What’s the Damage? Divorce and your Wallet

OK, Let’s get a few things straight before I get started. I am just setting out some general principals of what you should expect if you have been daft enough to get married and then find that it is all going belly-up. If you are not currently married this may give you further food for thought before doing so. If you are married and are just curious about what might happen then this is also for you. If you are married and it looks like you may not be much longer you need to take some professional advice specific to your own situation. For various professional reasons, I cannot give advice here on specific cases so please don’t ask. Please also bear in mind that the law changes. It is not static. The current situation is as at the date when this is posted. If you stumble across it several years later it may not necessarily still be so.

I would also say that, however bad your divorce is, firstly it is unlikely to be as bad as mine was. Secondly, as bad as my divorce was, I got through it and, in the words of Sir Elton, “I’m still standing”. Expect a bumpy ride but have faith that you will get through it. Life goes on and you will have an opportunity to remake yours, hopefully better than it ever was before.  Also, you will see some hair-raising financial figures below. My view is that if you are in a marriage that you both want to save then you should make every reasonable effort to do so. If the reason for trying to save it is financial though, then ask yourself what is more important? Remaining in an unhappy marriage for the rest of your life because of the cost of getting a divorce or being skint for a bit but having a fresh start and chance of happiness?

So, first things first. As you are probably aware, marriage creates a legal union between the two parties. As soon as you ‘tie the knot’ (interesting expression, doncha think?) you each have legal responsibilities to each other. If you want to get out of a marriage, it has to be dealt with formally, and legally. A lot of what you might have seen or heard in the media about divorce is not necessarily true. In fact, a lot of it is usually wrong.

For example, there is no such thing (in the UK) as a ‘quickie divorce’. You have to have been married for at least one year before you can start proceedings to get divorced. When you start divorce proceedings there is one procedure only, there is no ‘quickie’ option.  You should expect the procedure of actually getting a divorce, from the time that you submit the documents to the Court until you actually get your ‘decree absolute’ which finally dissolves the marriage to be around 4 to 6 months. That is assuming that everything goes smoothly, both parties are cooperating and there are no complications caused by sorting out the finances. If things are not plain sailing then you can expect things to take a lot longer. My own divorce, which was anything but plain sailing, took about 18 months.

There is one ground for divorce; that the marriage has ‘irretrievably broken down’. In order for the Court to be satisfied that this is the case one of 5 factors set out by the law must be shown to apply. These are (and I’m paraphrasing): Adultery, unreasonable behaviour, separation from each other for 2 years or more (and you both agree to the divorce), desertion (also 2 years but different circumstances) or 5 years separation (consent of the other person not required). Evidence is required, although that is not usually a problem if the other person agrees to the divorce.

The Court fee for commencing a divorce is currently £410. It seems to be increased more frequently than any other fee. To apply for a decree absolute, the fee is £50 currently. The person who starts the divorce has to pay the fees initially, however, the court has the power to order that the other party (the ‘respondent’) should pay the costs if they are felt to have been primarily at fault. If your ex has a solicitor you’d be expecting to pay their fees as well (if the court thinks you were to blame). Budget upwards of £750 plus VAT on top of the court fees. If you’ve got your own solicitor as well, you’ll need to add their fees in. The hourly rate of divorce practitioners is usually in the region of between £120 and £300 per hour, plus VAT depending on where you are, the ‘prestige’ of the firm concerned and the seniority of the individual lawyer. If you are the respondent they will spend probably between 2 – 4 hours dealing with the divorce only (i.e. nothing else in connection with finances or children). You do the maths.

So, that’s the cheap bit out of the way. What about the marital finances? Glad you asked friend. If you thought the cost of getting a divorce was a bit steep, wait until you get a load of this.

I won’t dwell too much on the court fees or legal costs. That is likely to be the least of your worries. So you have some idea though, resolving finances by agreement, and with no court hearings, is not likely to cost less than about £1500 plus VAT if your case is really simple. If Court proceedings are issued then factor around £5000 plus VAT if things settle without too much hassle. If things remain contested up to or close to a final hearing double that (at least). Your own solicitor will advise you on likely costs though. You shouldn’t necessarily rely on these figures. Worst case, costs could be very much more in excess of these figures. Cases costing several tens of thousands to each party are not that unusual in London, especially if there are lots of assets to squabble over. Costs can vary widely though, depending on the solicitor, law firm and area of the country you live in. Some divorce lawyers will suggest that these figures are a bit high, some will maintain that they are laughably low. It depends who you talk to. In my experience these are at the lower end of the spectrum.

