Mediation – Financial issues
The first step to successfully mediating financial issues is to establish a complete and accurate picture of the whole situation. In divorce the law requires that any financial settlement is based on a full and frank disclosure of all relevant financial information. For unmarried couples it may also be worth adopting a similar approach as the foundation of any settlement.
Financial disclosure requires you to list all assets, liabilities, income and expenditure. We have forms available to help with this process. You need to establish an approximate date to which the financial information relates.
Assets may be jointly or individually owned, but if you are married they are considered to be assets of the marriage until such time as you divorce, or enter into a legally binding separation. In mediation we discuss what assets are to be included in the disclosure – normally anything worth £500 or more, and how these are to be valued.
Land and Property
For many the family home is the main asset. Most people are willing to rely on three estate agents’ valuations as the basis for an agreed value, against which sale costs and any outstanding mortgage liability will need to be deducted to arrive at a figure for the equity which might be available for distribution. All properties owned will need to be valued and assessed ready for the division of assets.
Pensions are often valuable assets. The person in whose name the pension is, needs to obtain from the pension provider, the Cash Equivalent Value (CEV) of the pension. Pension providers must provide this information in writing, if requested for the purpose of a divorce settlement. Sometimes they can be slow to do this; you may need to wait up to three months for your pension CEV. It is not necessarily included in the annual statements typically issued by pension providers.
The CEV is not an entirely satisfactory measure of a pension’s value. Unlike other assets the value of a pension is not immediately realisable, it depends on survival and is taxable. You will have to give some thought to pensions (Pensions on Divorce on our website). In some circumstances it may be worth obtaining an actuary’s report on the value of the pension. But the first step will always be obtaining an up-to-date CEV.