Resolving the financial issues arising on the breakdown of your marriage directly with your former spouse is positive in many ways. You will often feel better about the situation and it saves legal fees but it can be a false economy not to get advice about formalising the arrangements. The Family team explains why.
Whilst getting a divorce ends the contract of marriage, the financial claims afforded the couple by virtue of their marriage will remain live.
Many couples amicably agree the division of assets at the end of marriage and implement this division. However, they will then often overlook or fail to appreciate the importance of formally recording their agreement and terminating the respective claims that each of them has against the other. This means that claims may still be brought in the future irrespective of whether Decree Absolute has been granted or not.
Whilst things may have been amicable at the time of separation, relations can sometimes turn sour and this can create a particular risk if one spouse goes on to have financial success after the divorce. Indeed the financial success, lottery win or inheritance by one party can be the catalyst for the other party questioning the arrangements made on separation. They may feel they should have a share of the financial benefits which are now available.
The court will always review the financial circumstances of the couple at the time of issuing proceedings and for a 12 month period prior to this, not at the time of separation. Claims may still be considered even if marital assets at the time of separation were divided, which could place an ex-spouse who had success post marriage in a vulnerable position. lt is a matter for the court's discretion as to the extent post separation assets will be excluded.
A Consent Order enables the divorcing couple to record any agreement reached regarding the division of the finances and will also deal with the dismissal of future financial claims they have against each other, meaning the couple will divorce with a clean break and no financial ties to each other. Without an order, an ex-spouse could make a claim for capital and income if the circumstances of the other spouse have dramatically improved since separation.
Therefore if you reach agreement at the time you separate, get those arrangements recorded in an order. This provides protection to both parties. It also offers a method of enforcement should the terms of the order not be upheld and the clean break to avoid future financial claims.
When getting a divorce, it is always sensible to take legal advice on the financial matters that arise from your marriage and how to deal with these in a timely manner. If you failed to do so at the point of divorce seek advice about rectifying the situation now. You should also be careful about re-marrying before a financial order has been made because in certain circumstances you may be prevented from applying for an order whereas your former spouse may still be able to do so.
The information on this site about legal matters is provided as a general guide only. Although we try to ensure that all of the information on this site is accurate and up to date, this cannot be guaranteed. The information on this site should not be relied upon or construed as constituting legal advice and Howes Percival LLP disclaims liability in relation to its use. You should seek appropriate legal advice before taking or refraining from taking any action.