in your circumstances and for them to understand your life style.

10.

My spouse is hiding something, how can I discover what he/she has?

A good solicitor will be able to look at the Form E and see irregularities and signs like regular payments out or in (showing possible other undisclosed assets or income), life style which does not match income, missing documents etc. There is also a questionnaire which can be presented during the proceeding asking your spouse directly about suspicions you might have. But the Judge can scrutinise such questions to avoid onerous or nonsense questions.

11.

I don’t have all the information required by the Form E

Just say ‘to follow’ in the answer box for any information you are not yet aware of. Ideally you should also enclose a letter showing that you have requested this information.

12.

I don’t understand the pension form at page 14 of the Form E.

Do not worry, just send the form to the pension provider, and they will usually fill it in. If they are unable to help then the most important information is the CETV, the Cash Equivalent Transfer Value.  This is good starting point to value/compare pensions. But be very careful, the CETV can be misleading with regards to some pensions like final salary schemes or those in the police or civil service or in payment, and may be undervalued. Take advice from a pension specialist, the cost can be worthwhile.

13.

I am completing the schedule of expenses, can I put in Sky TV and Gym membership?

Yes, if these were things that you had whilst you were married.

14.

How much do I put for food, toiletries etc?

Look at your bank/credit card statement for 12 months and work out an average

15.

Can I claim savings and pension provision?

If you are a regular saver or have been putting money in a savings account then you can.

16.

Do I need to Count my children’s money in the Form E?

Definitely yes. This is counted as family money.

17.

I borrowed money from family to fund legal fees can I put these down?

Yes, but show this transparently, whom have you borrowed it from and what terms have you agreed to pay it back.

18.

I borrowed some money from my family when I bought the property can I claim this back to repay it?

Probably not, as this is regarded as a soft loan. Unless you have a written agreement or you have been paying it back regularly it may be ignored. Ideally you should have entered into a trust deed and recorded such payment. It could also be claimed by the person lending the money that they have an interest in the property. You should legal advice early on such a situation. Ideally at the time the money is lent.

19.

Why do I have to swear the Form E?

This is because if there is inaccurate information or information that is missing, these could pose problems later on with the following consequences.

1. It is a criminal offence to lie on a sworn document.

2. Any agreement that you enter into or ordered can be set aside (ie it can be cancelled) if later it is found that the financial information is incorrect or incomplete.

3. A costs order can be made against you.

4. You may be discredited in your evidence if this matter comes before the court.

20.

There is a question about bad behaviour of my spouse, can I write down all the things that my spouse has done to me?

No, this should be used with advice from your solicitor. Usually if your spouse has been dishonest about his finances or flitted the money away not without the best intentions of the family.

21.

My bank /credit card statements are changing day to day, what should I put in the figures?

This is a snapshot picture of your finances as at the date of swearing of your form E.

22.

Can I put estimates in the Form E?

You can rely on estimates, but you should seek to verify these figures as soon as possible. Recklessly completing the form E can be dangerous and the consequences have been outlined above.

23.

   Once the Form E has been completed, do I need to keep collecting and keeping financial information?

Yes, as you will be asked to update your form E at every hearing. You should also tell your solicitor if your financial circumstances change. You have an on going obligation to do so right through to the end of the case.

24.

House prices are changing, how can I protect myself in getting the best financial deal?

Recent case law is indicating that courts are much more aware of fluctuating house prices and it is important to get an accurate assessment of your property. If you believe that a simple appraisal from an estate agent does not take into account such things as damage in the property, subsidence, development opportunities or the property has a particular feature, then it may be advisable to get proper consideration from an expert in valuation rather than an appraisal from an estate agent.

26.

I am deciding to stop my overtime, how does this affect the financial division?

You should take care that if you stop for reasons related to the financial affairs of the divorce, then the courts may simply ignore that you have given up your overtime. This is called Potential Earning Capacity. It is expected you are working at your potential (see further questions below). If your employer has stopped overtime, then this will have an impact on maintenance. As long as the cut in overtime is not your fault then it will not adversely affect you.

27.

My spouse does not work or works part-time, I am sure he/she can work longer or start work?

