When negotiating a financial settlement during divorce or dissolution, there are several ways of dividing up your assets. You may decide to split things straight down the middle, or figure things out on a more flexible, case-by-case basis. Perhaps you’re able to come to an out-of-court resolution between the two of you, or maybe you need some extra help in deciding what’s fair. When one of you is in a financially weaker position, however, arrangements should be made to ensure that the more vulnerable partner is able to adjust to their new circumstances – either via a lump sum (‘a clean break’), or ongoing spousal maintenance.
A Clean Break
A clean break means dividing up your assets and ending all financial ties between you and your ex after divorce. This doesn’t necessarily mean that assets are split equally, however – one party may choose to keep the family home and pay the other party for their share, or ‘buy out’ a claim for maintenance in one lump sum, for example. Clean break payments might be paid in one go, or over a series of instalments. This lump sum may then be invested and drawn out as regular income for the financially weaker party.
The main consideration for choosing a clean break is that no future financial claims may be made against one another, and no spousal maintenance will be paid, so it’s important to get advice from your solicitor before making any agreements to ensure that you are making the right decision for your circumstances. If your case is contested, the court can impose a ‘buy out’ instead of maintenance if this is seen to be the most appropriate course of action.
Spousal maintenance involves regular payments from one party to the other to support them financially. It is only paid when one partner is unable to support themselves without financial aid and is calculated based on living expenses, income, dependents, and future earning potential.
The length of spousal maintenance usually depends on how long the couple have been together. For those who have been together for five years or less, maintenance may not be paid at all, or for a short period only. For couples who have been together for a long time, or in cases where one member has not been in employment for a considerable period (for example, sacrificing a career to raise children), maintenance can be paid over the long term, or for life.
Spousal maintenance will generally cease to be paid when the person receiving the payments remarries or enters into a civil partnership, or when one or other party dies. The paying party may also apply to have maintenance reduced if their ex moves in with a new partner.
Reaching a Financial Settlement
In all cases, it’s vital to have the advice and guidance of an experienced family law solicitor when dealing with financial issues. Whether you are able to reach a resolution out of court, via collaborative approaches such as mediation, arbitration, or collaborative family law, or need to take a dispute to court, remember that your aim is to agree on a settlement that is fair and allows you both to move on with your lives. Fostering animosity and seeking to ‘fleece’ your ex of as much as possible will only increase the time and money spent on fighting in court – reducing your overall pot of assets and causing unnecessary stress. Use the support of your solicitor to find the best way forward and make a fresh start in a financially secure situation.
For more information on separation and divorce, get in touch with our friendly, down-to-earth family lawyers at Frances Lindsay & Co.clean break, divorce, finances, separation, spousal maintenance