Yours or mine?
With the news that Cheryl Fernandez-Versini has filed for divorce comes the speculation about how the split could dent her multi-million pound fortune.
As there is allegedly no pre-nuptial agreement in place, the path to separation may be a rocky one for the singer as she could be forced to part with a significant chunk of her wealth.
But it’s not just the rich and famous who are likely to worry about their finances when going through a divorce.
A recent survey commissioned by Devonshires Solicitors polled 1,000 divorced and married people and revealed that 74% of Brits had, or would have, financial concerns when thinking about divorce. This is a trend that can be seen across the board, whether people earn £15,000 or £55,000.
Dividing assets topped the list of financial worries, with almost half of respondents saying that this was the biggest concern, regardless of their income. The majority of clients that I have worked with share the same view, particularly with regard to the former family home.
When determining the financial arrangements of a divorcing couple, the starting point for a Court will be a 50/50 division of the matrimonial assets, although a Court will also consider a number of additional factors, including their ages, earning capacities and contributions to the family.
If, however, any of the couple’s assets were acquired by one party before the marriage or as a result of an inheritance, these will be treated differently by the Court.
In terms of the former family home, the Court’s priority in any separation will be to provide both people (and any children) with a roof over their head.
But difficulties often arise if there are insufficient assets to preserve the lifestyle both parties had become accustomed to. In all cases, the Court will prioritise the welfare of any children. If the children live with one parent for the vast majority of the time, that parent’s housing needs may be deemed greater than the other parent’s.
However, there are numerous ways to protect the other parent’s interest if it is tied-up in a home for the children, for example, a charge against the home which is repayable upon the youngest child turning 18 years old.
Furthermore, many individuals are emotionally attached to the former family home, which can lead to further disputes in relation to selling it.
I often encounter clients who are keen to off-set claims they have against other assets, such as pensions or ongoing maintenance in order to retain the family home. However, before taking these steps, it is essential to get both legal and financial advice to ensure that your long-term financial position is secure.
Pensions or ongoing spousal maintenance provide an element of security in this respect, but some individuals still choose to retain the family home and downsize at a later stage to release capital. Each case will vary and such a decision is likely to be a finely-tuned balancing act.
Our survey also revealed that child maintenance was a source of worry when divorcing, with one in four stating that this was their main concern.
However – in my experience – disputes surrounding child maintenance are on the decline. This is mainly because the Child Maintenance Service, which replaced the Child Support Agency in 2013, has introduced a new calculation which is clearer and simpler to use.
That said, all parents should familiarise themselves with the finer details of the child maintenance calculation, including the number of nights the children spend with each parent and any other children that live with the paying parent. Parents who earn a gross weekly income in excess of £3,000 (after pension contributions) should always seek specialist advice from a solicitor.
Divorce is rarely easy and financial concerns are natural for any couple going through the process, so it is important to seek legal advice at an early stage to ensure that both parties are fully informed of the options available to them.
Eileen Macqueen heads the family law team at Devonshires Solicitors, one of the UK’s leading full service law firms.
Based at the firm’s office in Finsbury Circus, London, Eileen has qualified as a solicitor-advocate (with Higher Rights of Audience) and can therefore undertake advocacy on behalf of her clients.
She is also a member of Resolution, an organisation of 6,500 family lawyers and other professionals in England and Wales who believe in a constructive, non-confrontational approach to family law matters.