Financial mediation after separation or divorce

Contents 13 sections

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Financial mediation helps separating or divorcing couples work through money, property and future financial arrangements without asking a judge to make every decision for them.

The process is structured. Financial disclosure comes before settlement proposals. Once each person has a clear picture of the finances, the discussion can move to the options for the home, pensions, savings, debts, income and other assets.

Do not start with “who gets what?”

Money discussions often become stuck because each person is arguing about the outcome before there is a shared picture of the facts.

Financial mediation starts somewhere more basic: what property exists, what is owed, what pensions there are, what income each person has and what information is still missing.

Only after that information has been exchanged and clarified does it make sense to work on proposals.

What financial mediation can cover

The family home

You may need to consider sale, transfer, a buy-out, timing, mortgage capacity, equity and future housing needs. More on the family home.

Pensions

Pensions can be significant assets. The right information needs to be available and specialist pension or legal advice may be needed in some cases. More on pensions.

Savings and investments

Bank savings, investments, ISAs, shares and other assets need to be identified as part of the financial picture.

Debts

Loans, credit cards, tax liabilities, mortgages and other liabilities need to be included. A proposal that deals only with assets but ignores debt is not a complete financial plan.

Income and maintenance

The discussion can include current income, future budgets, child maintenance and spousal maintenance where relevant. Some issues may require independent legal or specialist advice.

Business interests and more complex assets

Where one or each person owns a business, has overseas property, trusts or other complex assets, additional valuation, tax or legal advice may be needed. Hybrid mediation can bring that specialist into the process rather than pausing the mediation each time a question arises alongside mediation.

How financial mediation works here

Financial mediation has stages, and they run in an order. We do not begin by asking you to decide who should get what before there is a reliable picture of the finances.

Your individual MIAMs

Each person begins with their own private MIAM. Yours may be about finances, children or both. It is where we understand the background, what you are hoping to resolve, and whether mediation is suitable at all.

If both of you want to continue, we can move into the financial process.

The first joint financial meeting

The first joint meeting is broader than a settlement meeting. We want to understand the situation as each of you sees it: the home, income, pensions, debts, the children where relevant, what has happened since you separated and the main decisions that need making.

You may already have ideas about how it should end up. We can hear those. But the aim at this stage is not to reach a settlement before the financial information exists.

Financial disclosure

After that meeting we send each of you our financial disclosure form and explain which supporting documents are needed.

It is a mediation disclosure process. It covers much of the financial information that would also matter in court proceedings, but it is not the court’s Form E. Depending on your circumstances it can include property and mortgages, savings, investments, pensions, income, businesses, debts, expenditure, inheritance and other relevant resources. How disclosure works.

Questions and missing information

Disclosure is rarely complete the first time. A current property valuation may be needed. A pension statement may be missing. A transfer may need explaining, or mortgage figures may need updating.

Each person should have the opportunity to ask reasonable questions about the other person’s disclosure and to ask for further information where it is needed. The aim is to get both of you working from substantially the same factual picture.

Financial disclosure is open information

The Family Mediation Council’s Code of Practice requires factual information material to financial issues to be provided on an open basis. This means the financial facts are not treated as private settlement proposals that disappear if mediation ends.

Once the information has been exchanged and clarified, we can prepare the Open Financial Statement. It records the financial facts used in the mediation: what property exists, the mortgages, savings, investments, pensions, income, liabilities and anything else relevant.

It does not decide how those assets should be divided. The word open is the point: factual information given on an open basis can be used outside the confidential settlement discussions if legal proceedings later become necessary, and it lets each of you take advice on the same financial picture. What the Open Financial Statement is.

Advice, where it helps

There are usually points where outside advice is worth having: legal advice, mortgage advice, tax advice, a property valuation or specialist pension advice.

Some pension cases benefit from a Pension on Divorce Expert. Not every case needs one. Mediation does not replace those professionals; it is the place where their information and the options can be worked through together.

Settlement meetings

Once disclosure is sufficiently complete, the question changes from what is there? to how could this work?

If the home may be sold, that discussion covers timing, estate agents, who pays the mortgage in the meantime and what happens until completion. If one of you hopes to keep the home, it covers mortgage capacity, any payment to the other person and a realistic timeframe.

