Put off financial matters at your peril!
Coming to terms with a marriage breakdown is never easy, and the thought of beginning divorce proceedings is likely to be daunting and unpleasant, even when you know you are making the right decision.
Once you have made the decision to begin divorce proceedings, most people appreciate that this is a legal issue which necessitates a formal legal process, in order to dissolve the marriage. Most people do not however realise that the same is true of financial claims following a separation.
Although nobody should enter marriage thinking about what they can claim if they later split up, as soon as a couple marry, they acquire a legal right to be able to pursue a financial claim against their spouses’ income and capital, in the event of their later separation. Sometimes in the midst of a separation, especially an acrimonious one, the consequences of this can be either overlooked or underestimated.
In the last few months I have noticed an increase in new clients seeking my advice on financial matters when they divorced perhaps five to ten years ago, but financial matters were not concluded alongside the divorce. This could be for a number of reasons such as: they simply did not discuss finances at the timetheir spouse was not open to dealing finances and they decided not to pursue itthere was no immediate issues and as time went by it became overlookedat the time they had no substantial income or assets so felt it was unnecessarythey reached an informal agreement with their spouse, which was never formalised
Whatever the reason may be, most clients are surprised and concerned to learn that as they did not obtain a court order within the divorce proceedings confirming financial terms agreed and dismissing all financial claims arising from the marriage, giving them a “clean break,” that those claims remain open despite them being legally divorced. What can be even more shocking, is that in the majority of cases there is nothing to prevent their ex-spouse claiming against all of their current income and capital, even if the majority has accrued since they separated and with their ex-spouse having made no contributions to that wealth at all.
In reality however difficult it may be to face financial matters during your divorce, it is always preferable to do so as whenever there is delay between divorce and financial settlement, resolution will become much more difficult. Bearing in mind that nobody can predict the future, there can be significant changes in circumstances during any period of delay. These can not only alter the likely outcome of a potential settlement, but can also render the actual process of trying to resolve these matters more difficult.
There are different options open to you when considering how you wish to try and resolve financial matters. You should carefully consider the best approach for you, but bear in mind that some options will only be available if your spouse is willing to co-operate. Ultimately however there is always the option of applying to court for a financial remedy order if you want to resolve financial matters but are unable to do so by any other means.
It is incredibly important to protect your financial position following a separation. You should do so to allow yourself to move on independently for a brighter future without the worry of having to constantly look over your shoulder, with the worry that at any time, you could be forced to fight for your future financial security.