Divorce – Don't forget to sort out the finances
In order to save on costs, it is now more common for people to choose a cheaper route to divorce and do it themselves.
The divorce process itself can be relatively straightforward and is dealt with by the court in the absence of the parties except in rare cases where the divorce is defended.
However, many clients are surprised to find out that the divorce process and finances are entirely separate. The divorce petition contains a “Prayer” section which you would normally tick requesting that you be granted the various financial orders the court has the power to make. However, a separate application needs to be made to the court if you want the court to make an order about your finances.
The divorce process brings your marriage to an end but does not deal with issues regarding your assets. No provision is made for what should happen to assets such as property, pensions and savings.
Another issue that clients going down the DIY divorce route may not be aware of is that if you obtain a divorce without sorting out the financial aspects by way of a court order, these claims remain open indefinitely. This means that it is possible for you or your former spouse to make an application to the court years after your divorce seeking a financial settlement.
Some clients do not feel this is necessarily an issue if they currently have no assets to share. However things can change. Would you want your former spouse coming out of the woodwork if you were to inherit some money?
The dreaded “remarriage trap” is another pitfall to beware if you are getting divorced and intend to remarry. It is crucial that financial issues are fully resolved before remarriage.
If you divorce, then remarry without either having ticked the relevant boxes in the prayer section of the divorce petition or issued an application for financial provision, Section 28(3) of the Matrimonial Causes Act 1973 provides that you cannot apply for periodical payments (maintenance), lump sum or Property Adjustment Orders.
It is particularly easy to fall into this trap if you are the Respondent to a divorce petition as you would not have the option of seeking orders for financial provision and all that is needed to respond to the divorce petition is to complete a form of acknowledgment.
Where there are assets such as property and pensions, it is desirable for this to be sorted out and finality to be obtained by a court order reached either by agreement or as a result of an order imposed by the court.
Sorting out your finances does not have to be a costly, drawn out affair and an agreement can be reached through various routes such as solicitor negotiation and mediation. Any agreement reached can be submitted to the court in a “Consent Order” and this can then be approved by a judge and the order sealed. In cases where agreement cannot be reached, an order is made by the court.