Attitudes to divorce have shifted considerably over the past thirty years. Whereas once, admitting you were divorced was done in hushed tones for fear of negative judgements, getting divorced today is largely viewed as taking control of your life or starting afresh. That’s not to say that getting divorced is any easier. As well as the emotional turmoil of accepting that your relationship is over, building a life with someone involves shared assets and finances. In a recent survey nearly 60% of unhappily married couples cited finances as the reason they couldn’t get divorced. Similarly, nearly half of divorcees put off getting a divorce for financial reasons. In this blog we’ll outline what you have to consider, in terms of your finances, when getting divorced.

What happens to your mortgage when you get divorced?

Buying a house is the largest purchase most people will ever make. If you have a joint mortgage it’s important to remember that you are both responsible for the monthly repayments. With passions running high, it may be tempting to think you can just walk away and leave your soon-to-be ex-partner to deal with it. However, defaulting on a mortgage in your name will negatively impact your credit score and even make getting another mortgage problematic.

The first option open to divorcing couples is to sell the property and divide the proceeds between them. If children are still at home, this may not be an option. Having to move house on top of their parents separating will be very upsetting for most children. There are other options.

Sometimes one partner opts to buy out the other. In this case, the property would need to be valued to determine how much the stake in the property will be sold for. You will also need to speak to your mortgage lender even if you aren’t remortgaging the property to fund buying out your ex. The lender will want to be sure you can afford the ongoing mortgage repayments. Some lenders are willing to offer a repayment holiday while you go through the process of divorce. You don’t have to make any payments during this period, the payments are deferred (not written off).

Savings and Investments

If you have joint savings then you should tell your bank that you are separating, to help prevent misuse of the shared money. How you divide up your savings can be agreed informally, but it’s better to speak to your solicitor about making this part of your divorce agreement. This will protect you against your ex-partner coming back at a later date and disputing what was agreed. If you have investments, such as stocks and shares, then you have the option to transfer ownership or to sell them and divide the proceeds. Again, speak to your solicitor to ensure everyone is clear about what has been agreed.

What happens to your pension after a divorce?

Pensions are overlooked in divorce settlements in around 65% of cases. Women who have given up work to raise children are particularly vulnerable to financial hardship following a divorce, since they have not been able to contribute to their own pension and may struggle to restart their careers. Thankfully, the Courts will take this into consideration. Even if your partner agrees that you can have the family home, you still need an income to live off. It’s only natural that you want your divorce to be over and done with. But, equally, it’s only fair that you aren’t penalised for giving up work to raise your family. An experienced solicitor will help you see beyond the divorce proceedings and help to secure your future.

What happens to pre-marriage assets?

Any assets that you acquired before marriage may form part of a divorce settlement due to a process called ‘matrimonialisation’. This can be a complicated legal area, but broadly speaking if an asset that you owned prior to getting married is subsequently treated as a shared asset, by you and your spouse, then it can be considered in the divorce settlement. There are exceptions. In a recent case, the UK Supreme Court ruled that a husband transferring £80 million worth of assets to his wife, in order to save tax, did not constitute the assets becoming shared. An experienced solicitor is the best person to advise you on your personal circumstances.

Other considerations when getting divorced

If you have a Will, then you should rewrite it as soon as you begin divorce proceedings. Issuing divorce proceedings does not automatically change your Will. If you don’t have a Will, then things can become complicated. Starting divorce proceedings does not mean you are divorced in the eyes of the Law, so your spouse would still be entitled to inherit the bulk of your estate. The best way to make sure your wishes are carried out following your death is to have an experienced solicitor write your Will.

At Pilgrim Hope Solicitors we adopt a non-confrontational approach to divorce. We will explain the whole process to you and work with you every step of the way to secure your future.

For a no obligation 30 minute discussion, call 01257 422 500 8.00am to 9.00pm Monday to Friday and 9.00am to 7.00pm on Weekends.