Dividing assets on divorce – when is the right time?
By Anna Sutcliffe, Senior Family Law Executive, York Office
Making decisions when you are in the midst of life changing events isn’t easy – especially when there is so much other upheaval going on with the current pandemic.
Physically separating is one thing – but when is the best time to divide your assets?
Questions around your financial settlement are not over until you have the security of a final order from the Court. This Order sets out what your obligations are, what you will keep and, in most cases, will put an end to any claims you might have against each other.
But what happens if your assets increase or decrease in value after you have separated but while you are still in the middle of attempting to reach a settlement? Any decisions on “who gets what” will not be based on the value of assets at the time of the separation but on the current value.
A critical question is how the uncertainty over school closures and the impact on the wider economy will affect couples’ thinking about how they divide their finances. One possibility is to agree a two part division, so that liquid assets such as savings are dealt with at the time of settlement but illiquid assets such as property and pensions are dealt with at a later date when the market is more stable.
Whilst many couples may conclude there are too many unknown factors to consider making significant life-changing decisions now; others may take the view that the economic uncertainty gives them a backdrop against which to separate. This is because financial awards might be lower than they would otherwise be in “normal” economic times.
It is important to bear in mind however that, even if you were to take the decision today, any financial settlement may not be based on the value of the assets as they currently stand, in particular if a lengthy court process is involved.
If there are fully contested financial proceedings, it is likely to take around 9-12 months to get to a final hearing. Although we have no idea of knowing what the economic landscape may look like then, it will almost certainly be different from today.
Bearing this in mind couples are advised to consider alternative dispute resolutions as these are likely to conclude much more quickly. Mediation and Collaborative Law are both excellent ways to achieve an agreed financial settlement which is right for you. Arbitration, a private court designed to resolve financial issues between separating couples, has also taken off in the UK.
We look at how these processes work in part 2 of the blog.
For queries on divorce, finances or any aspect of family law, call our experienced family lawyers at Leeds on 0113 246 0055, Harrogate on 01423 276104, or York on 01904 202550. All calls are redirected to our staff working remotely. Visit www.jonesmyers.co.uk, email firstname.lastname@example.org or tweet us @helpwithdivorce