Starting the process of separation or ending a marriage is not only an emotional experience, but a call to wade through legal terms and financial terminology. For many, this language can seem like a foreign dialect, obscuring the already challenging path to resolving family financial matters.
This blog aims to decode some of the most common legal jargon, empowering you with the knowledge to navigate your financial settlement confidently.
1. Financial Settlement
A financial settlement refers to the agreement reached between divorcing or separating parties concerning the division of their assets, debts, and other financial responsibilities. This comprehensive arrangement covers everything from property and savings to pensions and maintenance payments, ensuring a fair distribution that considers the future needs of both parties.
2. Consent Order
A consent order is a legal document that makes your financial settlement legally binding. Drafted after mutual agreement is reached, it is reviewed and approved by a court, providing a safeguard against future disputes over finances. It's the crucial step that turns your negotiations into enforceable agreements.
3. Clean Break
A clean break is a principle in divorce law that severs all financial ties between the divorcing parties, allowing them to become financially independent from each other. A clean break settlement might include lump-sum payments but would not include ongoing spousal maintenance, as the goal is to achieve a final settlement of financial matters.
A clean break only applies to the divorcing parties and does not stop a parent’s legal obligation to pay maintenance for their children.
4. Matrimonial Assets
Matrimonial assets are properties and resources acquired by the couple during their marriage. These include the family home, savings accounts, investments, and pensions. Understanding which assets are considered matrimonial is key to negotiating a fair division.
5. Non-Matrimonial Assets
On the other hand, non-matrimonial assets refer to properties and financial resources owned by either spouse before the marriage or acquired independently (e.g., through inheritance) during the marriage.
Non-matrimonial assets can become matrimonial during the course of the marriage - for example, if they are used for the benefit of the family. If the assets acquired during the marriage are not enough to meet the needs of both parties, then the assets owned before the marriage can be divided between them.
If not divided, they will be considered in the overall settlement to ensure fairness.
6. Pension Sharing
Pension sharing is a way to divide pension assets between spouses after a divorce. It provides a clean break in pension arrangements, as it allocates a percentage of one party’s pension pot to the other, establishing a separate pension arrangement for the receiving spouse.
7. Periodical Payments
Periodical payments - often referred to as spousal maintenance - are regular, ongoing payments made by one spouse to the other post-divorce. These payments are intended to support the recipient's living expenses when they cannot meet their needs independently.
8. Child Maintenance
Child maintenance is an arrangement where financial support is provided by the non-residential parent to the parent who has the day-to-day care of the children. The amount is typically calculated based on the payer's income, the number of children they are supporting and how many nights the children spend in their care.
9. Financial Remedy Proceedings
Financial remedy proceedings (formerly referred to as ancillary relief) is a legal procedure where divorcing couples can resolve disputes over financial arrangements, as well as the division of assets, through the court. It encompasses applications for maintenance, lump sum orders, and the division of property and pensions.
10. Mediation
Mediation is a voluntary process where an independent third party (the mediator) helps divorcing or separating couples reach an agreement on various issues, including financial settlements. It's a less adversarial approach than court proceedings and can lead to more amicable resolutions.
11. Collaborative Law
Collaborative law is a legal process that, like mediation, encourages couples to work together to resolve their divorce or separation issues - including financial settlements - without going to court. Each party has their solicitor, and all parties commit to resolving matters cooperatively.
Navigating the financial aspects of a separation or divorce can feel daunting, especially when faced with the myriad of terms and concepts used in family law.
However, understanding these key terms enlightens the process, enabling you to approach your financial settlement with clarity and confidence.
Next Steps: Get Expert Help
• Consult a Family Lawyer. Professional advice is invaluable. Book a chat with a family lawyer to discuss your situation.
• Financial Planning. Start planning for your post-divorce financial future. Consult an independent financial adviser.
• Support Systems. Divorce can be emotionally taxing. Support from professionals, friends, and family is crucial during this time
Learn More About Navigating Family Financial Matters Here...
