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John & Emma: Divorce and the family finances
John (42) and Emma (40) have been married for 14 years and they have two children together; Ruby who is 10 years old and Lucas who is 7 years old. They live in a 3 bedroom house in Kent. John works full time as an IT Consultant and Emma works part-time as a senior sales assistant, which fits around the children’s school hours.
Over the last few years, John and Emma have grown apart. John recently moved out of the family home and has told Emma that he now wants a divorce. Emma has reluctantly agreed to divorce, but she is very concerned about how she and the children will manage financially. What does Emma need to consider?
John could file a petition for divorce on the basis that the marriage has irretrievably broken down. To prove this he will have to show one of five facts: adultery, unreasonable behaviour, two years separation with Emma’s consent, five years separation without consent, or desertion. John could issue the petition now based on ‘unreasonable behaviour’ by Emma and he would have to give examples of this behaviour. This could be difficult for Emma to accept but they could agree the wording of the petition before it is issued. It is difficult and expensive to contest a divorce petition once issued at court.
Once the petition is issued, Emma will be served with a copy and she will need to file a form at court called an Acknowledgment of Service. The court will firstly pronounce a Decree Nisi (interim decree of divorce) and six weeks later John can apply for the Decree Absolute (final decree of divorce). The Decree Absolute is often delayed until after an agreement has been reached about the finances.
2. Family finances:
The family finances are dealt with separately to the divorce process itself. John and Emma should undertake full financial disclosure to determine the true value of all the matrimonial assets. The starting point is an equal division of all the assets and then various factors must be considered to determine what would be a fair settlement. In summary, Emma may want to consider the following:
a) Capital and housing needs:
The court will want to make sure that the children are securely and adequately housed. Emma should consider how much capital there is (including savings and investments), her housing needs, her mortgage capacity and how much equity is in the family home. John may also need some capital to rehouse himself.
Emma may need some spousal maintenance (monthly income) from her husband to supplement her income so she can support herself and maintain the family home. Emma should also consider whether she can increase her hours at work to increase her income.
c) Child maintenance:
John has a liability to pay to Emma child maintenance for both children. The amount will depend on his income but it is likely that he will be required to pay 20% of his net income. If John has the children to stay with him overnight for more than 52 nights per year, the child maintenance he pays will be reduced.
Emma should consider whether John has any pensions, their value and the value of her own pensions.
3. Next steps:
Emma should contact a family law solicitor who can provide her with legal advice about her options for the divorce and the finances.