Money is often seen as a leading cause of relationship stress. But concerns about the impact of a break-up on finances, particularly given the added complication of a difficult economic climate, can often shine a light on an alternative to the stressful path to court: collaborative law.
If a couple needs to sell their house to release cash, what are the options if selling promptly is no longer certain?
What if the house can’t be transferred from one to the other because of a shortage of mortgage availability? How do couples deal with a share portfolio or pension that is worth less than when they separated?
What if redundancy for one or both people is a likely prospect, or indeed a reality?
Ongoing communication between couples to tackle these issues and reach a mutually agreeable settlement, particularly when the state of the economy throws financial concerns into sharp relief, has arguably never been so important.
Let’s take Aberdeen as an example.
Since the downturn in the oil and gas industry a couple of years ago, many people getting divorced are faced with redundancy worries (real or potential), particularly if they work in the energy sector, or a related industry.
Add to that a challenging property market, which means those separating are faced with the reality of a longer process to release funds from the sale of the marital home.
In fact, latest Aberdeen Solicitors’ Property Centre (ASPC) figures from the last quarter of 2016 show in the last three months of the year, sales were down 20% compared with the same period in 2015: reflected in an average price reduction.
This means - in cases where paying for a second property isn’t financially viable - couples can find themselves living in the same house until the property is sold and they can eventually go their separate ways.
Through collaboration, people who wish to agree matters themselves can do so with a commitment that no proceedings will be raised as long as the process continues.
The couple assumes responsibility for decision-making, and jointly with each of their lawyers, meet to sort out a detailed settlement that works for them.
Ideally, this will resolve matters, which their lawyers will set out in a formal written agreement, signed by both of the couple, meaning there is no need to ask the court to deal with the finances.
Indeed, the court can deal with any subsequent divorce in a straightforward manner.
If you decide to not go down the collaborative route, or other ways of sorting matters by agreement such as mediation, or the collaborative process doesn’t work out for you, you may find that you need to raise divorce proceedings to sort out the finances.
Whilst the court has a range of options, and any settlement requires to be reasonable with regard to the couple’s resources, the decision making process is taken out of the couple’s hands.
The court can still look at special circumstances and the resources available (including perhaps a reduction in the asset pot). And there is a wide range of orders available to the court, but there is understandably not the same freedom for the couple to choose an outcome that suits them.
As such, it’s clear collaborative law in particular is a good solution for many couples: avoiding the stress of court, and together finding the best solution for them, their family, and their finances.
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