When a divorce is granted, this doesn't end financial ties between the couple. In order to divide marital assets (such as the house) and then sever the couple's financial ties, a Financial Order will need to be put in place. This doesn't happen automatically as part of the divorce process.
A Financial Order can be put in place at any stage after a divorce has been finalised, even if years have passed. However, if the couple fail to do this at all then they risk the other person making a future claim to their finances.
Dealing with Marital Assets in Divorce
Untangling joint finances is often the biggest cause of worry during a divorce. People are often anxious about what will happen to the assets, such as the house, savings and pensions. If children are involved, then there is also the question of where they will live and who will look after them.
When the Court grants a couple a divorce, this will only sever the marital ties between the couple and it will not dissolve the financial ties. It is therefore important that people going through divorce obtain a Financial Order from the court that tackles this problem.
Divorce Financial Orders Explained
In order to sever financial ties with a spouse, divorce proceedings must first be started through the Courts. Once the Decree Nisi stage of the divorce is reached (which is typically half way through proceedings) the Court will then allow the couple to submit an order for financial severance.
There are two main routes for severing financial ties after a divorce. The first is to put a type of Financial Order in place called a Consent Order. As the name suggests, with a Consent Order both people agree to the terms of the financial separation, including how the house should be divided.
These terms are then drafted into the Consent Order by a Divorce Solicitor, and this document would then be reviewed and approved by the Court before it becomes binding. The Court will only approve a Consent Order if they believe it to be fair.
If an agreement cannot be reached then an application will need to be made to the Court to decide on the terms of the financial severance. This can be a much more expensive route to take, as it could involve a significant amount of legal work on both sides. Both people will need to fully disclose their financial assets to the Court, and the Court will then decide how these assets should be split.
Dividing a House in Divorce
A house is usually the most valuable asset that a married couple has, so dividing this asset can be one of the most complicated aspects of the divorce.
When putting in place a Consent Order, there are a number of ways in which the family home can be split. These include:
- Selling the property and splitting the sale proceeds
- One person buying the other's share in the property
- Keeping the property as joint owners, and one person living there with the children until they're 18
- Transferring an interest in the home from one person to the other, even if they no longer live there. This means that when the home is sold, they will be entitled to a share of the proceeds
For more information, see How is a House Divided in Divorce? If you're unsure of what the best option would be for your circumstances, a Divorce Solicitor will be able to advise and guide you on this.
Remember, if nothing is done regarding the financial ties following the divorce, this leaves both people open to a future financial claim from the other.
To speak with a Divorce Lawyer call 03306069626 or contact us online and we will call you.