Financial planning and setbacks associated with separation or divorce

Financial planning and setbacks associated with separation or divorce

Family Law – UAE and UK

1) How to minimise financial setbacks arising from separation or divorce? 

It is widely known that many of the divorces going through the UAE Courts are as a result of financial infidelity /financial stresses.  Parties often get entangled in to spiralling debts for various reasons however, allowing the debts to further increase will not only have the potential to incriminate the party/parties whose name the debt is in but also far reaching consequences for the family unit including any children.

During the marriage, if financial commitments are to be split between the couple, it is advisable to sit down with your spouse periodically to work out and agree a financial regime whereby expenses and costs can either be shared or if a particular outgoing ie payment of a credit card is in one party’s name, then the other party may be responsible for another outgoing.  If such arrangements are not viable or practical, the couple should always ensure that there is transparent visibility of all the family finances. When one spouse is unwilling to disclose information, it could be a sign that something may be wrong.  It is always best to nip any issues in the bud before they escalate to a dire situation.  

If following a separation/ divorce, matters had been put in place, it will be easier for the parties to part ways without having the extra burden of marital financial commitments lurking over them.       

2) Is a prenuptial arrangement or even post nuptial agreement advisable?

The simple answer is yes.  Such Agreements not only assist parties to be aware of their obligations following divorce, they also minimise legal costs when contesting a divorce case with associated provision for the family finances and the children.   Separation or divorce can be a very emotional time for the family and having such Agreements in place may assist to alleviate anxieties, stress and other emotions which can be high at such a crucial time in one’s life.

Another way to potentially reduce, if not eliminate, areas of contention could be to enter into a Family Ownership Contract pursuant to Dubai Law No. 9 of 2020, which is designed to assist in regulating Family Ownership in the Emirate of Dubai. Such a Contract would determine interests in Companies and any other movable or immoveable property where the family members are bound by common ownership. For example, if a property is registered in the sole name of a member of the family, but other family members also have a financial interest in the property, the Contract may stipulate the extent of those other family members’ interest in the property.

3) Since court cases tend to be expensive, what is the best way to discuss and resolve disputes over joint assets, child or pet custody as well as alimony?

There are a number of options available to avoid lengthy and costly Court hearings in respect of any family issue.  First, the parties should as far as practicable try and discuss the issues with a view to reaching an amicable Agreement.  I am aware that this is not always possible but some issues may be able to be ironed out between the parties without legal intervention.  

The parties can try an alternative dispute resolution process such as Mediation or Arbitration which again would save on lengthy and costly Court hearings.   As there may be many areas/issues to discuss including arrangements for the children and family finances, alternative dispute resolutions can be used to deal with a number of issues or any specific issue.   

Lawyers can also be instructed to negotiate through correspondence or arrange round table meetings with a view to reaching an amicable settlement. There may be a lot of back and forth however this process is likely to be cheaper than dragging the matter through the Court where there may be numerous hearings, which no doubt will add to the costs.  

Once matters have been agreed, your Lawyer would be able to draft a Settlement Agreement and the parties can proceed through the UAE Courts on an amicable basis.   

As the above is only an overview, for further information or advice, please contact Dee Popat or our Family Department.


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