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Property Settlement Agreements in Divorce

Since property is generally the most important asset held by a divorcing couple, it is crucial to ensure that an agreement is reached regarding the division of equity and/or proceeds of matrimonial property.

What is a property settlement agreement in divorce?

A property settlement agreement essentially refers to the part of a financial settlement between two divorcing parties concerning any property which needs to be separated between the ex-spouses following divorce.

In most marriages, the property which needs to be divided just consists of the matrimonial home (ie where husband and wife lived during the marriage), but it can sometimes include second homes and investment property which is either jointly or individually owned.

How do you create a property settlement agreement?

There are several stages to creating a property settlement agreement:

  1. Negotiation – the divorcing parties must first discuss the options for dividing up any property which forms part of the matrimonial pot. This can either be done informally or through mediation which involves an independent specialist mediator.
  2. Agreement – once an agreement has been reached, this is generally written down and formalised in a document, with both parties signing it to confirm they agree to the terms. The overall agreement – which is also known as a divorce settlement – will generally include all the other aspects of financial affairs, as well as the property.
  3. Consent order – in order to ensure the settlement is enforceable, it will need to be turned into a consent order (see below).

If the divorcing parties cannot agree to a financial settlement between themselves or by way of mediation, they may need to go to court so that a judge can decide on a fair divorce settlement.

In this case, the court will assume a 50:50 split to start with and then apply principles of fairness considering the particular circumstances. In particular, the court will consider the welfare of any children under 18, and will look at various other factors set out by section 25 of the Matrimonial Causes Act 1973, eg:

  • the income, earning capacity, property and other financial resources which each of the parties to the marriage has or is likely to have in the foreseeable future;
  • the financial needs, obligations and responsibilities which each of the parties to the marriage has or is likely to have in the foreseeable future;
  • the standard of living enjoyed by the family before the breakdown of the marriage; and
  • the age of each party to the marriage and the duration of the marriage.

The decision of the court will result in a divorce order being created, which will include directions on how any property is to be divided.

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What should be included in a property settlement agreement?

The portion of a divorce settlement which deals with property should include express instructions as to how these assets should be divided up between the divorcing parties. Potential ways of splitting up property includes:

  • Selling up – this involves selling any property which forms part of the matrimonial pot and dividing up the proceeds.
  • Buying out – this involves one divorcing party purchasing 100% of the equity in any property, or taking on the full mortgage.
  • Maintenance payments – one party may decide to leave the property to their ex-partner and continue paying their share of the mortgage, either for a certain number of years or until the whole mortgage has been paid off.
  • Transfer of ownership – any property which is mortgage free may be transferred between the parties as part of the overall financial settlement.

Can I use a sample property settlement agreement template or form?

Because each divorce comes with its own individual circumstances, using a template divorce agreement form is normally inadvisable.

Instead, specialist divorce lawyers should be instructed to draft a bespoke settlement agreement, which takes into account the particular situation regarding property and other assets.

We offer a range of financial agreement services to suit your needs and budget without compromising on the service you receive, all of which are drafted by our highly qualified family law solicitors.

What’s the difference between a property settlement agreement and a consent order?

As discussed above, a property settlement agreement forms part of the overall financial settlement. On its own, a financial settlement just outlines the terms of the agreement between the divorcing parties; it is not legally enforceable and does not provide a clean break (although it can be used as evidence in court).

A consent order essentially provides legal standing to the financial settlement, which means that any agreement regarding property and other assets can be enforced in the courts.

A consent order also prevents one party from making financial claims on their former spouse at some point in the future, providing a clean break.

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Legal Advice Consultation - £99 Service

Speak to our family law solicitors to receive professional legal advice to understand your legal position and where you stand in relation to a financial split.

  • Legal advice is given on your legal position
  • 1-hour telephone call with your solicitor
  • Instantly schedule a call in with your solicitor
  • One low-cost fixed-fee payment of £99
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Financial Agreement Consultation Service - £199

Having a qualified family law solicitor review your financial agreement and provide a full consultation on it will ensure that you are receiving a fair settlement.

  • Legal advice is given on your legal position
  • Free 30-minute telephone call with your solicitor
  • Tailored, detailed written report based on your agreement
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Which assets do you need to split as part of your financial agreement? Select options below.
Division/sale of a property
Division/sale of 2 or more properties
Division/split of pensions
Child maintenance agreement
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Division of joint debt(s)
Division of savings
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Detailed Consent Order - £399

This service is ideal for couples that want to put their financial split into a legally binding financial order, to ensure no claims by either party can be made in the future.

This service can include any/all of the following;

  • Division of pensions
  • Property portfolios
  • Divison of business assets
  • Sale or transfer of property
  • Personal belongings
  • Lump sum payments
  • Child/spousal maintenance

Why you should choose this service...

  • You'll save over £1,000 compared to hiring high-street solicitors.

  • Everything is completed online, no time off work or court appearance necessary.

  • Drafted by qualified family law solicitors.

  • We handle everything for you, from start-to-finish including dealing with the courts.
Complete Our Secure Online Checkout To Get Started - £399

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Managed Consent Order Service - £299

This service is ideal for couples that want to put their financial split into a legally binding financial order, to ensure no claims by either party can be made in the future.

This service can include any/all of the following;

  • The sale or transfer of a property
  • Personal belongings
  • Child/spousal maintenance
  • Lump sum payments
  • Debt provision

Why you should choose this service...

  • You'll save over £1,000 compared to hiring high-street solicitors to carry out the same service.

  • Everything is completed online, no time off work or court appearance necessary.

  • Drafted by qualified family law solicitors.

  • We handle everything for you, from start-to-finish including dealing with the courts.
Complete Our Secure Online Checkout To Get Started - £299

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