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14.10.2016

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Your Divorce: Three financial settlement principles you need to know

Multimillionaire Richard Caring has reportedly left his wife of 45 years, in what could turn out to be Britain’s biggest divorce financial settlement to date. His wife, former model Jacqueline Stead, could be entitled to around half of his £700 million fortune. If they do get divorced and cannot agree on how they will split their finances, they could end up in a lengthy legal battle played out in front of a judge.

Even if you’re hoping to come to an agreement about your financial settlement outside of a court, it can be helpful to understand what judges use as a starting point when a divorcing couple end up inside their court room.

Although each case is looked at on an individual basis, with the interests of any children always being a top priority, there are three principles that courts use to help them make their decision about how your financial settlement will be split.

 

The sharing principle

The starting point for any court is that everything should be divided equally between the two spouses when dealing with a financial settlement . This includes any investments, savings or pensions, as well as the family home.

financial settlement divorce lawyer

It’s worth noting, however, that income is not looked at in this way. Also, if property is ‘brought in’ to the marriage by just one spouse, then it may be that the court will look at it as a ‘non-matrimonial’ asset and not use the sharing principle as a starting point. However, this is a complex area of law, so if you think it may apply to you, it’s a good idea to get legal advice as soon as possible.

 

The needs principle

If you and your spouse are both high net worth individuals, this principle may not be as important for you, because there is likely to be more than enough money to go round.

Under this principle, the courts will look at what you and your spouse need after you get divorced. This could include things such as where you’ll both live and how much money you’ll need. This may mean that, in reality, because of the needs of each spouse and their children, the fifty/fifty split starting point may not be viable in the end.

 

The compensation principle

This is the principle by which the courts take into account the fact that one spouse may have given up their career to support the other and look after any children. In doing this, they may have put themselves at a disadvantage when it comes to earning money in the future – therefore deserving some compensation. This could, for example, take the form of maintenance payments from their ex-spouse’s future earnings.

Children are always considered a top priority and their needs will always be looked at first and foremost by a court. These principles can provide a helpful starting point in negotiations with your spouse, even if you don’t end up in court.

 

Contact us to see how we can help you with your divorce financial settlement

For more information on your options call our team on 0845 862 5001 or email mail@austinkemp.co.uk.

We have client meeting office facilities available, in order to have face-to-face client meetings / conferences as and when required in London WC2N 4JF and Manchester M2 4PD. Please contact us for more details.

 

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