Reaching an agreement on all the financial aspects in divorce proceedings is usually an essential, and sometimes very complex, process. Most couples accumulate property, savings, pensions and sometimes debts during the course of the marriage or civil partnership and, once it has broken down, agreement needs to be reached as to what will happen to each of these. Usually everything will go “into the pot” and looked at overall in order to achieve a fair and reasonable outcome for both parties.
Where do I start?
It is important to get a clear picture of both parties’ financial circumstances. The starting point is to complete a document called a Form E. This may be done on a voluntary basis or directed by the court if financial proceedings have been issued. It is a very long document which can appear very daunting, however it is intended to cover every financial possibility and parts of the form may not be relevant to you.
What do I need to include?
The initial parts of the form requests information about yourself and any children of the family including your living arrangements, health and your children’s education.
The second section is about the family home. If the home is owned, you will need to provide a valuation for this and an up to date mortgage redemption figure so that the equity can be calculated. If you have a second property you should do the same for this.
You are required to provide details of all your bank and savings accounts and 12 months’ statements for each account. If you have any other investments, e.g. premium bonds and shares, you need to provide evidence of their current value. If you have any liabilities, e.g. car loans or credit card debts, you should obtain statements showing the balances currently outstanding.
If you have any pensions, whether occupational or private, you will need to request a Cash Equivalent Transfer Value (CETV) from each provider. This is not the same as your annual statement. This applies even if your pension is in payment. These can take some time to obtain, so usually it is a good idea to ask each of your pension companies for them as soon as possible.
If you are working you are asked to provide details of your employment, your 3 most recent payslips and latest P60. If you are self-employed you should provide your last tax return and company accounts.
There are sections regarding any other assets over £500 (usually a car, technology or jewellery), debts due to you, life insurance policies, business assets, any other income (including benefits) and tax liabilities but some of these sections may not apply to you.
In the income needs section you should include all the current expenses for yourself (both for the home and personal) and any children of the family, and your anticipated future expenses. Again, not all of the items on the list will apply.
We will arrange for you to go through the last parts of the form with your solicitor who can advise you what to include as it asks for your capital needs, other relevant details relating to your marriage or civil partnership which may affect the financial provision required and what you are seeking in terms of a settlement.
It is important to provide full disclosure of all your finances as you are required to sign a Statement of Truth declaring that you have done so. Failure to do so can have serious consequences.
What happens next?
If the court have ordered that the Form E be completed, they will provide a timetable for when this should be filed at court and exchanged with the other party. If the parties agreed to carry out the process on a voluntary basis, then a date will be set to exchange the forms (usually around 4 weeks later), although this can be delayed if either party has been unable to complete the form or are still waiting on supporting documentation.
The documentation is then exchanged simultaneously, usually by email, so that both parties have a full picture of all the finances and negotiations can commence to reach a fair and reasonable settlement.
How we can help
We realise this task can be complicated, stressful, time consuming and maybe overwhelming so we will work with you to complete the form and collate all the supporting documentation. Providing a properly completed Form E with full supporting documentation should reduce the time and additional cost of the other party having to request further information or additional documentation after exchange, delaying the time for starting negotiations.
Once a financial settlement has been achieved, we can assist with the preparation of a consent order detailing the agreement.
If you would like further information or require assistance with resolving your finances, please contact our family paralegal Alison Cole on 01293 596947 who would be happy to help.