Many people are not aware that a divorce itself does not bring to an end the financial claims that separating spouses can make against each other.
Deborah Marsh, associate and collaborative lawyer in the Family Law team at Wake Smith, looks at the necessity to obtain a financial order from the family court in addition to a divorce.
“There are many financial issues to resolve when separating. These include what will be done with the family home; how should other assets and pensions be divided and how will outgoings be met moving forward, as well as numerous other considerations.
“The family court can make a variety of financial orders either during or after a divorce dealing with such matters.
“Those unable to reach agreements between themselves on such issues will usually seek the advice of a family solicitor.
“However, those who amicably resolve these matters and are dealing with the divorce themselves may not do so.
“This leaves them vulnerable to future financial claims being made against them by their ex-spouse despite the agreement reached at the time of the divorce.
“The essential point is that a financial order must be obtained from the family court in addition to a divorce to bring these financial claims to an end.
“If this is not obtained, there is nothing to prevent ex-spouses from trying to make future financial claims seeking that further financial provision be made for them.”
There is no time limit on the making of financial claims following a divorce.
Deborah added: “The family court will look at what assets, incomes and pensions exist at the time that the financial claims are being made. This will include assets and pensions and may be an increased income that have all built up since the divorce.
“The family court will, of course, have regard to what assets existed at the time of the divorce and how these were shared, but, the family court can still make further and different orders, including against those post-divorce assets, pensions and income, particularly if circumstances have changed.
“The ability to make financial claims against post-divorce assets, pensions and income is similarly relevant to those parties who divorce but do not, at the same time, deal with finances because there are no assets or pensions to share at that point.
“This is equally dangerous because whilst there may be nothing at the time of the divorce this does not mean there will not be in the future.”
The case of Mr Vince and Ms Wyatt, covered heavily in the media in 2015/2016, highlighted this.
Deborah added: “At the point of divorce there were no assets but, Mr Vince subsequently made millions and years after the divorce Ms Wyatt made financial claims against him, which were eventually settled with her receiving £300,000 plus similar towards her legal costs (Wyatt v Vince [2016] EWHC 1368 (Fam)).
“Financial orders are therefore vital.
“For those who amicably agree the division of assets, pensions and income, or, who manage to reach agreement following negotiation via family solicitors or some other form of dispute resolution, they can have their agreement set out in a financial consent order. This is sent to a family Judge to consider and, hopefully approved without either party having to attend at court.
“Once approved, the financial consent order becomes binding and both parties are protected against future financial claims.
“But, here too, many are unaware that even though they may have reached an agreement a family Judge can refuse to approve the financial consent order, therefore making it binding.
“If a family Judge feels that the agreement reached does not properly provide for the income and/or housing needs of one party, or if it is considered not to be a fair agreement and the protection is lost.
“For those unable to reach ultimate agreement a financial order will be made by a family Judge following contested financial court proceedings.
“Whatever the circumstances, family law advice is required and can be provided by our expert family law team to ensure that clients not only divorce but, also protect themselves financially moving forward.”
Wake Smith is fully operational during the COVID-19 pandemic with departments operating online and staff contactable by phone and email in the usual way.
For further advice on family and collaborative law contact Deborah Marsh on 0114 266 6660 or at [email protected]
