They think it’s all over – but it isn’t quite yet
These days, almost anyone can do their own divorce. It’s now very easy to do – it can be just a straightforward online application.
However, the divorce process simply dissolves the marriage. What about the financial impact of a divorce on the now-divorced couple? What happens about potential future financial issues?
If no thought is given to protecting receptive financial positions and protecting both current and future, then a claim for a share of those assets can be made much later.
Following the divorce, what if there is a lottery win or an inheritance. How does that change things and what to do? A future claim could also include assets you already own including properties, investments and even your business or pensions benefits which may have substantially increased in value since the divorce.
People think if they get a divorce, it’s all finished - but it’s not. In a world where an online divorce may be an easy and cost-effective route to dissolve the relationship, there is a real risk for many divorced couples that ignoring the finances is a real and present danger. If an essential financial clean break order is not agreed, drawn up carefully and then filed and approved by the court, the net is left wide open for one party to be pursued at a later date by the other for money and more.
Without such a clean break order, the path is open for one party to start the legal process which ultimately will end up with the court deciding what is a fair settlement of everything built up during the marriage and after it. Yes, it can consider money, or anything acquired post-divorce. What if a business has signed a lucrative new contract after the divorce? What about that lottery win or the inheritance? Yes, all these are examples of assets which fall to be divided by the court at a later stage following divorce, if no clean break agreement and order is achieved after divorce.
The Court will look at the current valuation of all assets as part of the process. Obtaining a court-approved financial clean break order is the only way to stop your ex pursuing a claim in the future.
The starting point for a court to decide a fair settlement is equal division, but there are several factors the court may take into account to decide to depart from this principle, such as the length of marriage, any financial contributions made by the parties, and capital needs for both parties moving forwards.
Today, people’s capital and income requirements are a very important factor for the courts. For example, take a higher earning individual whose other half has concentrated on raising the family and has put their career on hold. In this instance the non-working party may be entitled to not only a claim for a capital lump sum, or have property transferred to them to make their future pension pot fair, but they may also have an income claim which is referred to as spousal maintenance.
These are common claims which our Leeds based Family Law Team here at Emsleys are often asked to advise on. If the financials are not agreed initially as a part of the divorce, the divorced parties have the right to bring up financial matters again at a future date unless they have re-married. If the process started post-divorce, the courts will look at the present financial situation and if there is a significant growth in business value, inheritance or even a lottery win this all could affect the amounts awarded to each party!
Often a party may think they can hide away assets to prevent the other party from discovering their true wealth but with financial proceedings, parties must disclose all their assets owned jointly and in their sole names. If they do not disclose this, the court can make them provide their information and in addition orders can be made to freeze assets and prevent a party from hiding information to block a fair result.
To conclude, any competent lawyer will recommend that financial clean break orders are always included in divorce proceedings. This is to protect the parties’ assets, and even future assets gained after the divorce which can still influence how a court will divide the assets of the divorced couple. By obtaining a clean break order, the parties can now look forward to a future without fear of financial claims from their spouse, sometimes many years later.
At Emsleys
We care about getting you the best financial settlement because our reputation depends upon it. We know what is important to you and will advise on what is achievable dependent upon any individual case. Our team are experienced in the field of financial divorce and know where exactly to look to provide an accurate financial presentation for the courts to approve.
Set in Colton, East Leeds, our team are qualified lawyers and members of Resolution, which is an organisation that prioritises an amicable approach to try to reach a financial settlement. We are also a member of The Law Society’s family panel which recognises a lawyer having had a significant experience in family cases.
