How to Navigate Divorce Financial Settlements | Howells Solicitors
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What is a Divorce Financial Settlement?

Howells Solicitors

03 Oct, 2023

Once you’ve taken the decision to divorce you will need to reach a formal financial divorce settlement. A financial settlement is legally binding and covers the specifics of how to deal with your assets following separation and will outline who will get what once you are legally separated.

In this article we will cover what a divorce settlement is, what financial assets are, how a divorce settlement is calculated, how to protect your assets and how to ensure you will get a fair divorce financial settlement.

What is a divorce financial settlement?

A divorce financial settlement is an agreement reached between divorcing spouses to divide their marital assets and debts. This determines how property, money, pensions and other assets will be divided between the parties. It also addresses issues such as spousal support and child support, also called maintenance, if applicable.

The purpose of a financial divorce settlement, also known as a financial order, is to provide a fair distribution of assets and ensure a financially stable future for both parties after the divorce. It is important to consult with a family law solicitor at the earliest possible stage to navigate the complexities of divorce proceedings and ensure that your rights and interests are protected.

What are financial assets?

Financial assets are what you and your spouse/civil partner have built up during your marriage/partnership. These are split into marital and non-marital assets.

Marital Assets

These can include assets such as:

– The family home

– Other properties

– Cash, savings and investments

– Pensions

– Vehicles

– Home contents

– Businesses

The court would also consider any debts, such as a mortgage, loans, credit cards and other commitments.

Non-matrimonial assets

These are financial assets (such as those listed above) which were acquired either before the marriage or after separation. They would therefore be treated differently to matrimonial assets but wouldn’t necessarily be excluded from a divorce settlement.

Do you need a financial settlement as part of a divorce in the UK?

Whilst you can still be granted a divorce without a financial settlement, it is highly advisable to obtain one. This will avoid any complications, delays or further legal costs. The court can approve any financial settlement from the decree nisi stage in the divorce. Without a divorce financial settlement, you can run the risk of not receiving what you are entitled to.

Your ex-partner could also try and make a financial claim against you in the future, even years after the divorce is finalised including a share of assets accrued in the years after the divorce has taken place.

It is important that a financial settlement is approved by a court. If it isn’t, it will not be legally binding and could leave you at risk of further disputes later.

How is a divorce settlement calculated?

Whilst the aim of the divorce court will be to divide assets in a fair and equal way, this does not always mean being split 50/50. Other factors such as the needs of each party, child arrangements and future earnings potential will all be involved in the decision.

Calculating a divorce settlement can vary depending on the individual’s circumstances. A divorce settlement is typically determined by considering several key factors:

1. Assets and Debts: The court will consider the value of marital assets (e.g., property, vehicles, investments) and debts accumulated during the marriage.

2. Income and Earning Potential: The court may assess each spouse’s income and earning potential to determine spousal support if applicable.

3. Child Custody / Child Maintenance: If there are children involved, their well-being is given priority. Factors such as child custody arrangements, visitation schedules, and child support obligations are considered. A family law solicitor can also help you with child custody matters.

4. Contributions to Marriage: The court may consider the contributions made by each spouse during the marriage, including financial contributions, homemaking responsibilities, and childcare.

5. Length of Marriage: The duration of the marriage can also influence how assets and debts are divided.

6. Needs: The financial needs of the parties and any children both now and in the long-term

It’s important to consult with a family law solicitor who specialises in divorce cases to understand how these factors apply to your specific situation since laws can differ from one case to another.

How to protect your assets and future assets

For most divorcing couples who own one, the family home is probably the biggest asset involved in any settlement. It can also be one of the biggest causes of stress and friction. There are several options in how this can be divided, from selling now or later, and splitting the equity, to buying out, transfer or other options. These options ought to be advised on by a Solicitor. When determining the division of assets in a financial settlement, it is crucial to prioritise the welfare of the children. The needs and welfare of the children are usually the first consideration in making decisions about the family home and other assets.

The best way to ensure that you are a receiving a fair settlement is to seek early legal advice. A family law solicitor can provide valuable guidance on navigating the complex process of property division and help you understand your rights and obligations.

They can also assist in negotiating a fair settlement that safeguards your assets. In high asset divorces, legal advice is especially important to ensure all assets are properly accounted for and divided, potentially saving time and money in the long run.

Read more here: Protecting Assets During Divorce

How do prenuptial agreements affect divorce/dissolution settlements?

If you and your partner signed a prenuptial agreement before you married/entered into a civil partnership, this should have detailed your financial circumstances and what would happen with your money and other assets if you were to seek a divorce/dissolution. The court is likely to uphold a prenuptial agreement so long as it complies with all of the relevant legal formalities.

How can you negotiate a fair divorce financial settlement?

This may depend on the relationship you have with your ex-spouse after your separation. Your first step will be to contact a family law solicitor who will discuss your options with you, but these will include a collaborative approach, mediation or your solicitor will negotiate a on your behalf.

Either or both of you can instruct a solicitor to write to the other party requesting their financial information and then with the benefit of legal advice suggest make proposals about a fair financial settlement.

If both parties agree

To do this, a solicitor can draft a ‘consent order’— a legal document that sets out what you and your partner have agreed to. It might also include arrangements for spousal maintenance and/or child maintenance.

If the consent order is considered fair, a judge will approve it, ordinarily without you having to go to court. If they deem it unfair, the Judge can raise queries or request a short hearing to explore the situation and check that everyone understands the terms of the agreement.

If you can’t agree

Sometimes unfortunately it is not possible for separated partners to agree what is fair on separation. If that is the case, then either individual can ask the court to decide. In that event you may have to attend several court hearings. Negotiating a settlement can be difficult, stressful, and emotionally challenging, not to mention the potential court costs involved. It is often possible with good legal advice to avoid the strain and expense of going to court. However, if an amicable resolution is not possible a family law solicitor will support you through any court appearances to ensure any financial settlement, including court costs, is fair and appropriate.

How Can a Solicitor Help?

family law solicitor can help make the divorce process smoother and help you get the outcome you deserve. And we can support you deal with any financial settlements and matters involving children.

You can email Howells to make an appointment at or call us:

Sheffield0114 249 66 66

Barnsley: 0122 680 51 90

Rotherham: 0170 936 40 00

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