If you think a separation is on the cards, considering your finances should be one of the top priorities. The timing of your separation really does matter where money is concerned.
‘Many of my clients take advice well before any separation. Usually their spouse does not know, and no decisions had been made’ says Fiona McLeman. ‘They want to know what to expect and the practical steps they can take to best protect themselves. They may well not have considered tax issues. It’s then quite usual to see those clients again 6-12 months later. That’s when, not only are they emotionally ready for divorce, but also better prepared in practical and financial terms’
Here are some important factors to consider well before you walk away.
Tax tax tax
When you are married you can make tax free transfers between each other without attracting Capital Gains Tax. Once you separated, you have until the end of that tax year to make tax free transfers. This is particularly important where assets such as property are concerned. “Even if you continue to live under the same roof, you may be ‘on the clock’ if you have taken formal legal steps towards a separation. I always advise my clients to exercise caution and consider delaying a separation until after 4 April if that is feasible” says Karen Fox.
If you’ve got a buy to let, don’t assume you can move into it on separation. Check the mortgage terms. Many mortgage companies won’t agree to this. ‘Many clients make the mistake of thinking that they own the property and can just move in, but it may be a serious breach of the mortgage terms that usually prohibit landlords from occupying their own property’ says Christina Hale of FM Family Law.
Maintain spending patterns
You will need to produce a budget as part of the disclosure process and it’s important to show your usual spending, especially if maintenance is under consideration. Although it may feel counterintuitive to maintain your outgoings when finances are most likely to be under pressure, it’s necessary to help assess the correct level of spousal maintenance. Don’t significantly decrease your spending or your quality of life to save money in the short term.
Get financial advice
You’re going to be making some important decisions about your money. We recommend advice from experts in their field such as Fiona Sharp and Stephanie Clark at www.vervefinancialplanning.co.uk “if you need help with your post separation budgeting or clear direction through a pensions maze then I can guide you” says Fiona Sharp.
You’ve got joint banking?
The Money Advice Service suggests that if you have joint accounts or loans with your ex-partner, you should contact your bank or loan provider to explain what has happened. This is especially important if your break-up isn’t amicable. However, warns Sue Bailey, ‘be wary that banks can freeze joint bank accounts if they consider there is a dispute between you and your spouse. This can be hard to undo, as well as potentially costly in the legal costs of unravelling a frozen bank account and reorganizing finances’
Watch out for the credit cards / overdraft
You are each jointly and severally liable for any joint debt. If your partner plunders the joint account and it goes overdrawn, you will be liable for it all.
Prepared to be full and frank?
As part of your divorce process, you will both be expected to give full and frank disclosure about your finances. You should not be able to keep assets, investments or funds hidden. Typically the financial disclosure process looks back only over the last 12 months when your bank statements for that period will be disclosed. Is there anything there you might not want disclosed? Watch out though as in some cases, a longer period of financial disclosure may be ordered by the court.
Don’t assume that you can go on a forensic fishing exercise. There are strict rules about how to deal with financial papers you’ve got hold of that don’t belong to you. Take advice and deal with the disclosure process properly.
FM Family Law are experts in giving pragmatic and sensible legal advice about the law, but also how best to prepare for separation: legal and financial.
You’re in an unhappy place and you don’t know what to do. The relationship isn’t working. You’ve grown apart and you want different things. You’ve tried counselling. You’ve tried talking. You’ve argued a lot. You know you don’t feel the same way towards him/ her like you used to, yet you still don’t know if it’s the right thing to make the break. You’re at a cross roads, (in some cases a spaghetti junction). Your mind is a scramble and nothing seems right.
Don’t worry, you’re not alone.
It’s not unusual to find yourself facing obstacles to ‘moving on’. We, us humans, are complex creatures. Our psychological make up is defined by our experiences as children, which inform, influence, and shape and underpin our behaviours as adults. We live and learn (most of the time) from our observations, our experiences, and our mistakes. We manage constant decisions of an everyday nature and as we navigate through challenges in our work, family life, and our friendships. None of us are the same. We have unique DNA. Yet, it’s right to say that we all face similar emotions when faced with similar lifetime challenges and crises.
This article is about distilling the challenges to separation to help you understand where you are in your journey and help pave a clearer pathway for you.
