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5th May 2021

Why divorce doesn’t mean that you will automatically cut financial ties with your spouse

Lisa Ball

One of the things that I regularly come across when my clients instruct me is that it almost always comes as a surprise to them that simply getting a divorce does not mean that their spouse can no longer make a claim against their finances in the future.

Finances during divorce

Divorce and finances – the law

Spouses and former spouses have rights to make financial claims against each other by applying to the Court for orders for any or all of the following:

  1. Maintenance (i.e. income payments).
  2. Adjustment of property ownership (e.g. transfer of a house from joint ownership to the sole ownership of one spouse).
  3. Lump sums (i.e. capital payments).
  4. Pension sharing attachment.

These rights can only be brought to an end in two ways. The first and most usual way is by a Court Order (a Financial Consent Order). Where one or both spouses do not wish to proceed with financial claims then, provided the Court agrees that such an order would be appropriate, an order can be made dismissing their financial claims.

The second way is where someone obtains a divorce and then re-marries. In this situation, unless that person has already applied for the orders for a lump sum or transfer of property which they are seeking either in the divorce Petition or by way of formal application on Form A before they remarry, then they are caught in ‘the re-marriage trap’. The effect of this trap is that they have lost the right to make those financial claims against their former spouse.

In Practice

Some clients come to me and indicate that they want to wait for two years to get divorced so that they can keep things amicable and rely on the fact that the parties have been separated for 2 years as opposed to alleging blame on the other party by proceeding with a divorce based on the other party’s adultery or, more commonly, their unreasonable behaviour.  However, when I inform them that they are unable to end their financial claims by way of a Financial Consent Order (as referred to above), until they have reached Decree Nisi stage in the divorce proceedings, this often leads the client to take a different path and initiate divorce proceedings sooner rather than later in order so that finances can be dealt with promptly.

I also have clients that come to me and ask for advice in relation to finances despite it being many years after the divorce was finalised. At this stage things become more complicated as, more often than not, both parties have moved on with their lives and may have invested independently of the other following the conclusion of their divorce or they have received gifts/inheritance that has improved their financial situation significantly.  They are then somewhat disappointed when I have to advise them that they have a duty to provide full and frank financial disclosure to their ex-spouse and this means being up front and providing full details in relation to their income, capital and pensions.  My clients in this position often comment to me that they wish they had dealt with their financial claims at the same time as the divorce proceedings concluded as they genuinely did not know that their ex-spouse could come back to them for money at a later date.

I often find that my clients who are in this position sought to save costs in the initial divorce proceedings and, therefore, they did not have the benefit of specialist legal advice from the outset. It is therefore imperative that if you are considering divorce proceedings that you take the opportunity to get specialist advice from a Family Lawyer before deciding on the path that suits you.

I bespoke the work for my clients so as to ensure that every element of the divorce and finances is dealt with collectively with the end goal of the divorce, not only concluding with the parties no longer being married, but having also achieved a financial settlement that enables both parties to move on with their lives, independently of the other, without the fear of Solicitor’s correspondence landing on their doorstep at a later date.

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