Ten steps to re­duce the pain of di­vorce Jan­uary sees a surge in di­vorce in­quiries, says TRICIA PHILLIPS

Nottingham Post - - YOUR MONEY -

SADLY, de­spite di­vorce rates dip­ping from their peak in 1993, more than two in five mar­riages still break down, af­ter an av­er­age of 12 years. It’s a stress­ful and emo­tional time go­ing through the break­down of a mar­riage and cou­ples can eas­ily rush into things, end up with a poor fi­nan­cial deal and pay huge sums to lawyers.

Sarah Coles, per­sonal fi­nance an­a­lyst at in­vest­ment firm Har­g­reaves Lans­down, says: “A fes­tive com­bi­na­tion of al­co­hol, money pres­sures and spend­ing time to­gether can be the fi­nal straw when your mar­riage is in trou­ble – es­pe­cially when you have been hang­ing on be­cause you didn’t want to ruin Christ­mas for the kids.

“So, un­sur­pris­ingly, once ev­ery­one is back to work and school, di­vorce lawyers can ex­pect the phones to start ring­ing.”

Di­vorce is usu­ally hor­ri­bly ex­pen­sive, but you don’t have to stay in an un­happy re­la­tion­ship be­cause you’re afraid of the costs you might in­cur.

If you know the fi­nan­cial risks, and take steps to avoid them, do­ing so can help keep costs to a min­i­mum.

Here, Sarah shares her 10 tips on com­mon fi­nan­cial mis­takes – and how to avoid them:

GO­ING STRAIGHT TO COURT

IF YOU can agree ev­ery­thing be­tween you, a so­lic­i­tor can draw up the doc­u­ments for £500-£1,000, plus court fees of around £500.

If you fall out and start swap­ping so­lic­i­tors’ let­ters you’ll eas­ily run up £4,000 to £5,000 of costs. If you go through the en­tire court process, you can spend £10,000 – and plenty of peo­ple end up spend­ing more than dou­ble that.

EX­PECT­ING TOO MUCH

EX­PECT too much and you won’t be will­ing to ac­cept a com­pro­mise, so you’re more likely to end up in court.

Of course, once you get to court, the fi­nal de­ci­sion will be up to a judge, who may dis­agree with your idea of what’s fair, and give you far less than you were of­fered when you started.

DIY DI­VORCE WITH­OUT GUID­ANCE

IF YOU don’t own very much be­tween you, there are no chil­dren, and you are on good terms, do­ing it your­self can save a for­tune. You can draw up the forms, or get a low-cost le­gal ser­vice to do it for un­der £100 (plus about £500 in court fees).

How­ever, you won’t get any ad­vice, so if there are pen­sions, a prop­erty, sig­nif­i­cant sav­ings and in­vest­ments or chil­dren to con­sider, there’s a real risk of mak­ing an ex­pen­sive mis­take.

FIXATING ON KEEP­ING THE HOUSE

IT CAN be hard to face the idea of down­siz­ing or mov­ing some­where cheaper, but you need to be con­fi­dent you can af­ford the mort­gage, bills and main­te­nance.

Don’t for­get, you’ll also have to re­build things like pen­sions and sav­ings that you may have to give up in or­der to keep your home.

NE­GLECT­ING THE PEN­SION

WHEN your spouse has been build­ing up a pen­sion for years, it could be worth as much as your fam­ily home, so don’t give up a share of it lightly.

It’s not al­ways easy to tell what a pen­sion is worth, but you should get a pen­sion val­u­a­tion as part of the fi­nan­cial dis­clo­sure, so if you don’t have one, ask for it.

If your part­ner has a big pen­sion, it may be worth pay­ing a fi­nan­cial ad­viser or ac­coun­tant to check the num­bers.

SPLITING PEN­SIONS WITH­OUT HELP

THERE are three ways to split it: one per­son can keep it and trade it Split de­ci­sions: against other things you both hold; you can split the pen­sion pot into two to­day; or you can agree to share it when it’s be­ing paid out.

The right an­swer de­pends on your cir­cum­stances.

If, for ex­am­ple, you’re much younger than your part­ner and choose to split the in­come, pay­ments may stop when they die – leav­ing you pen­sion­less.

It can all get a bit com­pli­cated, so if one of you has a de­cent pen­sion, it may be worth pay­ing for ad­vice.

TRY­ING TO HIDE THINGS

IF YOU don’t give your so­lic­i­tor the full pic­ture, you’ll waste a lot of time and money. If you lie to your ex about as­sets, you risk end­ing back in the di­vorce court – even af­ter the deal is fi­nalised – go­ing through the whole ex­pen­sive process again.

FAIL­ING TO CUT TIES

DUR­ING the process, any joint fi­nan­cial prod­ucts will be frozen, and when you come to an agree­ment they will be closed. How­ever, you may still need to cut ties on your credit record – to stop your ex from in­flu­enc­ing your abil­ity to bor­row.

You’ll need to con­tact Equifax. co.uk, Ex­pe­rian.co.uk and Tran­sunion.co.uk (for­merly Call­credit) and com­plete a no­tice of dis­so­ci­a­tion.

NOT FI­NAL­IS­ING THINGS

IT’S WORTH pay­ing for an ad­di­tional con­sent or­der, which stops ei­ther of you com­ing back for more af­ter the mar­riage ends. In 2010 a lottery win­ner ended up giv­ing his ex-wife mil­lions of pounds from his win, de­spite the fact they had split up 10 years ear­lier. A con­sent or­der pro­tects you both from this sort of claim.

RE­LAX­ING WHEN IT’S OVER

If you lie about your as­sets you risk end­ing up back in court do­ing the whole ex­pen­sive thing again...

YOU need to start re­build­ing as soon as you can – in­clud­ing pay­ing into an emer­gency sav­ings safety net and restor­ing your pen­sion. Don’t for­get in­sur­ance too.

If you’re re­ly­ing on main­te­nance pay­ments, you need to in­sure the life of the per­son pay­ing them to pro­tect your fam­ily.

Act­ing rashly when a mar­riage breaks down can leave you in fi­nan­cial dif­fi­culty

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