Again, the question of Potential Earning Capacity needs to be looked at. Your solicitor may ask for his/her CV,  seek information from his/her employers as to promotion/increase in work hours. Your spouse has a positive duty to justify his/her position as to work.  However it does depend on things such as costs of child care, tax breaks, and practicality if your spouse should work/increase her work hours. Also, if your spouse is dividing their time between work and child care, then it may be unreasonable for the courts to consider their potential earning capacity to be higher on the basis that extra hours could be worked.

28.

My spouse has another partner, how does this affect the financial relief?

This may have the following effect:

1. This may reduce outgoings if they plan on living together or marrying.

2. This has no affect on the paying part of Child Support as this is based on Child Maintenance.

3. This information is required in the form which accompanies the Consent Order called the Statement of Information.

4. It will impact on the final financial agreement and will go towards showing your future needs.

29.

We have agreed all the finances and the divorce. Can we use one solicitor?

Solicitors cannot act if there is a potential conflict of interest. A solicitor could act but must cease to do so in the following circumstances:

1. if he/she believes that each has different interests or that one party is at a disadvantage,

2. If one persons needs requires more protection  than that of the other,

3. If one of  you asks a question that could prejudice the other.

Therefore, it is better to have separate solicitors so that each can ask the solicitor freely whether the agreement reached is a fair one.

30.

My spouse has stopped maintenance, what should I do?

1. Start proceedings called Maintenance Pending Suit, which deals with maintenance until the final order is dealt with.

2. Start full blown financial proceedings so that a decision of the overall finances is also made

3. Go to Mediation, or use collaborative law to assist in the negotiations.

31.

Can I buy a house whilst all my divorce and financial proceedings are going on?

Yes, there is nothing stopping you from doing this; it would not prejudice you in moving on with your life. You should be aware of the following.

1. Your purchase will be scrutinised that it meets your reasonable needs,

2.  You will need to show documents such as your mortgage application, and loans you applied for to show how much money you could raise, where you got the deposit from.

32.

Can my spouse acquire any interest in this property as a result of the financial relief proceedings?

Simple answer is that all the assets are included. You should speak to your solicitor as to any strategic reasons on such a decision.  Timing can be everything on such a purchase.

33.

Should I close all joint accounts?

You should make arrangements that outgoings are all met from either a single or joint account, otherwise your credit ratings may be affected to make it difficult to get future loans/mortgage.Joint accounts/whether current account of credit cards can cause problems if the other spouse is not responsible.  If you suspect he/she may take money not for the benefit of the family then such accounts should be closed and the bank informed of the impending divorce.

34.

Can I only pay half the mortgage as my spouse should be responsible?

 No, You discuss this with your spouse. You could both adversely affect your credit rating which in turn could have disastrous consequences on your ability to get another mortgage or credit. If you are struggling, check your benefits situation or make an application for financial support from your spouse by way of Periodical Payments Order.

35.

Whom should I inform when I am going through divorce proceedings?

1. The Benefits office as it may affect Tax credits – are you getting the correct money?

2. Child Benefit Office – payment to the correct parent.

3. Banks/buildings Societies – to avoid any difficulties with joint accounts.

4. Credit Card companies if in joint names.

5. Mortgage company if payment becomes irregular or from two accounts.

6. Employers, as you will need to take time off to see solicitors and attend hearing dates.

7. Accountant.

8. IFA (to find out your mortgagabilty).

36.

What further advice should I get when I am dealing with the financial aspects of the divorce?

1. Your accountant, about tax planning and raising money.

2. IFA, to find out about your mortgagabilty.

3. Pension provider or specialist.

4. Counselling to make the adjustment easier. Do not under estimate such advice; it makes the whole process so much less painful.

5. Advice from family and friends. But be careful to avoid relying on anecdotal advice “in my divorce I got…..”

37.

Am I allowed to take my spouses financial documents without he/she knowing?

If you do this, then this should be disclosed to your solicitor who will let the other side know. These document are known as Hillerdband documents.Be careful the following could be a criminal offence or could lead to civil penalties

1. You must not open the other spouses post.

2. You cannot bug the telephone.

3. Opening letters or correspondence from your spouse’s solicitors.

4. Showing private documents during the financial proceedings to others including the press.

 

GARNER  & HANCOCK LLP © 2012. (You may reproduce this only by asking us for permission to do so.)

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GARNER & HANCOCK LLP are a specialist family law solicitors specialising in Matimonial Financial issues.