Financial Settlement

Ancillary Relief is the legal process by which the matrimonial assets are divided on divorce leading to a financial settlement.  It is the application that you make to the court to obtain a legally binding financial settlement.
Getting a divorce these days is usually quite straightforward, especially if you both agree that the marriage is over. The difficult bit tends to be agreeing a financial settlement so that you can resolve practical issues such as where to live, arrangements for the children and money matters generally.
It is important to understand that when you get married you take on a financial responsibility for your spouse that does not end on divorce.  That financial responsibility continues even after your death against your estate. Married people have financial claims against each other’s income, property, pensions and other assets. The claims are not limited to jointly owned property and assets.  Therefore, it is important to deal with these claims properly with a court order as this is the only way that you can be sure your spouse would not be able to make a financial claim against you in the future many years after you are divorced.
This guide is intended to explain the process for obtaining a financial settlement in everyday terms so that you understand the framework. Of course this can only be a general explanation but it applies no matter how valuable your assets are.

  1. The Application for a Financial Settlement  (Ancillary Relief) is made by the Petitioner or Respondent after the divorce proceedings have been started. It is a separate application to the application for a divorce.
  2. The Court fixes a date for the first court hearing. No Court appointment may be cancelled except with the Court’s permission.
  3. Both  spouses must, at the same time, exchange with each other and send to the Court financial disclosure in the form of a financial statement, the Form E. This is a lengthy document that sets out full details of all assets, liabilities and income.
  4. At the first court hearing the Judge must decide what evidence the court will need to make a financial settlement. The judge will make an order telling everyone involved in the case what further evidence they must obtain and when they must obtain it by. The judge will also list the case for a second hearing known as the Financial Dispute Resolution Appointment (FDR).
  5. The second court hearing is the Financial Dispute Resolution Appointment (FDR).  The FDR will normally take place when all the evidence has been exchanged.The purpose of the FDR appointment is for discussions and negotiation. The parties have the opportunity to negotiate financial settlement with the assistance of the court. If an agreement is reached the Court will make the appropriate Order, if not the case will be listed for a final hearing.
  6. The Final Hearing Both parties must attend the final hearing when the court will consider all the documents that the parties have filed in connection with the case. The court will also hear the parties oral evidence which is given under oath. The court will then make a final order for a financial settlement which will be binding upon both parties.

The court has the power to make a number of different orders in matrimonial proceedings including an order requiring one party to pay the other a lump sum, the sale or transfer of property, spousal maintenance (otherwise known as periodical payments) and in some limited circumstances child maintenance. The court also has the power to make temporary orders.
A Note on Costs
Generally costs are no longer recoverable in financial settlement proceedings. This means the each party must expect to pay their own costs. The court will only order one party to pay the others costs if it is convinced that the paying parties’ behaviour has wasted costs.

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The information contained in these documents does not constitute legal advice and is not a substitute for a personal consultation. Call us for an appointment today!