Securing your 'financial' divorce and sleeping easy
July 3, 2017
In most of the cases we deal with, we can achieve a divorce in a fairly straight forward and cost effective manner. What people often aren’t aware of, or ignore, is how important it is to secure a financial order (or, you could say, a ‘financial’ divorce) as well, whether or not any money is changing hands.
The law encourages parties to reach financial agreements which are workable for them, thereby avoiding contested court proceedings. But an agreement, verbal or signed, is NOT legally binding, unless it is turned into an Order. Even if the divorce itself has gone through, ex-spouses can still bring financial claims against the other in the future, potentially without a time limit. This doesn’t mean that you actually have to attend court – so long as you instruct your solicitors to draft a financial agreement into what is known as a ‘Consent Order’. This can all be submitted to the court on paper, just like the divorce itself, and no one need ever set foot inside the court.
One example a lot of people have heard about, is the case of Wyatt v Vince (2016), in which the wife was able to bring a claim 20 years after the divorce. The parties had no assets when they divorced but, crucially, they did not also apply for a financial order. Mr Vince subsequently set up a very successful business and became a multi-millionaire. His ex-wife was permitted to make a financial application and was eventually awarded £300,000, 25 years after they had separated. Mr Vince described the decision as "mad" and you may share his view. Either way, if Mr Vince had obtained an order at the time of the divorce (20 years ago), he could have protected himself.
In another recent case, Briers v Briers (2017), the husband paid the wife a large settlement sum after separating, he transferred their home to her and she transferred her share in the business to him. However, they did not apply for a financial order. The wife was therefore able to bring a substantial claim, even though they had separated in 2002.
Clearly, if your job prospects improve or, for example, you are successful in business, win some money, or receive an inheritance, it will be sickening to have to hand large chunks of that to your ex, several years after separation. But even if you don’t come in to money, the very fact that there was no ‘financial’ divorce, means that a claim can be made.
Whether the sums changing hands are large, small or nil, you still need a final financial order reflecting that, and which prevents a claim being brought in the future.
Talk to our divorce and financial experts about how to secure a binding financial order or, of course, if you are divorced but did not obtain a financial order and wish to discuss bringing a claim now.