The end of your marriage does not mean the end of your financial ties…

The divorce process has become increasingly accessible to all, especially following the introduction of the no fault divorce which came into effect in spring 2022.  However, the issue of finances is often ignored, particularly due to the lack of information available on the online portal when filing the divorce application.  The potential consequences of not dealing with your respective financial positions on divorce can be grave; the end of your marriage does mean the end of your financial ties to your ex-spouse and a financial order will need to be obtained.

Financial Orders can take the form of a Consent order or a Final Order following a contested Final Hearing, both of which are equally legally binding; preventing parties from altering their positions and returning the matter to court to make a financial claim in the future.  This allows for parties to move forward with the knowledge that all claims from their previous marriage have been settled and financial ties have essentially been cut.

What is the difference between a Consent Order and Final Order?

At the time of dealing with the divorce, many will reach an amicable agreement in relation to the division of assets. Such assets can include (but not limited to), the family home, savings, investments, pensions and even debt.  When parties are in agreement as to the division of assets, such agreement will need to be incorporated into a suitable Consent Order, by your solicitor and filed at the court, for approval. This is usually done without being required to attend court.

In cases where an agreement cannot be reached, there is still a very real and serious need to obtain legal advice with an aim to reaching a settlement with your spouse, a number of options can be explored before an application to the court to deal with the issue of finances, is necessary. If the matter does progress with the court assistance, every attempt is made for parties to agree during proceedings, but in some cases the matter will advance to a Final Hearing  where the Judge will make a final decision as to the division of assets, which in turn will be incorporated into a Final Order.

What if I do not want a Financial Order?

When a Financial Order is not obtained, financial claims between you and our ex-spouse will remain open; allowing you both to bring claims against each other in the future, even when you have obtained your Final (divorce) Order/Decree Absolute.  So, if a party’s financial claims have not been dismissed by way of a Financial Order, so long as that party has not remarried, it is open to either party to make a claim at any point in the future; there is no time bar.

Furthermore, the court will look at the entire financial positions of both parties when the application is before the court, not the date of separation or divorce. There is no set or standard formula for calculating appropriate financial provision on divorce. The court has a duty to consider all the circumstances of the case and to take into account factors set out in relatively old legalisation contained within the Matrimonial Causes Act 1973 (section 25 factors).

What if I have remarried?

Individuals must be aware of the “marriage trap”.  Essentially, following the Final (divorce) Order/Decree Absolute, if you decide to remarry without a financial order, you will be prevented from applying to the court for:

• A lump sum order
• Property adjustment order
• Spousal maintenance (against your previous spouse)

But this does not apply to your ex-spouse, if they have not remarried.  The above claims will remain open.

Surely if I have been divorced for a number of years, my ex-spouse cant make a claim?

There have been a number of cases which the court has shown a willingness to consider and allow financial claims when parties have been divorced for a number of years:

Vince V Wyatt

No financial order was obtained at the time of divorce, some 18 years, previously. At the time of divorce parties had little by way of assets and income. Mr Vince went on to have a very successful businesses, making a fortune in wind farms.  Ms Wyatt issued an application for a financial order for herself and the children.  Mr Vince argued that Ms Wyatt’s claims should be dismissed, give the time they had been divorced. However, it was made clear that financial claims survive indefinitely.  In conclusion:

• Mr Vince was to pay Ms Wyatt a lump sum of £300,000 in full and final satisfaction of all her financial claims; and
• Ms Wyatt was to retain a payment on account of £200,000 paid to her by Mr Vince towards the costs of the Supreme Court appeal, in addition to the award of £125,000 towards her costs made in December 2012.

Glen and Nicola Briers

Parties divorced in 2002.  During their marriage both parties worked as teachers before Mr Briers started his own business in the fashion industry.  At the time of divorce in 2002 the business turned over £1 million a year with an estimated value of more than £10 million (unknowingly to Ms Briers).   Ms Briers was given:

• A lump sum of £150,000 to pay off the mortgage on the family home (valued at approx. £750,000) which she kept
• An annual salary if £10,000 in addition to child maintenance

In turn Mr Briers kept the business.  Upon learning that the business was valued at over £10 million, Ms Briers returned for a bigger cut.  In this case the Judge ruled that Mr Briers had not been honest in relation to his wealth and they never formally dismissed their financial claims from each other.  Ms Briers was awarded:

• A lump sum of £1.6million
• 25% of Mr Briers’ pension

So how do I protect myself?

It is important to dismiss financial claims, you will need to obtain an approved Financial Order whether this is made by consent or not.  If there is no approved Order there is no full and final binding “clean break”.

Failing to get a Financial Order is essentially a risk that at some point in the future you could be faced with a financial application which will be considered ,as per the financial position of each party at the time of filing.

How can Andrew Isaacs Law help?

Our Family Lawyers have a wealth of experience in dealing with financial matters.  Contact us today to arrange a fixed fee consultation to find out how we can help you.

Article dated:  10.05.2024