Financial Provision on Divorce
Court orders on financial provision
Under the Family Law (Scotland) Act 1985, there are multiple orders a court can make regarding the financial relationship between the divorcing couple. These orders range from capital sums to transfers of property or pensions. The orders a court can make under the act include:
- a lump sum from one party to another, known as a capital sum,
- ongoing maintenance payments from one party to another, this can be for a fixed term,
- a transfer of property between parties,
- a pension sharing order, or a pension lump sum order, also known as an earmarking order,
- a pension compensation sharing order, or an order for payment of a capital sum from pension compensation,
- an incidental order.
The court can order a financial settlement, either with agreement from the couple or after a hearing. It can also be decided that it would be beneficial for the parties to have a 'clean break' in their financial relationship, either immediately or after a capital sum payment.
How the court reaches its decision
Along with setting out what orders the court can make, the Family Law (Scotland) Act also outlines the principles that the court must consider. Overall, the guiding principle for the court is fairness between the parties, with considerations being made for both parties' financial positions and the impact the decision will have on this.
Children and financial provision
Under the Family Law Act, the court must aim for the economic burden of caring for children to be fairly split between the parties. As with all decisions made by the court on this matter, it will depend on the individual's financial position and the impact other orders being made will have.
Family business separation
If the business was set up or acquired after you were married, the business would likely be considered matrimonial property. If the business was set up or acquired before the marriage, the rules could become more complicated. Although the business itself may not be matrimonial property, any increase in its value could be seen as such.
Courts often aim to leave the business with the business owner if that is one individual party. However, compensation might be made to the other spouse, with them receiving maintenance payments or a higher share of the assets.
Valuing a business
If the business is owned fully by one or both of the parties, or there is a significant shareholder in a business, it will be valued. This can be complex depending on who owns the business, and if there are other owners or shareholders to consider, so it is always best to speak with your legal team about the process.
When a business is valued, its assets, earnings and structure will all be considered. This includes property owned, stock and the expected profit it will make in the future.
Contact our Divorce Solicitors Glasgow, Aberdeen and Falkirk
At Kee Solicitors, we understand how challenging going through a divorce can be for you and your family. Our team will work with you to find the best solution for your situation.