Take control of your finances BEFORE you divorce
It is crucial to get a grasp on your finances before any divorce proceedings start. This applies equally if you have a financial team working on your behalf, or whether it’s just you and your accountant.
If you want to reach a fair and reasonable financial settlement as part of your divorce, you’ll need to disclose your own assets, and in turn receive in turn full disclosure from your soon-to-be-ex-spouse.
In the second of her articles, Director Anne Leiper explains how full and open financial disclosure is important for any divorcing couple, regardless of their net worth.
How to account for your finances in 30 minutes
If you don’t know where to start with disclosing your finances, the Money Advice Service (MAS) have produced a handy downloadable spreadsheet that guides you through the process of accounting for all your financial assets.
Whilst the 30-minutes completion timeframe is wildly optimistic, it does lay out a sound action plan that anyone divorcing, billionaire or otherwise, should follow:
- Draw up a budget and control current spending (divorces do cost money even when amicable)
- Plan for costs, legal fees and “the likely expense of running two households” or more
- Calculate your worth in terms of Property, Assets and Debts
- Work out support arrangement costs, including child maintenance, private school fees, etc.
Saving up for your divorce
Whatever your income, it's always advisable to out money aside for your divorce. Use the MAS Quick Cash Finder to find out how much you spend on regular items such as lunches, coffees, gym membership, clothes, etc. It is astounding how these seemingly small items do add up, and savings here can also be considerable. This is particularly useful at a time when maintaining a sufficient cash flow will become important.
We doubt Jeff Bezos would bother counting his coffees, but the principle is sound for most of the rest of us!
Plan for legal fees
Any divorce in England and Wales incurs fixed fees from the court, which are set by the government. In addition, you should budget for your legal team’s fees, which will vary according to the complexity of your finances, family situation, financial setup and level of current contact with your spouse. (See below on how our transparent billing could save you money.)
Calculating your net worth - property
The value of a property will depend on market forces, but in terms of your divorce, it’ll also depend on:
- The amount of any remaining mortgage
- What’s left to pay off, by when and by whom
- Any early repayment costs or fees
- Subsequent selling costs
Again, the MAS spreadsheet will guide you through the process of calculating this. Calculating your debt is also very important, not just for an accurate figure of worth but to ensure you can continue with repayments after you separate.
Child maintenance costs
If you have dependent children, you will need to calculate how much child maintenance might be due by the non-resident parent. Needless to say if you’ve never had to pay this before, you’ll need to know what is the ‘going rate’ before entering into negotiations. The Child Maintenance Options website has a handy calculator that will give you a ballpark figure that we can take forward into negotiations.
Paying for pets
Remember, any pets are classed as chattels, which is a term to describe any item of property apart from land. So you’ll need to factor in who gets the pets, including valuable animals such as stud horses, livestock, racehorses and polo ponies, and the ongoing cost of keeping them. For more details, see our article: “Who gets the dog?”
The true cost of good advice = priceless?
Please don’t be tempted by online, ‘quicky’ or ‘cheap’ divorces. As experienced divorce lawyers, we have seen people give away so much they were entitled to simply by filling in their forms incorrectly or not taking time for proper legal advice. It saddens us that even just 30 minutes invested in talking to us and gaining invaluable insights could have ensured a totally different outcome.
As a new client, you may be entitled to our free, no obligation 30-minute consultation to discuss your divorce. You can also extend the consultation by prior arrangement to an hour or more if you wish. Call us, email us or fill in our reservation form online.
Why pay for professional legal advice
In any divorce, taking advice from an experienced family law firm such as LGFL will, literally, pay dividends. We know exactly how to ensure you get a full and fair settlement, and how to ensure your ex has made a full and frank disclosure of their assets. We can also help you protect your assets and your future from inflated claims made by your ex-spouse. Let’s be honest, the more you are worth, the more you stand to lose…
Transparent fees for your divorce
At LGFL, we are committed to transparent pricing for all legal action, including divorce. You are always fully informed of costs, with no hidden fees, and no unexpected charges. Our costs are usually based on the amount of time we spend working on your behalf, based on our standard hourly rates.
We fully itemise all work we do on your behalf, including complete details of what has been done. You can ring and ask for your outstanding bill figure and costs of any work in progress, at any time.
Expert financial settlement advice from LGFL
For more details on our bespoke, pragmatic and transparent approach to divorce: