Q: When in the divorce process or dissolution of a civil partnership should people start talking to an Independent Financial Adviser or Solicitor?Helen: For some people talking to an IFA right at the beginning can be useful. There will be a lot of financial information that will need to be gathered and submitted and having an idea about what will be required and how to find this information can be useful to know from the start. Others might involve an IFA if there is a question about income needs.For others, it may be towards the end when a pension share is being agreed or needs to be implemented or a financial plan for the future needs to be worked out.Richard: It’s as soon as possible really. People seldom come to me seeking a divorce per se.Normally it’s a case of the relationship having broken down, they are uncertain as to the future, and are seeking some certainty, security and assurance. The divorce becomes a means to that end. We’ve got to try and sort things out and reach an agreement over financial matters, and if we can reach an agreement, we can enshrine it in a Court Order as part of the divorce to ensure that it is binding, without anyone having to attend Court. Similarly, if a couple cannot agree a financial settlement, the divorce becomes the means to resolve things, by asking the Court to intervene and decide matters. But coming back to your question, it’s as soon as possible, because people need to start gathering information sooner rather than later, to assist them getting a handle on what the future holds and what the solution may looks like. Q: And so, what do people need to disclose in terms of their finances?Helen: So, both parties will need to be prepared to disclose everything. This includes property, bank accounts, investments, pensions and business assets. Your solicitor will talk to you about what needs to be disclosed. An IFA or your solicitor can give guidance about how to find the information that is needed.Richard: Basically, it’s about equipping people with the information they need so that they can make informed decisions about what is a fair settlement. So, we need to have evidence of all of the figures that go into the matrimonial balance sheet really. Everything from bank statements confirming paper trails on current bank balances to investments, pensions and property valuations. Once we collate all of that information, and sometimes that can raise as many questions as it does provide answers, then we can start to make an informed call as to what the solution is. Q: And as part of the divorce or dissolution part of the process people will need to work out what their current and future expenditure is. Do you have tips on how to do this? Helen: This can actually be quite a difficult part of the process even though it sounds easy as people often haven’t had to analyse their income and expenses in any depth before. There is a useful budgeting tool on the government MoneyHelper website that is free to use and can help you to remember everything that you spend your money on, day-to-day expenditure as well as one-off annual expenditure. This can be a good place to start. However, for some people taking a book out with them and writing down everything they spend money on can be just as helpful. If you have access to bank statements then these are always a good starting point, but do not forget expenses and bills that you don’t currently pay for, but you will need to once you are on your own. There may also be new costs such as life insurance or a mortgage that may be needed for the first time. An IFA can help you think through everything you may need to include in your expenditure.Richard: It is so often about what people need as the starting point really. So, as Helen says, you need to give it some careful consideration and use the tools that are out there to get a handle on what you need. What you need might not be what someone else needs, each family/couple/individual are different, and their needs are different . It’s important to ensure that any list of your needs is comprehensive but without it turning into a wish list, which can be counterproductive. Ultimately, we have to recognize that we will have two households now, funded by a pot, that used to fund one. So, to a certain extent, everyone is going to have to cut their cloth, but it is about making sure that as a starting point, we have a comprehensive and reasonable idea of what we need. Q: So how does someone doing through a divorce or dissolution work out if they can get a mortgage based on their income?Helen: Speaking to a mortgage adviser can help give you the facts and figures that you need, and a good mortgage adviser can also talk you through the different mortgage options that are available to you. At Orchard House (IFAs) Ltd we have a mortgage expert who can help you understand your mortgage capacity once you are on your own and can produce a report that can be...
