Divorcing couples are often scarred by disputes over financial matters. Such wrangling can add time and cost to the proceedings, says David Anstee, head of KWW’s Family Law team.
Resolving financial matters by consent is a far less stressful way to go, if it’s possible, and couples can get a formal Order in place quicker than would be the case if either of them applied to Court. They would also not have to attend Court if an agreement can be reached.
Although you must obtain a Court Order to formally record a financial agreement, this does not mean there have to be formal Court proceedings.
If you and your spouse can agree the terms of the financial settlement, that agreement can be set out in a Financial Remedy Order, also known as a Consent Order.
If it is not possible to reach an agreement by consent, Court proceedings may be issued.
The first stage in coming to an agreement is to provide voluntary financial disclosure by way of a financial statement known as a Form E. At first glance, the form can appear daunting, but not all sections will be relevant to everyone.
Along with your Form E you must enclose copies of the following documents (if applicable):
- Any written valuation of the matrimonial home which you have obtained in the past six months. If you have more than one property, you will have to include a valuation for this/these too
- Your most recent mortgage statement(s), if applicable
- Statements of account for all bank, building society, National Savings accounts, ISAs etc. which are in credit, in which you hold or have held an interest for the past 12 months
- Copies of shares certificates and other investment documents showing the extent and value of those assets
- Any surrender value quotation you have obtained regarding any life policies
- If you own a business, the last two years’ accounts, business bank statements and any other document on which you base your valuation of your interest in the business
- If you have them, a valuation for all of your pension schemes, including your state pension (this can be obtained via DWP website).
- If you are employed, your three most recent payslips and your P60 for the most recently completed financial year
- If you are self-employed, your accounts for the last two completed accounting years, along with your last two years tax returns.
One of the more challenging documents to obtain is the pension valuation, often referred to as a Cash Equivalent Value (CEV). This is best done by using a Pension Inquiry Form called a Form P.
It can take a long time to collate all the above documents, especially the CEV. so it makes sense to start getting the information together as soon as possible. You may find it easier to complete the form once you have the documentation in front of you.
Once both parties have completed and signed their Forms E, they will be exchanged simultaneously. At this point, each party can consider the other’s financial position and seek advice on how to move forward in the negotiations.
For more details on finances in divorce, contact David Anstee.