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Things you should know

View profile for Julie Bailey
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Figures published by the Office for National Statistics in December show that the divorce rate for the UK has risen for the first time since 2003. The figures for 2010 show a rise of 5% overall, with divorces most common for couples in their early 40s, and a big rise in the number of over 60s.

Even if one or both of the parties are keen to settle without acrimony, the cost of divorce is a concern for everyone, but there are ways to take charge and to control costs.

The Government took action last year by introducing new rules that require a divorcing couple to consider mediation as a means of resolving their financial and children related issues before they can take their case to Court. The rules do not apply to cases where there has been domestic violence within the last year or where child protection is an issue. Mediation can be a very effective means of resolving a dispute; the participants have total control over the outcome as both have to be happy with any agreement made in mediation; the mediator is there to assist and not to impose an outcome.

Critics of the Government’s increasing emphasis on mediation have accused it of trying to force a “one fits all” solution on the public, saying that people cannot be forced to negotiate and that mediation is not always appropriate. There is certainly some truth in that but mediation does not prevent a participant from having a solicitor to advise them outside of the mediation forum. A collaborative process, where the parties sit down with their solicitors, can also be a very effective solution. Mediation is not yet an obligatory process but anyone commencing Court proceedings must show that they have considered mediation as a means of resolving their dispute. The Court can also adjourn proceedings along the way if it considers mediation is appropriate at a later stage.

For those that do have to ask the Court to resolve their claims, funding is likely to be a concern. The city hedge funds have not been blind to the opportunity presented, following the huge payouts that have been ordered in the UK Courts in divorce cases over the last few years, two hedge fund companies have announced that they are prepared to “invest” in high-end divorce cases in return for a percentage of the money awarded to the client, reportedly as much as 30% in some cases.

At an everyday level, loans are available to middle income clients who do not qualify for legal aid, but who are eligible for a loan as a means of paying for litigation arising from their divorce. While this may seem an attractive option, it does not come without risks and demands careful thought around the “what if” scenario where a loan is taken out but the Court settlement fails to materialise. Good professional advice is vital to assess the risk at the outset.

A worrying factor for couples who divorce later in life is whether each will have enough to live on in old age. With the increasing average age of divorcees, pension funds are likely to be one of the biggest sources of wealth to be divided. Recent research by Sweet & Maxwell, the legal publisher, has shown an 11% rise in the number of Pensions Sharing Orders made by Court in the past year alone. Again advice on the legal and financial implications is essential.

And finally, if you have taken the difficult decision to separate it is essential that you review your Will and any legacies that you want to leave. All too often it is forgotten until the Decree Absolute is received. Any existing Will leaving assets to a spouse will stand until Decree Absolute is pronounced. That may not be what you want. Proper advice should be obtained at an early stage about changing the ownership of your home or any other property owned jointly with your spouse. Such a change will not impact on your entitlement on a divorce settlement but could ensure that your half share of the property can be left by Will to someone other than your spouse should you wish to do so.

Going through a separation or a divorce will always be a very stressful experience. There are many considerations to be borne in mind. It is essential that you access proper specialist advice so your options can be explained to you and objective decisions taken about what is best for you. At Andrew & Co LLP, we have a specialist team of solicitors who can meet with you, discuss your situation and the specific circumstances of your case and advise you as to the best course for you to take.

If you require any further information or wish to arrange a free initial appointment (maximum duration 30 minutes), contact Julie Bailey on 01522 781481 or Sue Leadbeater on 01636 593511.