The breakdown of a relationship is in most cases a difficult time for all involved, especially if there is no financial agreement in place, drawn prior to or during the relationship. In these instances, it may be prudent to engage the services of a skilled family lawyer.
Without a previously created financial agreement, the involved parties need to agree on what is called a financial settlement. This is essentially an agreement that encompasses a division of the net assets of the parties, along with any liabilities. This might cover real estate, jewellery, cars and debts.
It is important to note that this process can differ in complexity, depending on the parties involved, the length of their relationship, financial arrangements during the relationship and their current respective financial positions.
Following the financial settlement process, the parties will each hold their share of the assets and there will no longer be shared liabilities. As part of property settlement, some of the assets may change hands as one of the parties may have to transfer their interest in an asset owned individually by that party to another party. There may also be a need to pay cash adjustment to one of the parties.
An agreement out of court is usually preferable, to avoid the potentially lengthy, difficult and financially burdensome process that litigation entails. To make these out of court settlements legally binding, court orders made by consent of both parties are a suitable option. Another option is to enter into a Binding Financial Agreement.
There are several issues that parties should consider before beginning the process, including:
- The value of the assets being divided among both parties (this may require a formal valuation);
- What each party is seeking to achieve through the financial settlement process;
- What financial arrangements will be feasible for each party to commit to.
If parties are unable to come to an agreement on how to divide their assets, they can bring the matter before the Family Court. The court will then take into account how both parties contributed to the relationship, how they contributed in terms of other non-financial capacities (for example as parents), and the future financial position of the parties.
Before meeting with an expert family lawyer, ensure you have collected all the relevant information to present to your solicitor, to get maximum benefit from your consultation. In most cases, this information includes the dates both parties started living together or were married, the date the parties separated, the birth dates of any children born of the relationship and the dates related to the purchase of significant assets (houses, cars and other expensive items). Financial information is also critical.
Once this information has been put together, the parties are ready to commence negotiations with each other regarding their property settlement, through their respective solicitors or, in some cases, directly with each other.
With financial settlements, which differ in complexity, it's important to consider speaking to expert lawyers prior to undertaking the settlement process with the other party.