Obstacle 1 ‘For the sake of the kids’
The kids are the most important thing to you. You don’t want to let them down. You think it might be better for them if you put your needs to one side, and wait until they are older before making the break.
Every family is different. Waiting might be the right thing to do. It’s also not unusual to find that many kids can welcome – indeed cope well with- a separation. Kids are like sponges, they watch adults’ behaviours and mimic them. They might feel sad at their parents separating but generally they find that they can be happy, in two homes filled with love than one home filled with tension. Children can take responsibility for their parents’ unhappiness, and might try to blame themselves. If the separation is handled mindfully and sensitively, your kids are likely to come out of it all a whole lot happier than if you stay together in a toxic and unhealthy dynamic. And, let’s not beat about the bush, kids might also welcome the benefits – another home, a double sets of presents, holidays, etc.
Obstacle 2 ‘Oh but the guilt’
You’re the one who had/ is having an affair. You know the marriage was broken before you met someone else, but he / she doesn’t see it like that. They thought everything was ‘fine’. But it wasn’t ‘fine’, how can they say it was ‘fine’? It was miserable, loveless, sexless, without affection and you know you couldn’t go on any more like that. Yet…. you still feel to blame. You feel bad for the hurt you caused. You want to make it better. You know you probably can’t plaster this over. The wound is deep. But you will try.
This obstacle can manifest in how you deal with the divorce. In some cases the ‘wrong doer’ is burdened with a sense of guilt and wants to ‘do right’. This might mean you want to be more generous in the financial settlement. It’s understandable. You are human, after all. However the divorce court does not penalise the ‘one who had the affair’. The court separates the finances from the reasons for the divorce. It is only in exceptionally rare cases that behaviour in a marriage will affect the financial outcome.
Obstacle 3 – The fear
Ugh, the fear of the unknown. Very few people relish uncertainty. You don’t know what to expect. You don’t know where you will live, how often you will see the kids, whether you can afford ‘all this’. You might think that doing nothing and living with what you’ve got is better than taking the big step into the unknown. But you also know you can’t carry on as you are.
You’re afraid of letting people down. Your parents are in strong lifelong committed relationship and how can you possibly tell them you are separating from your partner. You’re probably terrified. You might feel ashamed.
You are not alone. These feelings are entirely normal. Uncertainty can be managed by getting legal advice to know what your rights are and to give you a better idea of what to expect. Moving on doesn’t mean you are letting people down or that you should feel ashamed. It means you are human and you care about these things. Don’t let the fear of the unknown stop you from moving on.
Obstacle 4 – Time
It has been said “time heals all wounds”. “Time is the longest distance between two places”. It is true! You’re hurting but you’re fed up of being told that time will heal your wounds. It’s a platitude that’s easy to dish out along with ‘let’s have a cup of tea’. Yet you don’t always want sympathy and this can grate. You know you need time for the wounds to heal and then you can move on, but you want it to happen NOW.
So, this is natural. Yes, pain is hard and you want the pain to go away. But the five stages of grief make up our learning to come to terms with what’s happened and the loss we feel. You need to let them take their course. You may have moved on from the denial stage, or the anger, the bargaining, and the depression. You might even be moving into the acceptance stage but boy is this taking a long time. One friend of mine took a year to hit the social scene after a painful break up, preferring to stay home alone in front of the TV and wood burner, than face the bright lights and loud music of the city’s singles and bar scene. The first time she went ‘out out’, she said felt like a rabbit in the headlights, and bolted back to the safety of her home to lick her wounds. You see, it WAS too soon for her. Yes! She needed TIME. Give yourself time. Don’t rush this. Go at your own pace.
Or perhaps you simply don’t have the time it dedicate to working out how and when to separate… You are ‘just too busy’….. The kids must come first. You’ve got the christening of the best man’s baby daughter as well as Aunt Joan’s second wedding coming up and you really should put on a united front for that.
The thing is – there is probably no good time to separate. Are you putting off the inevitable? Or will time give you the chance to work out what is the right thing to do. Only you know the answer to that but perhaps a good starting point is to get some discrete advice from someone who knows about these things and who can help.
