The most common way for separating couples in Scotland to deal with financial settlement - and often, arrangements for any children - is to reflect the settlement they have reached in a Separation Agreement (also known as a "Minute of Agreement"). This is basically a binding contract between the parties. It's completely separate from divorce, but it does make any subsequent divorce more straightforward.
There are various ways of arriving at the settlement terms which are reflected in a Separation Agreement. The traditional method involves instructing solicitors who will negotiate settlement on behalf of their clients. Sometimes, people manage to agree part or all of the settlement terms directly with each other and then ask their solicitors to give effect to these. This is fine - provided of course that they do this with a clear understanding about what the law entitles them to.Some people will deal with matters by means of the Collaborative Process, or will attend mediation in order to arrive at settlement. We can help you with all of these options.
Proceeding directly to divorce
In a minority of cases it's not possible to negotiate financial settlement, for example if one party is not cooperating, or if a complete impasse is reached. In those circumstances, it's necessary to ask a court to deal with any contentious matters as part of the divorce process.
The court can make a variety of orders, for example, for payment of a capital sum, transfer of property, a pension share, and for spousal maintenance. From an early stage in the proceedings the court can make protective orders preventing assets from being disposed of, and calling on one party to fully disclose their resources.
Divorce in Scotland
Where financial and child related issues have already been resolved, the process of being divorced application tends to be straightforward.
The grounds for divorce in Scotland are:-
- One year's continuous non-cohabitation with the consent of the other party;
- Two year's continuous non-cohabitation (consent is not required);
- Unreasonable behaviour on the part of the other party;
- Adultery on the part of the other party.
Where there are no outstanding financial issues and no children of the marriage under 16, it's possible to be divorced on the basis of Simplified Procedure, either after one year (with the consent of your spouse) or after two years' living apart. Simplified Procedure is cheap, straightforward and involves minimal input from a lawyer.
Otherwise, you need to apply for divorce by a slightly more cumbersome method called Ordinary Procedure. If there are children under 16, the court needs to be satisfied that arrangements have been made which adequately serve their welfare. This is done by producing 2 affidavits (sworn statements) speaking to their welfare.
The rules relating to financial provision on divorce in Scotland
In Scotland, there is a very detailed set of rules for dealing with the issue of financial provision on divorce. These rules, which are contained in the Family Law (Scotland) Act 1985, are designed to ensure fair sharing of the assets (or debts) which have been built up during marriage and which are still in existence at the point of separation. These items are referred to collectively as "matrimonial property".
The first step in the exercise of working out how the matrimonial property should be shared is to identify the date of separation ("the relevant date"). It is then a question of working out what is in the pot for sharing as at that date, and putting figures on these items. Certain assets are not included in the exercise - items owned by one of other party before marriage and items which were received by gift of inheritance from a third party. Once the assets have been identified and valued the next step is to work out how these ought to be shared. The default position in Scots law is equal or 50/50 sharing though there are a number of arguments which are sometimes used to procure a different outcome.
Careful thought needs to be given to how best to deal with certain assets, such as the family home or a pension. Should the house be kept by one or other spouse or should it be sold? If it's going to be sold, should that happen straight away or is sale to be deferred to some future date or event? All of these are possibilities.
Pensions can be very valuable assets. It's possible for these to be "offset" so that one party keeps their pension and effectively trades it off against other assets. Alternatively, it is possible to agree to share a pension in specified proportions, which can be a very useful option.
Maintenance for children
This can be dealt with by means of agreeing on an appropriate figure, which can then be reflected in a Separation Agreement. Most people will negotiate about a suitable level of maintenance having regard to the amount which the Child Maintenance Service would assess.
If agreement can't be reached or if maintenance is not being reliably paid then, where both parents are living in the UK, resort must be had to the Child Maintenance Service which has the power to assess and then collect maintenance.
The courts only have power to deal with child maintenance issues in very limited circumstances, for example, where one of the parties lives outwith the UK or in "top up" cases, where the payer is earning more than the ceiling which the Child Maintenance Service takes into account (currently £156,000).
At the point where parties have separated but have not put in place an overall financial settlement or got divorced, there is a duty on the party who has the wherewithal to do so, to financially support (to a reasonable degree) the other party who is financially dependent.The criteria for assessing whether spousal maintenance is appropriate after a financial settlement has been reached, or after divorce, are quite different. Where possible, Scots law prefers a clean break with no further spousal maintenance being paid after divorce. However, if one party was financially dependent on other during marriage, then it is possible for that party to receive spousal maintenance for up to three years from separation or divorce to assist them to adjust to their new circumstances. In very limited circumstances spousal maintenance may be payable over a longer period, but this is not common in Scotland.
What can I do to assist?
If you find yourself embarking on this process and about to consult a solicitor, it would be very helpful to give thought to the following:
- What are my main objectives in this exercise?
- What would I like to happen with family home?
- What are the main assets and debts that need to be dealt with? It's helpful to list these before you come to any initial meeting.
- Who is paying for what currently? Should that situation continue or should it be altered going forward?
- What is my income and what are my regular outgoings? And those of my spouse?
You can help to limit your costs by focusing on these matters at an early stage.
See also our Divorce infographic
The content of this webpage is for information only and is not intended to be construed as legal advice and should not be treated as a substitute for specific advice. Morton Fraser LLP accepts no responsibility for the content of any third party website to which this webpage refers. Morton Fraser LLP is authorised and regulated by the Financial Conduct Authority.