How advisers and family solicitors can work together in divorce settlements – FT Adviser

‍First published in FT Adviser on 17 November 2025

Peter Turnbull - Independent Financial Planner and Director at Enbrook Wealth

Sarah Bunn - Senior Associate at Burgess Mee

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Divorce is a juncture where clients are asked to make important financial decisions that will have a decisive impact on their futures. It signals the end of a partnership and the expectation that each party moves forward as independently as possible.

For many divorcing couples, the objective is to achieve an immediate clean break - a settlement that ends all ongoing financial claims arising out of a divorce.

This article considers how financial advisers and family solicitors can work together to explore the viability of a clean break when negotiating financial settlements, with a focus on the benefits of cashflow modelling.

The law

One of the financial claims arising from a divorce relates to income. While the court’s approach is not to share future income, it can order that one party pays the other spousal maintenance if they need it. Spousal maintenance is usually ordered for a specific term (a set number of years) and the quantum (the monthly amount) is subject to an assessment of both the paying party’s ‘income needs’ and whether the sum represents a fair proportion of the payor’s available income.

If a financial settlement includes provision for a spousal maintenance order, then the payee’s income claim against the payor remains open. This allows for the term and quantum of spousal maintenance to be varied by either party by agreement, or by an order of the court, during the lifetime of the order. Only once a spousal maintenance order has expired is the payee’s income claim dismissed and a ‘clean break’ achieved.

In every case where a term of spousal maintenance is possible, consideration must be given to whether one party’s income needs can be met by way of a capital lump sum, as opposed to a term of spousal maintenance; the court has a duty to consider if a clean break is appropriate. For the payee, this means potentially relinquishing (or reducing) an income stream in exchange for a lump sum payment. The payee will receive the benefit of capital (that can be invested)immediately and the payor will often receive the benefit of a discount being applied when calculating the capitalised sum.

It is, therefore, not surprising that the financially stronger party often favours an immediate clean break with no provision for ongoing spousal maintenance. A clean break provides certainty; it allows the financially stronger party to retain all future income and increase their earning capacity without the worry of a future court application.

It is a common misconception that the financially weaker party prioritises a financial settlement that includes provision for spousal maintenance. Whilst itis imperative that they are not left in a vulnerable position in the long term, the financially weaker party may also prioritise capital over income and, therefore, prefer a clean break settlement. They will be aware that a spousal maintenance order automatically ceases upon remarriage, and they can be left vulnerable to an application to vary maintenance down if financial circumstances change, for example, long-term cohabitation, if they receive a substantial inheritance or their former spouse’s income reduces. A financially weaker party may wish to be financially independent, thereby avoiding possible issues surrounding the enforceability of spousal maintenance orders where a former spouse is reluctant to pay, especially if financial control was a feature of the relationship.

While family solicitors will advise on the legal ramifications of a clean break, one of the key questions all clients will want to have answered requires the input of a financial adviser: ‘what is enough?’. In other words, is the sum both acceptable and sustainable in the long term .

The role of financial planning

Naturally, when financial advisers hear the question ‘what is enough?’, they might start vividly imagining cashflow models and complex spreadsheets. Heuristic rules of thumb, sequencing risk, cash buffers, inflation, tax, and longevity might also spring to mind, along with the psychological challenge of spending down capital and helping clients overcome a scarcity mindset.

These concepts are fundamental to making a well-informed decision about a settlement proposal that includes the capitalisation of maintenance.

However, many people are making these life-changing financial decisions without taking advice. Professor Emma Hitchings’ research on this topic, presented in the Fair Shares? report,  states that only around one third of the 100,000 or so couples who get divorced every year use legal services. While there is a dearth of reliable data for the proportion of that cohort that also take financial advice, one might reasonably speculate that it is a low number. This demonstrates a need for financial advisers willing to work with this presently under-served community.

Cashflow modelling

Cashflow modelling is the process of tracking the money someone expects to have coming in and going out throughout their lifetime, alongside projections showing how the value of their savings, pensions, and investments may change over time based on various economic assumptions. The aim is to demonstrate how the client’s income and assets might be used to support their ongoing income needs, with a view to gauging whether their overall financial plan is feasible, and if not, what changes might be required.

