If you are going through a divorce or separation, you are probably having to make arrangements for your finances, and we know how difficult that can be. You will likely be overwhelmed with advice from well-meaning family and friends – as well as the information you may have seen when you have been ‘Googling’ “how to deal with your finances?”. Which way will you turn?
Family Matters can help. We can help you to reach a fair settlement that means you think about the future financial needs of any children and each person in the relationship. Here we set out the stages that financial mediation would normally follow.
Stage 1. MIAM – mediation information and assessment meeting
The government believes that mediation is a cost-effective and constructive way for separating couples to discuss and agree arrangements for children and finances. To support this, the Ministry of Justice said that anyone who wants to apply to court for an order about arrangements for their finances or their children must attend a mediation information and assessment meeting (MIAM). A MIAM is for you to get information about how mediation can work for you. You can attend MIAMs separately or together and the meeting can be held online or face to face in one of our offices. The MIAM usually takes about one hour and at the end, the mediator will talk about the next steps, whether that is coming to a mediation meeting or going through the court process.
Many people use mediation to agree financial arrangements with each other before they get a divorce, dissolve a civil partnership or separate. They realise mediation means they keep control of decisions that are made about their future, and it is usually cheaper and quicker than going through the courts. If you go to court without having agreed financial matters, a judge will make those arrangements for you.
Stage 2. Financial disclosure in mediation
Once you have decided to work out your financial arrangements through mediation, you will need a complete picture of your financial circumstances so that decisions can be made about how your finances can be shared. Both people will need to share documents relating to income, expenditure and the things you both own, such as bank accounts, credit cards, property and pensions. This is called financial disclosure. It has to be done, whether you use mediation to sort out your financial issues or not. A court will need to know that full financial disclosure has been shared before it will agree to any arrangements. Think of the documents as supporting your decisions and helping to explain the reasons why they have been made.
Financial disclosure usually takes between two and four mediation meetings, depending on the complexity of your finances.
Stage 3. Form E
This is the standard form in which all your financial information is brought together. It is accepted by solicitors and the court. Family Matters’ disclosure process has two stages:
- Step 1 – a form will be sent to you after your MIAM called “First Steps in Financial Disclosures”. This helps you to think about and identify the things you will be talking about in the first mediation. It must be sent to Family Matters before the first mediation meeting. Don’t worry if you don’t have everything. It will help the mediator to prepare before you meet.
To help ensure that you get the best out of your time with your mediator and to reduce cost, your mediator will start to put together a picture of your finances before your meeting. This will help to support you both in your decision-making. This is known as a statement of financial information and the document will be updated as you go along.
- Step 2 – after your first meeting, the mediator will send each person their own financial mediation pack, which will include a list of all the documents that you need for financial disclosure and to complete Form E. This might include:
- Property valuations
- Bank statements
- Credit card and other debt statements
- Mortgage statements
- Savings statements
- Income and benefits statements
- Investment valuations
- Business valuations and accounts if appropriate
- Life insurance policies
- Pension CETVs (cash equivalent transfer value)
- State pension forecast
- Information about other assets
Once you have both shared all your financial information and your mediator has checked that you both accept it, you will agree your financial disclosure. If you want to move forward to reach a financial settlement, this must be done. If not, a court will order financial disclosure, which is likely to increase your costs.
The financial disclosures must be shared by each person and your mediator will record which information has been exchanged, what has not been exchanged and any reasons why this has not taken place.
Stage 4. Discussions about financial needs
If you have decided to use mediation after your MIAM to continue agreeing your financial arrangements, you will both need to think about financial needs for the future and these will be discussed in the mediation with your mediator.
When the court is making a decision, it will take a number of things into account. It helps if you know about this before you come to mediation. The things the court might consider include:
- The length of your marriage or civil partnership
- Any children, their ages and where they will live
- Accommodation needs
- Income, pension, benefits
- Current lifestyle of both people
- Your age and when you might retire
- Earning capacity
- Mortgage capacity
Once this has been discussed and full financial disclosure shared, a mediator will help you to think about and agree how the assets can be shared in a way that meets the needs of the children first and each person in their separate lives.
When helping you to agree what your financial settlement should be, your mediator will help you to think about what is fair and equal. Everyone coming into mediation has a different idea about what fair means. Whilst the starting point is usually a 50/50 division of the joint assets – this is not a rule, and a different division might be needed in different circumstances. Every couple’s situation is different, so each will need a different arrangement.
To find out more you can read the Family Justice Council’s guidance on sorting out finances on divorce.
Stage 5. Coming to an agreement
Mediators cannot advise you but can provide information that is relevant to the decisions you need to make when coming to a financial arrangement so that a court can approve it. Our mediators are impartial and will not take sides. We are here to facilitate your discussions and support you in coming to an agreement.
When you have agreed a way forward, mediators prepare a memorandum of understanding. This is the document that sets out your decisions and the reasons why these decisions have been made. This is supported by the open financial schedule, which is the document that sets out the financial assets and liabilities of the relationship. Mediators will make sure that you have discussed wills and maintenance – whether that is child or spousal.
Stage 6. Making it legal
The arrangements you reach in mediation are not legally binding, they are the template of your agreement which a solicitor can use to write up into a consent order that will be approved by the court. This saves you time and money. A court order is needed to make your agreement legally binding and to ensure that a financial claim cannot be reopened in the future.
This doesn’t mean that you cannot immediately act on what you have agreed, but it is preferable that the documents produced by the mediator are taken to a solicitor, who will give you legal advice and draw up a consent order which is then made legally binding by the court through the making of an agreed court order.
What happens if you don’t reach agreement about finances in mediation?
Sometimes, the mediation process just isn’t appropriate, or it may be that there are particular finances that cannot be agreed. This means that the court will have to deal with your finances, so you may need to use a solicitor to help with your financial negotiations. An application via Form A will need to be made. You will need proof that you have attended a MIAM before Form A is completed (unless you are exempt from attending). Family Matters will provide you with a certificate to say that you have attended. Form A is complex, and you may need help from your solicitor to complete it. You can also get help from your local Citizens’ Advice Bureau.
To make an appointment for a MIAM or mediation, contact us now. We can arrange meetings face to face or remotely.
Author: Juliette Dalrymple, managing director and mediator.
