Are Your Finances Protected if You Separate or Get Divorced?
09 December 2016
The grant of the Decree Absolute or Final Order by a Court ends a marriage or civil partnership in England & Wales. For many couples this is enough.
The couple separating or getting divorced may have informally agreed how their financial assets should be shared. They may have no assets, or may only have debts. Other couples may feel confident that they can agree terms with their former partner in the future. But is reliance on goodwill and good intentions enough?
Is it too late to pursue your former partner many years after your separation? Can a claim for a financial settlement if raised 5, 10 or even 25 years after divorce reduce the value of the claim or even extinguish the financial claim altogether?
In divorce cases if no previous final Financial Orders have been made by a Court, there is no legal time limit in which to bring a financial claim. If you delay asking the Court to consider your financial claim after divorce, the reasons for the delay may be relevant as to how much, if anything, you might receive.
In a recent divorce case heard by the UK Supreme Court the former wife made a claim for a financial remedy 18 years after the divorce, following a short marriage. At the time of the marriage the couple had no assets. The husband later developed a very successful business career, and built up a company worth at least £57m. The wife was in poor health and lived on a low income. The wife was allowed to make her financial claim notwithstanding the long delay.
The couple agreed the wife’s claim and the former husband gave her a cash sum of £300,000 in settlement of her financial claim. She also had a substantial contribution toward her legal costs of bringing the claim.
In another divorce case a wife was allowed to make her claim 25 years after her divorce. The Court said her claims were treated as being held in abeyance. She was allowed to make her claim.
What if you won the Lottery 10 years after the separation; or you became fabulously rich from the sale of a brilliant invention after 15 years. Would your new financial position be protected? The answer is simply, no.
Any divorce financial settlement will only become legally binding upon a couple once it has been formally drawn up and approved by the Family Court. Often this is done by agreement and referred to as a Clean Break Order or Consent Order.
So whether you have nothing to share or many assets to share a final financial settlement Order is essential.