What is a financial settlement?
The term ‘financial settlement’ refers to the set of agreements you make with your former spouse regarding the division of jointly owned assets (for example, property) and any related financial arrangements (for example, child support).
This process requires a full disclosure of financial assets, which is made by completing a standard document called a Form E. With a full and accurate picture of the couple’s assets, fair division can be made, one that reflects the couple’s unique circumstances and living arrangements.
Keeping your assets or money separate
But sometimes divorcing couples simply don’t have joint assets to divide. Perhaps they have only been married a short time, had low-paying employment or they simply made it a point of principal to keep their finances entirely separate during the marriage. Typically, if the relationship then breaks down, lawyers will recommend that such couples seek a ‘clean break’ consent order. This will permanently sever all financial links between them, so no future financial claims can be made by either party if circumstances change.
In those circumstance, financial disclosure is still required. The family courts will not endorse a consent order unless they are confident it is fair and they will not be able to make such an assessment unless they know each party’s:
- Monthly income
- Pension valuations
- Investments and accumulated savings
- Interests in property
Normally supportive documentation – for example, bank statements – will not be required when applying for a clean break, but both parties are under a legal obligation to be truthful. If any evidence of information withheld later comes to light, the consent order will be set aside and the spouse in question could be at risk of prosecution.