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A New Chapter

24.11.21

When commencing divorce proceedings, navigating the financial landscape can be bewildering. James Matthews spoke to Sandra Davis a partner in the Family team at Mishcon de Reya about retaining your wellbeing (but maybe not your house) on divorce

Faced with a divorce, many spouses are anxious to keep the family home, whether to provide stability for themselves and their children, or because they have poured so much time and care into a beloved property. But keeping the house could be a mistake if the financial consequences have not been properly considered.

The Family Court is not ordinarily interested in who is at “fault” within a divorce – often to the surprise of the spouse who may feel wronged. Bad behaviour, cheating or even abuse is rarely taken into account when it comes to financial claim.

In order to retain a beloved property, many spouses either take on an unmanageable level of debt in order to “buy out” their ex, or forego other assets, such as a valuable pension, which can lead to disaster upon retirement. Obtaining proper financial advice is imperative to avoid risking keeping a house that, as the years pass, could become a millstone.

In financial claims on divorce, you will ordinarily need to exchange monetary information, including bank statements. If either spouse is found to have engaged in wanton dissipation of funds, or transferred valuable financial assets to friends or family members, they may be penalised for having done so.

It’s advisable to resist the temptation to rummage through your ex’s financial documents (or computer) to look for financial information. Taking private documents held on a computer without consent is illegal and you are unlikely to be able to use any information you might find and even risk having to pay the other parties legal costs. You should, however, consider changing the passwords of any accounts your partner has access to. If you don’t already do so, start using a password manager to generate and store unique passwords for all your accounts.

t’s almost always better to try and reach a financial settlement privately. Court proceedings are lengthy and the outcome is often uncertain. Out of court options such as mediation, private financial dispute resolution and arbitration tend to be much quicker and more flexible.

Finally, if there are children involved, it’s key to establish a line of communication with your ex, where safe to do so, ensuring that children are at the centre of any decision-making.

Sandra Davis is a Partner in the Family team at Mishcon de Reya. She has over 40 years’ experience of family law practice and specialises in complex high net worth and ultrahigh net worth cases, often with an international element and involving complex tax and trust issues, as well as in disputes involving children. Her clients include celebrities, entrepreneurs and financiers.

www.mishcon.com

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