IWD: Women and finances on divorce – show me the money

I meet people of all ages and stages of life going through separation and their knowledge and participation in respect of the family's finances varies greatly.  In my experience, in a long marriage where the wife has stopped working to have children and the husband is the main or sole earner, this impacts on the roles each take on during the marriage.  It is not uncommon for the wife, in doing the school run, meeting teachers and school friends and spending more time in the home, to manage the lion's share of the practical arrangements for the children. For his part, the husband may instead manage the financial arrangements including the payment of bills, significant purchases and making investment decisions. This is not necessarily because he is any better at this but because such arrangements are closely linked to his role as 'breadwinner' and these roles develop naturally over time. 

It is certainly not true, however, to say that all women happily (or unhappily) give up all financial responsibility and independence when they start a relationship.  We are part of a generation of working women who value both their careers and having a family.  Many of the women I meet earn equal to or more than their partners, have cash of their own and do not rely on their partner to manage the family finances. I spoke to Jade Bentwood, Head of the Women's Private Office at London and Capital, about this. Jade explained that a significant number of her clients are women entrepreneurs and professionals who have worked extremely hard to get to where they are and intend to continue to have an input into and manage their financial affairs throughout life. There is a real shift in women wanting to have more of an understanding about their finances and feeling empowered when they have their own financial independence. Jade and I have received enquiries from women who, when starting a new relationship, want to know how the wealth they have generated can be protected through management and investment (with Jade's advice) and in the event of any separation (with my advice). 

The increase in the number of women deciding not to have children or going back to work afterwards comes hand in hand, in my experience, with men taking more of an active role in the childcare arrangements. Success both at work and home requires hard work and flexibility on everybody's part but where circumstances permit, if both parents can share responsibility for the school run, sick days and parents' evenings, it is more likely that both parties will also have time to dedicate to their job. In this case, where both parties earn, they are likely to have assets in their own name and to have responsibility for the financial decision making within the marriage.

Finances on separation

No approach is right or wrong and you must always do what works for you and your family. However you decide to make things work, the law is there to help, whether or not you have a sound grasp of the family's finances.

When a couple separates in England and Wales, in order for the court to make a decision about the appropriate financial settlement, both parties must provide disclosure of their assets, liabilities, incomes and needs. If a wife comes to see me and has absolutely no idea what the family has or what her husband earns, I tell her not to worry as our law requires full disclosure before any settlement decisions can be made. The duty of financial disclosure is strict and lawyers have the ability to ask questions about remuneration packages, investments, transactions or transfers which the other party must answer. As part of this exercise, we may also introduce a wife, who has said that she does not have sufficient financial experience, to professionals who will be able to help her understand the financial picture and educate them for the future.  

Where some women find themselves at a disadvantage is when it comes to articulating their needs, which is also required as part of the divorce and financial process. In order to give advice we (and in order to make any orders, the court) need to understand what each party needs to rehouse and what income they need to live off. Women who have not looked at mortgage options, paid bills or paid into a pension often do not know how much life costs. This can be very daunting, particularly when considering a financial offer from their husband. Again, we help our clients to consider their plans for the future and introduce them to other professionals to help provide investment advice and to ensure that what is being offered is sufficient to meet their and their children's needs.   

Whether you take an active interest in your financial circumstances now, during the marriage or afterwards, almost all women tell me they feel empowered by doing so. If it interests you at all, therefore, I recommend you doing something about it today.