Pensions, savings, debts, maintenance, businesses and other assets are considered as part of the overall picture. There may be more than one possible proposal before you reach something you both consider workable.

The written outcome

If you reach proposals you both want to take forward, we can prepare a Memorandum of Understanding.

The difference between the two documents is simple. The Open Financial Statement records the financial facts. The memorandum records the proposals reached in mediation, and can also record the practical steps and timescales needed to put them into effect.

It is not itself a financial court order. What the memorandum is.

Legal advice and a consent order

Each person should have the opportunity to take independent legal advice before finalising a financial settlement.

If the proposals are to become legally binding, a solicitor or other suitably qualified legal professional can use the mediation outcome to prepare the consent-order documents. The court then considers the proposed financial order, and may ask for financial information including a Statement of Information on Form D81. Proposals do not become binding simply because a memorandum has been signed. Consent orders after mediation.

Our role will normally conclude when the mediation has finished and the agreed mediation documents have been prepared.

If financial information is missing

Mediation cannot sensibly move to final proposals on guesswork. Where one person was kept away from the family finances, that is not only a disclosure problem, and domestic abuse and mediation covers economic control.

If information is incomplete, we can identify the missing items and allow time for questions and documents to be provided. A mediator cannot compel anybody to disclose. Where someone will not provide what is needed for meaningful financial mediation, the process may have to pause or end. If someone will not disclose.

1. Before anything joint

   Individual MIAMs

   Each of you meets the mediator separately and privately. Yours may be about finances, children or both.

   What happens at a MIAM →

2. Understanding what there is

   The first joint financial meeting

   Broader than a settlement meeting: the home, income, pensions, debts, what has happened since you separated and what actually needs deciding. You may already have ideas about the outcome, and we can hear them, but this is not where they get settled.

3. Financial disclosure

   We send each of you our disclosure form and explain which documents go with it. It is a mediation process, not the court’s Form E, though it covers much of the same ground.

   What disclosure involves →

4. Questions and clarification

   Disclosure is rarely complete first time. A valuation may be needed, a pension statement may be missing, a transfer may need explaining. Each of you can ask reasonable questions about the other’s figures.

5. The picture, written down

   The Open Financial Statement

   Once the information is in and clarified, we prepare the OFS: the property, mortgages, savings, pensions, income and liabilities as they actually are. It records the facts. It does not decide how anything is divided.

   What the statement is →

6. Advice, where it helps

   Legal, mortgage, tax, a valuation, or specialist pension advice. Some pension cases benefit from a Pension on Divorce Expert; not every case needs one. This can happen at any point from here on rather than only once.

7. Deciding

   Settlement meetings

   The question changes from what is there to how could this work. If the house may be sold: timing, agents, who pays the mortgage meanwhile. If one of you hopes to keep it: mortgage capacity, any payment to the other, and a realistic timeframe.

8. Have you reached proposals you both want to take forward?
   Yes

   We prepare the Memorandum of Understanding

   The proposals, recorded, with the practical steps and timescales needed to put them into effect. The OFS records the facts; the memorandum records what you decided. Neither is a court order.

   What the memorandum is →

   No

   Mediation can end without agreement

   That is a proper outcome, not a failure. What was disclosed was given openly and remains available. If you decide to apply to court for a financial order, that application is a Form A.

   Form A and mediation →

9. Making it binding, if you want that

   Independent legal advice

   Each of you should have the chance to take your own legal advice on the proposals before anything is finalised. The mediator is not anybody’s solicitor.

10. Do you want the proposals made legally binding?
    No

    The mediation is complete

    The documents stand as the record of what you agreed. They are not enforceable on their own.

    Yes

    A solicitor prepares a consent order

    A solicitor or other suitably qualified legal professional uses the mediation outcome to draft the consent-order documents, and the court considers whether to approve them. It does not become binding because a memorandum has been signed.

    Consent orders after mediation →

Sources and further reading

• FMC Code of Practice – general principles
• FMC Code of Practice – conduct of mediation
• GOV.UK – money and property when a relationship ends: mediation
• GOV.UK – Form D81, statement of information for a consent order
• GOV.UK – Form A, notice of intention to proceed with a financial order
• Practice Direction 9A – financial remedies and consent orders
• Family Justice Council – pensions on divorce