Author Nicole Mitton

Navigating the financial aspects of divorce can feel overwhelming, but you’re in the right place to understand why addressing them is crucial. We recognise the stress and emotional strain that come with separating, making the thought of dealing with finances feel like another burden. However, while it might be tempting to postpone these considerations, neglecting your sole and joint assets can lead to significant complications down the line.

To grasp why, let’s consider how marriage fundamentally alters your financial standing. When you and your partner decide to marry, you enter a marital covenant that intertwines your finances. Even if you had assets before the marriage, they could become part of what’s known as the “marital pot” in the event of a divorce. This means that a property you owned prior to the marriage, or any assets acquired individually or jointly during the marriage (including business assets), could be subject to division.

When a couple divorces, the court looks at this marital pot to determine a fair way to divide the assets. Therefore, if you’re dissolving your marital ties, it’s undeniably essential to address the financial aspects to allow both parties to move forward independently. The statistics speak for themselves: between January and March 2024 alone, there were 11,627 financial remedy applications issued in the UK, highlighting the importance of settling financial affairs.

So, how do you go about this? Fortunately, there are several paths you can take. Our preferred approach is reaching an amicable agreement through consent. This could involve you and your spouse discussing your assets and coming to a mutual understanding, followed by instructing solicitors to formalise the agreement.

Alternatively, you might engage solicitors from the outset for negotiations or attend mediation. Regardless of the route you choose, we always advise our clients to explore out-of-court settlements as they can save costs, and the stress associated with court proceedings.

However, we understand that reaching an agreement outside of court isn’t always possible. In such situations, our dedicated family team is here to guide you through the Financial Remedy process from start to finish. We will provide support at every stage, from pre-negotiation to issuing the initial court application (known as Form A) and beyond. Our priority is to support you while minimising costs and stress.

Whether you achieve a financial agreement through mutual consent or court intervention, resolving your finances during or shortly after divorce is undeniably necessary. Without a formal settlement, you remain financially connected to your former spouse. Even though the marital bond is legally dissolved, the financial ties can persist, potentially impacting your future investments and financial decisions.

Consider the case of Wyatt v Vince (2015), a compelling illustration of the consequences of not securing a formal financial settlement. This couple divorced in 1992 when they had no significant assets. Years later, the former husband became a millionaire. In 2011, his former wife successfully applied for a financial order and received a substantial lump sum payment. This case powerfully demonstrates that even in the absence of assets at the time of divorce, a formal financial order is vital to prevent future claims.

So, ensure that you sever the financial knot and prevent an avoidable financial tug-of-war to protect your future. For further information and guidance on divorce and financial remedy orders, contact us on:

Email: nmitton@calegaladvice.co.uk

Telephone: 0300 561 2600