So how do lawyers work out how to divide up cash and assets on divorce. Well, if you were expecting a simple formula you’ll be disappointed. Marital finances, known in the trade as ‘ancillary relief’ or ‘AR’ for short, is a dark art on a par with anything going on at Hogwarts. Because each case is, in theory, different, it isn’t possible to have one clearly defined formula. This means that in any one case there are lots of possible outcomes.

The law sets out a number of factors which the Court should take into consideration. The list is not exhaustive. If you want to have a look at it you can find it at section 25 of the Matrimonial Causes Act 1973. It still won’t tell you what you are likely to get (or lose). Because the whole business of divvying up the goods is so flexible (read: vague) lawyers are always looking to apply little formulas which they can use as a benchmark. There are lots of semantics involved but, as a general proposition, the starting point is a 50/50 split. Of EVERYTHING. Yes, I did mean everything. The lawyers/court would then look at the Section 25 factors (and anything else that seems to be relevant) to see whether the balance should be adjusted. In a very short marriage, where there are no kids the Court may just look to return the parties to the positions they were in before they married. Then again it may not.

Back to the point of dividing up everything. You will need to disclose every asset you have, whether you think it has nothing to do with her or not. If you don’t and your subterfuge is later discovered, any order made can be overturned and everything looked at afresh. You will also get hit with a big costs bill. Being completely honest is crucial or it will come back to bite you on the arse.

Just to drive the last point home, everything is in the pot for division. Your pension, your personal possessions (nice watch collection for example) any legacy which you may have been left by a deceased relative. The lot. You can try to argue that something shouldn’t be added to the pot, perhaps because you acquired it before the marriage, but you’ll need to make a really good case. Best to assume you won’t be successful then you won’t be disappointed (which is not to say you shouldn’t try).

Then there is ‘spousal’ maintenance. I am going to deal with child maintenance in a future post. You may be liable to pay money to your ex on top of any money for the kids as well. This is likely if there is a disparity between your earnings and she requires some time to be able to become financially independent. The most likely scenario where ‘spousal maintenance’ (known as periodical payments in the trade or PPs for short) is ordered is where there are children. In that circumstance expect PPs to be ordered and to be payable, in some way or another until the youngest child has reached 18 or finished full time education, whichever is the later.  Oh, yeah, better also factor in that if there are any marital debts and you have the better income, you are likely to be expected to be responsible for those as well, even if your ex ends up keeping the sofas that you got the interest free credit on in the first place.

How much are you likely to have to pay by way of spousal maintenance? Again, this is pretty vague but, as a principle, the Court will be looking to make sure that your ex, with the children, can afford to maintain a reasonable lifestyle. Your maintenance will therefore plug any perceived gap in her finances.  In cases where you are significantly wealthier than she there is likely to be an element of maintaining a certain lifestyle which she enjoyed during the marriage.

Unfortunately this can, and does, lead to situations where an ex-husband is reduced to living in a shared house or grotty bed-sit, because the wife is often the ‘primary carer’ for the children and her ‘reasonable needs’ will then top-trump his.

Is all of that not sounding very appealing?? No? You have a realistic grasp of the situation then.

The foregoing is, of course, the briefest overview of what might happen. You may come out of a divorce feeling happy that justice has been done and that you have been fairly treated. Pigs may also sprout wings. My view, for what it is worth, is that divorce punishes men disproportionately, whether they were responsible for the marriage breakdown or not. You may not find it so. Who knows, you may be ‘lucky’.

If you find yourself in this situation, the best advice I can give you is as follows:

  • Don’t get married. Ooops.. Too late.
  • Get professional advice and quick. Notwithstanding the toe-curling figures I’ve floated for dealing with divorce work, this is not something you should skimp on. It can cost a lot more if you try to cut corners. You can always go for one interview with a solicitor for a fixed sum (most don’t do freebies any more) and decide what to do after that. Get him to quote you for the work. He should do that anyway and confirm it in writing if you decide to proceed.
  • Find the marriage certificate. You’ll need it if you are going to petition her for divorce.
  • Start getting full details of your finances together. A year’s worth of statements, Last year’s P60, written confirmation of the value of any capital assets that you have and any outstanding debts. DO NOT try to hide anything or, even worse, try to get rid of assets. You are highly likely to be found out and it will not go well for you.
  • Make an inventory of the contents of the marital home. Room by room.
  • Make a pact with yourself that you will try to remain dignified and respectful even if your other half becomes a vile, screaming banshee.
  • NEVER involve children in the dispute. Do not, ever, denigrate your ex to or in front of the children. She is still their mother and however much you may come to resent/hate her, it is your responsibility to shield them from it. Divorce is tough enough on children without them being expected to take sides.
  • Don’t get remarried. Unless it is to a fabulously wealthy heiress, or Jennifer Lawrence. In which case, definitely get remarried.
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