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There were 80,057 divorces in 2022, a massive 29.5% increase on the previous year. Going through a divorce is never easy for either party, but when assets and finances are involved, it becomes even more complex. That’s why it’s crucial for couples to reach a fair financial settlement to avoid future legal issues. Here are some key reasons why a fair financial settlement is so important in a divorce.
Splitting Assets and Debts
One of the most contentious parts of a divorce is deciding who gets what in terms of assets like the house, cars, investments, pensions, and valuables. Debts also need to be divided up equitably. This can get complicated if the assets are solely in one spouse’s name or the debts are joint. An unfair settlement could leave one spouse lacking financial stability. Working with a solicitor like https://www.paduffy-solicitors.com/family-law/divorce-financial-settlement-solicitors/ and using mediation to negotiate and compromise on an asset split is ideal.
Child Maintenance
14% of first-born children live through their parent’s divorce. If there are children involved, child maintenance must be agreed as part of the settlement. This involves regular payments from the non-resident parent to the parent who has custody to help cover the child’s living costs. The amount is based on factors like income and number of nights the child stays with each parent. A fair maintenance agreement will ensure the child’s needs are provided for.
Spousal Maintenance
In some cases, one spouse may pay maintenance to the other spouse, depending on factors like their age, income, future earning capacity, and years married. This provides financial support to enable them to maintain their lifestyle. Agreeing spousal maintenance fairly based on need ensures the receiving spouse can manage financially.
Financial Disclosure
A fair settlement relies on both spouses fully disclosing their financial situation including income, assets, pensions, debts etc. Concealing assets or lying about finances is fraudulent. With full transparency from both sides, an equitable settlement can be reached. Financial disclosure may require valuation of property and assets.
Clean Break Order
A clean break order severs financial ties between spouses so neither can make future claims on the other. This provides a fresh start. However, it may not be suitable if there is a big disparity in incomes and assets. In that case, ongoing maintenance payments might be required. A solicitor can provide guidance on whether a clean break is appropriate.
Avoiding Future Litigation
Reaching an amicable settlement means both spouses agree on the split of assets and finances. If one spouse feels aggrieved, they could pursue legal action in the future to contest the settlement, which is draining, expensive and disruptive. Agreeing a fair settlement from the outset minimises this risk.
Less Stress for the Family
A divorce settlement involving conflict over finances puts emotional strain on the spouses and impacts children. An amicable financial agreement means less stress for the family. Protecting children’s welfare should be the priority during divorce.
A fair financial settlement is a crucial part of divorce. Compromising and finding solutions that work for both spouses regarding asset split, maintenance, pensions and debts avoids future dispute and provides financial stability. This enables both parties to move forward.
