Divorce can be a challenging and emotional time, with a lot to think about. One of the most significant aspects of the process is sorting out your finances. But where do you start? Understanding the financial disclosure process is crucial in ensuring a fair settlement, and in the UK, this often involves completing a Form E.
This blog will guide you through the key steps to prepare for a meeting with your solicitor, helping you gather the necessary financial information efficiently.
What is Form E and Why is it Important?
Form E is a comprehensive financial statement required in divorce proceedings in the UK. It is used to disclose all assets, liabilities, income, and expenses. Whether you are negotiating directly, attending mediation, or going to court, Form E plays a vital role in reaching a financial settlement.
Why Should You Prepare in Advance?
While your solicitor will provide a blank Form E and a checklist, preparing the necessary documents in advance can save you time and money. Certain documents, such as pension valuations, can take weeks or even months to obtain, potentially delaying the entire process.
What Should You Prepare for Your Solicitor?
1. Pensions: How to Get Your Cash Equivalent Transfer Value (CETV)
Pensions are often the most time-consuming financial documents to obtain, especially public sector pensions like those in the NHS, which can take months. To avoid delays, request your CETV from your employer as soon as possible.
- Request CETVs for all pensions: You will need to contact each pension provider to obtain a CETV for every pension you have.
- Track down lost pensions: If you’re unsure how many pensions you have, visit the HMRC or the Government Pension Tracing Scheme website to locate any previous pensions. Your previous employers may also help identify which companies hold your pensions.
2. Property: What Do You Need to Disclose?
When completing Form E, it’s essential to disclose all properties you own, whether jointly or solely, including land and buildings.
- Valuation of the family home: Obtain a valuation from a local estate agent.
- Mortgage redemption statement: Provide a statement detailing the current mortgage liability and any early repayment penalties.
- Estimate sale costs: The form will require an estimate of the sale costs, typically around 2% of the property’s value.
- Ownership status: Most couples own property as ‘beneficial joint tenants,’ meaning a 50% share each. However, note that the final settlement may differ from this starting point.
3. Bank Accounts: Which Statements Are Required?
You need to provide 12 months’ worth of bank statements for every account you hold or have a beneficial interest in.
- Include all accounts: This includes current, savings, and joint accounts.
- Investment statements: You must also provide statements for any investments, such as ISAs, shares, and premium bonds. It’s helpful to gather these documents from your bank or online banking.
4. Income: What Documentation Do You Need?
Form E requires you to disclose all sources of income, which includes employment earnings, benefits, dividends, rental income, and more.
- Wage slips and P60: Provide your last three months’ wage slips and the most recent P60.
- Other income sources: Include documentary evidence for all other income streams.
- Income anomalies: Detail any irregularities, such as a one-off bonus that may not be repeated. You’ll need to estimate your net income for the next 12 months, considering all potential changes.
5. Valuation Evidence: What Personal Belongings Need to Be Valued?
You must provide valuation evidence for personal belongings worth over £500.
- High-value items: This includes jewellery, watches, artwork, antiques, and significant furniture or house contents.
- Vehicles: Provide valuations for any vehicles you have an interest in. An easy way to do this is by using instant valuation websites like ‘We Buy Any Car’ and submitting a screenshot or email of the valuation as part of your financial disclosure.
Why is Timely Preparation Crucial?
While this blog outlines the primary documents you need to gather, it doesn’t cover everything required for Form E. The financial aspect of a divorce can be lengthy, but by preparing early, you can avoid unnecessary delays and additional costs.
Conclusion
Divorce is never easy, but understanding the financial disclosure process can help ease the burden. By following these steps and preparing your documents early, you can ensure a smoother and more efficient path towards a fair settlement. If you’re ever in doubt, your solicitor is there to guide you through every step of the process.
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