The division of assets in divorce settlements needs greater consideration as more people face the reality of divorcing in the credit crunch and the realisation that assets can go dramatically down in value as well as up.
Lindsey Canning, Associate in the divorce and family team at Wake Smith said: "A number of high profile cases in the news recently have highlighted the need for couples to seriously consider the effects of the credit crunch and how their divorce is handled. This is not just about millionaires; the implications extend to anyone currently going through a divorce settlement. Everyone needs to appreciate the affects that the economy is taking on the value of their assets."
Lindsey's advice on divorce in the credit crunch:
- If there is to be a sale of any property then divide the proceeds by way of a percentage split and not set amounts.
- If you decide that you want to buy out your partners share in a property, it is worth paying for a formal valuation by a chartered surveyor. Free estimates can be unreliable as the estate agents expect the property to go on the market for sale and so the property value will be determined by the offers made. Without an expert report you may be paying out more than you should.
- Should your future employment be uncertain, then consider whether it is sensible to offer to pay an additional capital sum to your ex partner to capitalise any maintenance claims. If you are paying maintenance and then lose your job, the maintenance can be changed. If you have paid a lump sum instead of maintenance then it is unlikely that you will be able to vary the payment.
- The Court of Appeal has said that the natural processes of price fluctuation whether in housing, shares or any other property, however dramatic, is not sufficient to reopen the settlement. People need to assess the risk of keeping property and investments.as part of the settlement.
- It is vital to act quickly. If you consider that a "new event" has occurred to alter the settlement reached then you must act immediately and seek expert advice. Once the court has made an order about property and capital it is intended to be a final order. There are very few successful applications made to the court. If the "new event" relates to a partys ability to pay / require maintenance then an application should be made to the court as soon as possible if no agreement can be reached.
For further information and advice, please contact Lindsey Canning on 0114 266 6660 or email [email protected]
