Many people can forget that as well as being an emotional union of a couple, marriage is also a legally binding contract. That means that once a couple say “I do”, they are bound to each other under law as well as in the eyes of their family and friends.

 

It is important to remember this when considering dissolving a marriage to ensure you are fully aware of all the implications and issues that may need to be addressed.

When a couple get married, their assets are considered to be joint assets or liabilities. Once married, a partner can take on some responsibility for, or relinquish some control over, many things. These can include:
•Bank accounts
•Property
•Savings
•Pension funds
•Debts
•Inherited wealth

There are important steps you should take to protect your financial position as soon as it is clear that you are going to separate from your partner. Separating, or filing for divorce or dissolution of your civil partnership is a highly stressful time, but it is in your interest to try to agree urgent, short-term financial matters with your ex-partner. If you cannot agree or are worried your ex-partner may deal with the finances without telling you, think about what you can do to protect your position and take legal advice as soon as you can.

Home rights if you are married or in a civil partnership

Take immediatelly action as soon as you decide to separate.

Home rights if you are married or in a civil partnership

If the family home is owned in your ex-spouse or civil partner's sole name, you should look at registering without delay your interest at the Land Registry in England and Wales using a 'matrimonial home rights notice'.

If the property is not the family home you may be able to register a 'restriction' at the Land Registry. Both the home rights notice and the restriction will protect you as far as possible from your ex-partner trying to sell, transfer or mortgage the property without your knowledge or agreement.

Home rights if you are cohabiting

The position for cohabiting couples in England and Wales is that the non-owner can choose to make contributions towards the mortgage or the running of the home. However, this does not mean that the non-owner will be entitled to a financial share of the home, unless a legal agreement exists to say they will.

In addition, the owner will be able to:

  • evict the other person without getting a court order
  • rent out or sell the home without the other's agreement
  • take out a loan against the property without the other's consent.

Home rights in Scotland

In Scotland, it is not possible to register either a home rights notice or a restriction in the Land Registry. The Scotland Land Registry would only be of assistance in Scotland to determine who owns a property.

Both a 'non-entitled' spouse/civil partner and 'non-entitled' cohabitee (provided he or she has been living with his/her partner as 'husband and wife' or civil partners) have to apply to the court to have their occupancy rights declared. Once declared, those occupancy rights can remain in place for a renewable period of up to six months.

Contact your mortgage provider

Depending on your circumstances, you may need to speak to your lender to explain what has happened and discuss how you'll manage the mortgage repayments. Prior to doing this, it may be best to seek professional advice and come to an agreement with your ex-partner regarding

Contact your landlord if you rent

You may be able to arrange to continue the tenancy in your name alone or you may be able to transfer the tenancy to your ex-partner. However, it may be best to do this after you have taken professional advice and had discussions with your ex-partner about arrangements regarding where you are going to live and how the finances will be managed in the future.

Protecting other financial assets

Apply to the court for an injunction (interdict in Scotland) if necessary to stop your ex-partner from disposing of, transferring or selling assets or from moving assets abroad if this would prevent a fair settlement. This is a complex area of law, often needing urgent action without first informing your ex-partner. If you have concerns about what your ex-partner may be doing with their assets then seek professional advice as soon as you can.

Contact your bank, credit card and any other providers

If you have joint accounts or loans with your ex-partner, and especially if the breakup isn't amicable, you should contact your bank, credit card and other providers to explain what has happened. You can instruct them to stop your ex-partner running up any new debts or withdrawing funds.

Freezing the accounts will affect you both so make sure you think about this carefully. It will mean that you can't access the account either, so you will need to make agreements to make sure you have access to cash while things are being sorted out.

You'll also need to make agreements to ensure that any joint bills can still be paid, for example by Direct Debit or standing order.

Financial Settlements

When a relationship breaks down there are often financial matters which need to be discussed including what should happen to any property and what are you entitled to. When discussing the finances it is important to ensure that you have both disclosed your financial assets and circumstances to each other so that you know what assets are to be divided. This is important even if you have reached an agreement already as you will then be able to tell whether it is fair.

The type of information required is as follows:

  • copy pay slips for the past six months including your latest P60 for the last three tax returns.
  • copy bank statements and building society passbooks for the past 12 months in respect of each and every account held by you, whether in your sole name or jointly with any other person to including savings and investment accounts.
  • a complete schedule of your outgoings.
  • up to date transfer values of your pension policies (if any)
  • full details of all other income, assets, capital and investments held by you whether solely or jointly with any other person and documentary evidence in support for example, stocks, shares, share schemes or the like
  • an up to redemption statement and valuation for the home if you own it, and any other properties you own, either solely or with other people.

This list is just an example an is not exhaustive.

Once disclosure has taken place, and if you haven't reached an agreement, then we can try and negotiate an appropriate settlement for you. If you are a married couple or in a civil partnership then you are automatically entitled to make a financial claim against one another including claims against pension. When splitting assets there is a basic presumption that you start with a 50/50 split which increases or decreases in your favour depending on individual circumstances. There are a number of factors taken into account when determining what either party is entitled to.

They are as follows:

  • the income and capital needs of you both
  • the homing needs of any minor children
  • the standard of living of you both prior to the breakdown of the marriage/partnership
  • your ages and the duration of the marriage/partnership
  • any disabilities that either of you may have
  • contributions to the marriage/partnership including domestic contributions as well as financial contributions
  • potential financial loss as a result of the divorce/dissolution e.g. pension rights
  • behaviour, when it is unfair to ignore it

Once an agreement has been reached it is advisable to enter in to a Consent Order which records what has been agreed and is signed by a Judge to make it legally binding. If you cannot reach an agreement then a Court application can be made which will set out a timescale and encourage negotiation and settlement. If, on the rare occasion, you cannot reach a settlement then a Judge will make an Order as to what should happen with the finances.

If you are not married or in a civil partnership then different rules will apply

Pensions.

If you are married or in a civil partnership you are entitled to make a claim against your spouse or civil partner' Pension.

A lot will depend on your individual circumstances as to whether you would wish to claim against your spouse or civil partner's pension. You can also offset the value of a pension against other matrimonial assets, for example, the matrimonial home. For practical purposes this means that you may receive an increased share of the equity in the home or a lump sum payment rather than a pension share. There is no hard and fast rule when negotiating a settlement and a lot will depend on your individual circumstances.