Divorce is easier – and can be cheaper

A wave of divorces is expected in the coming months as people argue over money issues – and divorce is getting easier thanks to a new ‘no-fault’ law.

Couples in England and Wales can now divorce on the grounds of irretrievable breakdown of their marriage – without having to blame it. Before April, adultery, unreasonable behavior or desertion had to be given as the reason – or living apart for two years by mutual agreement, five years if one partner didn’t want the other to go.

In Scotland and Northern Ireland, the grounds for divorce remain the same as before in England and Wales. But in Scotland, a divorce petition can be filed after one year of living apart with consent, two years without. In Northern Ireland it is two years with permission, five years without.

The Law Society of England and Wales says: ‘By replacing divorce grounds previously assigned to guilt, you deprive yourself of a potentially hostile environment that can lead to lengthy and costly litigation. By reducing the elements for such a conflict, you enable couples to focus more on the important things like children, property and finances.’

There is still £593 to be paid for filing for divorce. Previously, the added cost of lawyer fees meant that the average cost of a divorce was around £14,500, according to consumer website Money Helper.

While divorcing couples won’t have to spend more than the filing fee, there will still be additional costs if an attorney is hired to help divide assets, such as real estate and pensions. With lawyers’ fees starting at £200 an hour, it’s worth trying to divide the estate amicably, leaving more money to divide.

For those who have drafted a divorce agreement, but still want a lawyer to look into it, can use an online no-fault divorce service, which costs £180.

A court usually considers a 50:50 split for a long-term marriage of more than five years, as set forth in the Matrimonial Matters Act of 1973. This includes property, pensions, savings, and any child support. Real estate is usually the largest asset, so if one partner wants to stay in the family home, they will have to part with other assets, such as pensions and savings.

Emma Watson, head of financial planning at wealth management firm Rathbone Investment Management, says: ‘Pensions are a crucial consideration in divorce – especially if one partner has taken a career break to care for the children and support a partner’s career.’ She points to a “pension distribution order” as a popular option. This allows for a clean break – with pensions divided into two separate pension plans.

Dividing the pension funds before retirement allows both partners to be in charge of their own money and decide how it will be withdrawn at retirement. This involves court costs of approximately € 2,000.

Another possibility is a ‘garnishment of pension’. With this, a percentage of someone’s future pension income – or fund value – is earmarked for the other partner at retirement. This also entails court costs. It is less popular than a pension split order because it does not prevent the pension saver from stopping contributions and saving money elsewhere. When they die, the pension often ends too.

Finally, there is the ‘pension settlement’. This is when a person keeps their entire retirement pot and exchanges it for the value of other assets, such as the home. This deal can be turned down without the need for a court order.

There are tax implications to consider. For example, a transfer of property between married couples is exempt from potential capital gains tax and estate tax, but not if they are officially divorced.

To help you sort through the finances, an independent financial advisor can be helpful.

Even though divorce is now easier — and hopefully less expensive — it still takes at least six months from when someone files for divorce until it becomes official. The latest Justice Department statistics indicate that divorce rates have reached their highest level in a decade. In the three months to the end of June of this year, there were more than 33,000 divorce applications. These were the first numbers to be published since the no-fault law was introduced and represented an 11 percent increase over the previous three months.

About one in three marriages end in divorce. But overall, the rate has been steadily declining since peaking at 44 percent in 1987. Harry Benson, director of research for the charitable Marriage Foundation, says, “Once lawyers get involved in a divorce, it’s game over — it’s going to cost you dearly.” to stand. Getting away from the idea that one person is to blame for a marriage breakdown is common sense and can help you avoid a bitter and costly divorce.”