What do you know about financial settlement after divorce? Today this article delves into this subject.
It’s a fact that going through a divorce is a painful and stressful experience. Apart from the emotional impact, you have to deal with the financial implications of dissolving your marriage.
Although you will get a share of your partner’s assets, they also have a claim to your finances. To avoid unpleasantries and additional headaches, you should go for a financial settlement after divorce. It outlines how you will share your money and assets with your spouse. Finding a solution to financial dilemmas immediately after separation will save you the stress of dealing with it in the future.
Why should you obtain a financial settlement after divorce?
Even after years of divorce, the law allows your partner to claim your finances. There is no time limit for the claim. Therefore, without a legal settlement, your spouse can have access to your funds in the future. It is wise to put it to bed as soon as you separate. The agreement needs to give specific terms agreed upon by both parties concerning finances. Among the financial affairs to deal with include:
- Money in joint bank accounts, savings, and shares
- Child support and spousal maintenance
- Sharing pension and loan obligations
Most of the time, financial settlement takes months or the duration of the divorce proceedings. However, it all depends on the nature of your relationship with your spouse. If they make things difficult, reaching an agreement may take longer than necessary.
What types of financial settlements exist?
When reaching an agreement on your finances, both of you can agree to settle it out of court, or you can go to court. If you choose to work out the financial settlement, it will save time and money. In this scenario, each party drafts their agreements, and you can discuss the details and agree on the terms. However, you need to legalise the deal by preparing a consent order, which will be approved in court.
You may need the services of family law specialists to draft the consent order and take it to court. The agreement should detail the division of assets and arrangement for spouse maintenance and child support. The judge usually approves the consent order depending on the fairness of the settlement.
When your finances are complicated, or your spouse is unwilling to have a sit-down, you can apply for a financial settlement in court. You can only apply if your attempt at mediation was futile. The court will hold many hearings and proceedings before reaching a final decision. It could take almost a year to finalise the process.
How are finances divided in a divorce?
There is no universal formula for a financial settlement. You can agree on how to distribute the assets, divide the loans, pensions, and child maintenance. However, if you apply for a court settlement, the judge makes all the decisions on the division of assets.
The division of assets will depend on factors such as duration of the marriage, age, living standards, and earning ability. While the court usually strives for a fair split of assets, they ensure the children get adequate maintenance.
Effect of cohabitation on the financial settlement
It is best to reach a financial agreement before either of you remarries or starts cohabiting with a new partner. When you start cohabiting, you lose the right to claim your spouse’s assets. However, they can still file for a claim on your finances. If you have reached a settlement and you are paying spouse maintenance, you can cease payment if your partner remarries. Cohabiting does not affect the amount of support to your partner until the marriage is official.
Financial settlement during divorce is tricky. Therefore, if you cannot handle the specifics, get family law specialists Sydney to assist in the process.
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