A divorce case recently heard at the Court of Appeal shows exactly why it's so important to make a Financial Settlement legally-binding after a divorce.
The story begins in 1997 when Robert and Doreen Crowther married. When Mrs Crowther's mother died in 2002, she used the inheritance to buy their four-bedroom family home which is now thought to be worth around £200,000.
The couple then divorced in 2007. Mr Crowther went to live in his parents' spare room, leaving Mrs Crowther in the matrimonial home. They had no other financial assets to divide, and Mrs Crowther insisted her ex was not entitled to a share of the property, as it was purchased with money from her late mother's Estate.
The couple didn't make an official agreement following their divorce, meaning Mr Crowther could pursue a financial claim against his ex-wife. He started legal proceedings in 2010, and after seven years of legal wrangling, the case recently ended up in the Court of Appeal.
The Judges ordered that there should be another Court hearing, this time in front of a Family Judge, who will decide what Mr Crowther is entitled to receive. However, they warned Mrs Crowther that she may have to give her ex-husband half the value of the property, meaning she would be forced to sell the property.
Clean Break Orders
The thought of having to split the family home a decade after getting a divorce seems extraordinary, but divorce cases such as these are not unusual. This is because unless a Court Order is put in place following a divorce, either person can make a financial claim against their ex, no matter how many years have passed since they got divorced.
A Consent Order will confirm who gets what, and will include a clean break clause, ending the financial ties between you. Or you can get a Clean Break Order, which is for people who don't have any assets to split, but who want to ensure that a financial claim cannot be made in the future.
If a Financial Order (Clean Break Order or Consent Order) had been created, the legal battle between Mrs Crowther and her ex-husband could have been avoided. However, Mr Crowther would have had to agree to the Court Order, which could have proved a sticking point. If so, it would have been possible to ask the Court to exclude the inheritance from the divorce Financial Settlement.
It's difficult to say whether or not a Divorce Court will leave an inheritance out of the marriage pot. The Court will consider each case individually and makes a decision based upon various factors, such as the nature of the inheritance, the needs of each person and what is deemed to be fair.
Had Mrs Crowther received her inheritance before getting married, she would have had another option open to her in the form of a Prenuptial Agreement. This allows you to ring-fence any assets that you possess or bring into the relationship. Should the marriage breakdown, the Prenuptial Agreement will limit your ex-spouse's claim to those assets.
Tracey Moloney, Head of Family Law at Co-op Legal Services said, "This is a great example of how divorce is not final. Many people think that once they receive the Decree Absolute they are free from all ties, including financial ones, in respect of their ex-spouse. It's so important that people always look to cut the financial ties following a divorce as this can cause the most upset long term."
For initial divorce advice call our team of Divorce Lawyers on 03306069626 or contact us online and we will call you.