Counting the cost of fighting over finances in divorce
Arguing about money could spell disaster for your marriage, according to a recent tabloid headline.
Based on an American academic survey the newspaper story claims that rowing about finance is more of a predictor of divorce than arguments about children, in laws and sex.
Behind the headlines is a serious message about the importance of couples discussing their finances openly and honestly. When a husband and wife have not shared their individual finances with each other within their marriage this can often contribute to problems during divorce proceedings. One party may have no idea where the budget line is – or even where it should be drawn – and may have unrealistic expectations of what they are entitled to, or what is a realistic and affordable financial settlement.
During their marriage a couple may have hidden finances from the other or argued endlessly about money. However, when it comes to the divorce process there is no avoiding a full and frank disclosure of each partner’s finances. Neither party can put his or her head in the sand, nor should they believe that they can squirrel away assets.
Financial disclosures are designed to protect both parties and to ensure that each receives a fair settlement. Below are some the key elements of this critical aspect of any divorce.
- Essential paperwork you must complete You will be asked to complete what is known as a ‘Form E’ and provide evidence of your assets and finances in the UK and abroad including bank statements, business accounts, tax returns, mortgage statements, valuations of any assets, such as pensions, property together with evidence of any financial liabilities.
- How Form E is used Lawyers will collate this documentation then exchange it with your husband or wife’s lawyer as part of the divorce negotiations. If you fail to submit the relevant documentation, or your ex or his or her solicitor suspects that vital paperwork is missing, then a lawyer may believe that you have not made a ‘full and frank disclosure’ and can apply to the courts for a judge to deal with the financial matters. You could be fined or even imprisoned – almost certainly you will face additional costs, particularly if lawyers have to pay for specialist help to track down your missing finances. Equally import will be the damage to negotiations. There will be suspicion and uncertainty which may well prevent a negotiated settlement and consequently create delay and additional costs.
- Concealing assets Lawyers and judges know every trick in the book and will ask questions if they suspect that money has been concealed and may even employ forensic accountants to track down missing assets. Don’t be tempted to hide money in offshore banks because you will be found out and family courts have the power to question your accountant, your financial advisor and even your bank manager. Nor should you set up a new business shortly before separation as a suspicious lawyer or judge could see this is a deliberate attempt to hide assets within a company structure.
- Take a non-confrontational approach At Jones Myers we believe that wherever possible negotiation is key to resolving critical, yet often challenging, financial settlements. This approach, which sees a couple and their lawyers working together discussing the issues and debating different solutions to meet the needs of both parties, can avoid the trauma of court and reduce pressure and anxieties.
- Play fair for a lasting solution. If you cheat with your finances and assets and you are found out then a court can overturn the original settlement. However, if you play fair and are transparent then you and your ex can avoid further emotional upheaval and costs with both of you able to move on in your lives.
If you have any questions or concerns about the financial aspects of divorce, or any issues relating to the breakdown of a marriage or civil partnership, then do email us or give us a call on 0113 246 0055.