posted 2nd October 2023
Common Mistakes in Divorce Settlement Negotiations
These are the ones that cost people most, in roughly the order they occur.
Agreeing before knowing what there is
Couples often reach an understanding over the kitchen table and only afterwards find out what the pension is worth or what is actually owed on the mortgage.
An agreement made without the figures is not an agreement, it is a guess. And once a position has been stated it is difficult to move away from without it looking like bad faith.
Not realising the divorce leaves the finances open
The most expensive mistake of all. Ending the marriage does nothing about the money. Without a consent order, either party can bring a financial claim years afterwards, against assets built up long after the separation.
Plenty of people discover this when a former spouse reappears after a windfall or an inheritance.
Keeping the house at any cost
The family home carries meaning that a pension does not, so people fight for it and give ground elsewhere to get it.
Sometimes that is the right call. Often it means taking on a property that cannot comfortably be run on one income, while giving up a share of a pension that would have mattered more in twenty years.
Treating the pension as the other party's money
Pensions are frequently the largest asset after the house and frequently the least understood. A party who waives a pension claim to secure something immediate may be giving up more than they realise.
Mixing up grievance and need
Feeling wronged is legitimate. It is also irrelevant to the settlement. The grounds for the divorce do not affect how the finances are divided.
Positions taken out of anger rarely survive contact with the section 25 factors, and arguing them is expensive.
Failing to disclose something
Assets that surface later can undo an order that has already been approved. A party found to have concealed something ends up in a considerably worse position than one who disclosed it at the outset.
That includes cryptocurrency, which is property under English law and has to be disclosed even though Form E has no box for it.
Leaving the joint accounts running
Separate from the settlement itself. Joint borrowing affects both parties' credit records for as long as it exists, whatever the order says about who is responsible for it.
Rushing, or refusing to move at all
Both extremes cost money. Agreeing quickly to end the discomfort tends to produce terms that are regretted. Refusing to move at all produces a contested case at £20,000 to £30,000 each, decided by a Judge.
Leaving nothing in writing
Whatever is agreed has to be recorded and made into a consent order. An understanding between two people is worth nothing if one of them changes their mind.
Getting the timing wrong at the end
Applying for the Final Order of divorce before the financial order is in place can have serious consequences, particularly where a pension is being shared. Most professionals in this area advise waiting.
Most of these are avoidable with someone who has seen them before. We work for both parties, establish the full picture first, then negotiate terms both can accept.
Get in touch for a free initial consultation.
The content of this article is for general information only. The information in this article is not legal or professional advice.