In the context of a divorce, a financial adviser can use cashflow modelling to reverse-engineer a target lump sum. They can load in any earned income, existing pensions and investments, property and other assets, and then use the tool to determine how much extra capital is required to ensure that the client does not run out of money. This analysis can then be stress tested using various different scenarios, for instance what happens if inflation is higher than expected, what if the client decides to gift money to their children for house or wedding costs, how much more could the client spend if they commit to downsizing later in life, etc.

While the traditional sources of financial modelling available to lawyers such as the Duxbury Tables are generally accepted to provide a valuable steer, arguably they do not offer the same precision or nuance that financial advisers can when using modern, sophisticated cashflow modelling tools.

Using a 2.5% discount rate, an adviser could easily tell a client they might need a lump sum of £106,078.40 to sustain withdrawals of £1,000 per month for 10 years with some inflation protection (not allowing for tax and, of course, not guaranteed). However, that would be nowhere near as impactful as sitting down together to build a personalised cashflow model, designed around the client’s ideal life, showing how that same lump sum could be used to support their ongoing financial needs and followed up with a simple, visually compelling report summarising the analysis they had a hand in preparing. This is the sort of dynamic, hyper-personalised service that potentially vulnerable clients need to feel confident in the decisions they make, and it is uniquely available through dedicated financial planning tools.

The benefits of cashflow modelling throughout a typical case

Joined-up thinking between a client’s family lawyer and a financial adviser is imperative, and when considering the viability of a clean break, clients could benefit from the following practical advantages of cashflow modelling:

·        Once the parties understand the assets available, using that information for cashflow modelling allows clients and their advisers to consider and, importantly, discuss whether there is enough capital available to capitalise any maintenance claim (and achieve a clean break). It enables clients and their advisers to assess possible settlement options and strategy at an early stage of a case.

·        Cashflow analysis also allows for an exploration about a client’s overall objectives and the sustainability of those objectives. The data and assumptions inputted into the relevant tool can be changed in accordance with the client’s objectives to explore what they may look like in practical terms.  For example, where a client prioritises remaining in the family home (even if it exceeds their housing needs) over receiving spousal maintenance, the capital received by way of downsizing in the future may be incorporated into any modelling.

·        As part of the financial disclosure process, parties should have itemised their income needs (their monthly/annual expenditure) and this information will inform the analysis.. Clients or the other party may under - or overestimate their future income needs, and so a discussion at the outset can help manage expectations.  

·        When considering an offer for settlement, cashflow modelling can also assist clients in assessing whether an offer received is viable and establishing a bottom line or bracket in which they are willing to settle, for example, the minimum lump sum they are willing to either pay or receive in lieu of spousal maintenance. For a client, having this figure is especially helpful in the context of negotiations during mediation, roundtable meetings or court hearings; as the structure of proposals are prone to change during negotiations, it is helpful to re-run modelling as negotiations progress.  

·        A client can glean real benefit from having a meeting with their financial adviser and family lawyer to talk through the reality of any offer and possible counter offers in person. This is particularly useful if a client may not be as financially literate as their spouse. They will have the opportunity to ask questions to help them understand the analysis provided, thus empowering them to make informed choices.

·        When making an offer for settlement, the data and analysis produced by a financial adviser can be disclosed to the other party alongside a proposal. This analysis can help justify the reasonableness of an offer and encourage the other party (and the court) to add weight to a proposal.

·        Following settlement, a financial adviser can help a client put into practice the analysis carried out at the beginning of the case. At this stage, the client will already have a good working relationship with the financial adviser and an understanding of what needs to happen to maximise their income streams from any capital award.

Conclusion

In every financial case, the court has a statutory duty to consider whether a clean break is achievable. The financial obligations between the parties must end as soon as it is ‘just and reasonable’. Whether a clean break is affordable in any given case must, therefore, be a core consideration for both parties.

Any legal arguments for or against a clean break will be bolstered by an in-depth analysis of what a clean break may look like on the ground – what income stream will be available to a client in the future, and whether it will be enough.

For both parties to feel confident in any offer they are considering making or accepting, it is often best practice for family solicitors to work in tandem with financial advisers. This collaborative approach helps to ensure that financial settlements are legally sound and financially viable, giving clients peace of mind when they need it most.

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