Divorce lawyers – we have a bad press but a lot of us really do care about our clients. We don’t assume you’ve come to see us about a divorce. The first thing we ask is “how can I help” and the second is “do you want to save your marriage”.
Obstacle 5 – Money
Every family is different. Many families simply cannot afford to rent 2 homes or live in 2 homes. There might not be enough to go around. “We can’t afford a divorce”. Arguably it depends on what you consider to be ’cost’. The potential damage to your physical health, mental health, and your children by staying in an unhappy marriage has a cost. Is this is a cost you want to pay?
The thought of legal fees may also be scary. Many lawyers offer discounted rates for first meeting. There are pro bono centres offering legal advice such as CAB (www.citizensadvice.org.uk) and local Law Centres. In Cambridge there is the Anglia Law School Law Clinic (www.anglia.ac.uk) and in Norwich there is Norfolk Community Law Service (www.ncls.co.uk)
Legal aid is no longer available, other than in more exceptional cases and mediation.
How about DIY? Did you know that in 2018 the government introduced an online FREE divorce portal called ‘Get a Divorce’ and which can be found at www.gov.uk/apply-for-divorce? You’ll still need to pay the (rather hefty) court fee – currently £550 but low income earners can apply for a reduction on that fee.
Finances and children may also need to be sorted out. You will be well advised to get advice and representation for that. Yet, the more you and your spouse can agree between you, the less the costs will be. Many lawyers are happy to work on a ‘pay-as-you-go’ basis or what is known as ‘unbundled’ in the trade. Seeing a divorce lawyer is not a conveyor belt to a contested expensive divorce. Yes, in some cases the costs can be eye watering but there might be good reasons for that. Most cases can be settled out of court using lawyers, using mediation (www.familymedationcouncil.org.uk) and for those that need more formality there is also arbitration (www.ifla.org.uk).
Obstacle 6 – Letting go
It’s really hard to let go of something that was once so precious and special…. So familiar comfortable, natural. But it’s part of the rite of passage to the future and to help you move on. It’s hard to let go of the hopethat you had for your future. To realign your expectation that life is going to look very different to how you envisaged. You know, give yourself time, get good advice, and surround yourself with those who love you. The future could be a lot brighter than you think it might be.
If you think we can help you overcome the obstacles to moving on, get in touch.
FM Family Law
It’s the season of romance! Valentines Day is THE day to propose! A time to become engaged or betrothed. The term fiancé or fiancée is usually applied to the intended bride and groom. The term derives from the French word for ‘betrothed’.
An engagement is a promise to marry. As a commitment to that promise, many couples mark their engagement with the gifting of an engagement ring. Traditionally, the ring is gifted from the groom to be from the bride to be. However, it’s now fashionable for male fiancés to also wear an engagement ring in recognition of their forthcoming nuptials, and their commitment to their future spouse.
The ring is traditionally worn on the ring finger of the left hand. This developed from the Roman “annulus pronubis” when the man gave a ring to the woman at the betrothal ceremony. Tradition in some countries suggests that the wedding ring is worn on the ring finger of the left hand because the vein on that finger is thought to connect directly to the heart, a symbol of love.
If the engagement is broken, what happens to the ring? The gift of the ring is deemed in law to be an absolute gift from one party to the other. If the engagement ends, the recipient is entitled to keep the ring, as it belongs to them. However, if it can be established that the gifting of the ring was conditional on the marriage taking place, then the ring must be returned. Ultimately, it will be a question of whether the fiancé wishes to return the ring, and whether the donor wishes it to be returned. On either scenario, sadly the ring will no longer represent the betrothal of love that it was intended for. A second home might be found through sites such as preloved and neverlikeditanyway.com.
The notion that the man should spend a fraction of his annual income on purchasing the engagement ring came from a well-known jeweller’s marketing concept which aimed to increase the sale of diamonds. The suggestion now seems to be that a man should spend at least one month’s salary on the ring. Net of tax, the man might hope!
Prenuptial agreements are also now considered more common place as part of considerations following engagements as there are legal moves afoot to have them legalised in this country. Presently they are not but in many circumstances and provided certain recommended conditions are met, the couple will be bound by the terms of the prenup.
If you are looking for legal advice on separation, our family lawyers in Cambridge or Norwich will be happy to help.
Happy Valentines Day from FM Family Law.