Negotiating with your ex-partner/spouse
Negotiations can be defined as follows; to confer with a view to compromise or reach an agreement; a means of getting what you want from the other party, and/or; a process of back and forth communication. Common interests that connect parties, and differing opinions or objectives are key elements of negotiation.
Before negotiations can progress both parties have an obligation to make full and frank disclosure of their financial position to the other party. Once both parties have collated their disclosure they are in a position to exchange this with each other. Once each party’s solicitor is satisfied that they have received full and frank disclosure, negotiations can begin. Offers of settlement are put forward by way of letter or email.
You should always start any negotiations by clearly outlining your position in respect of each asset or capital owned or held by either you or your ex-partner. The other party must review and respond by setting out their position in respect of the same and any additional assets or capital they wish to include.
You must also consider what should be done with the family matrimonial home (FMH); is it to be sold and if so how should the proceeds be divided? If either party objects to sale and wishes to occupy the property further, how will the equity in the property and/or legal ownership be adjusted? There may also be other assets such as bank accounts, investment or pension funds.
Once agreed, you must make it clear to the other party what has been agreed and the best practice is to record the agreement in a memorandum of agreement. It is also a good idea to get a signed consent through solicitors. The consent order aims to give effect to any agreement reached between parties with regard to their financial arrangement post-divorce or separation.
In negotiation theory, the Best Alternative to a Negotiated Agreement or BATNA is the most advantageous alternative course of action a party can take if negotiations fail and an agreement cannot be reached. BATNA is the key focus and the driving force behind a successful negotiation because you cannot make a wise decision about whether to accept a negotiated agreement unless you know what your alternatives are.
Financial Orders
In Family Law, the process of applying for Financial Remedy can also be referred to as Ancillary Relief. There are different types of powers available to the courts in deciding contested matters. Some of the financial orders a court may issue include maintenance pending suit, income orders or capital orders.
There are two categories of financial orders available; income orders and capital orders. An income order may include either maintenance pending suit, periodical payments or secured periodical payments. Capital orders on the other hand include the likes of property adjustment orders, lump sum orders, orders for sale of property or pension sharing orders.
Matrimonial home
It is important to decide what to do with the ‘matrimonial home’ and ‘capital assets’. These will need to be split following divorce or separation and can be achieved in either of the following ways; immediate sale and division of proceeds, outright transfer from one side to the other, creating a deferred trust of land [usually for the benefit of children], or a deferred charge [payable to the other side upon release or sale of the property].
There are also provisions within the Matrimonial Causes Act 1973 that aim to prevent the disposal of property or set aside an order issued by the court [potentially ordering the sale or transfer of property].
Pension Orders
There are also a range of orders available when it comes to dealing with pensions for example a pension sharing order, pension attachment order or ‘off-setting’. A pension sharing order is an order whereby the court will split the pension at the time of divorce so that the wife either becomes a member of the husband’s scheme in her own right OR takes a transfer of a designated sum into her own pension scheme.
Child Maintenance
The parties to a divorce or separation involving children may already have agreed a figure to be paid for child maintenance by one party (usually without full custody) to the other party (usually with full custody). If no agreement has already been made, you can either agree a figure or make an application to the Child Support Agency or Child Maintenance Service for full assessment, decision and enforcement.
Spousal Maintenance
In addition to the splitting of finances to reach a clean break order, you may be ordered to pay maintenance for your ex-partner/spouse. Whilst the starting point is a 50-50 split, there are also various considerations taken into account in deciding whether one side is entitled to more than half.
The welfare of any children is an important factor, if not the most important factor. Courts will also consider the income and earning capacity of both parties and weigh these against the needs and responsibilities of each, in the foreseeable future. This includes considering any details of outgoings such as mortgage repayments, gas or electricity bills etc.
Although it is difficult to measure a person’s standard of living, it is taken into account by the courts when deciding financial orders. Additionally, the courts will look at the ages of the parties, the duration of the marriage, any disabilities, what contributions were made during the relationship, and the conduct of parties.
