Sort Your Finances Out!

1 year ago

Sort Your Finances Out!

It’s a VERY common misconception that when you divorce your former spouse, you are completely freed from the marital ties.  Oh if only I could have a quid for every person who has told me they “sorted their own divorce”, swiftly followed by answering my question: “Did you sort your finances out, too?” with a confused face or a negative response.  People just don’t tend to realise that the financial relationship created by marriage does not end simply with divorce – you need a completely separate financial order to sever the financial ties created by marriage and end the financial obligations you have towards one another.

Thinking of Getting Divorced?  Think “SMART”!

What do I mean by thinking “SMART”?  This little acronym should take centre stage when it comes to helping you sort your finances out.

S – SPEAK

Speak with your former partner.  What do they expect?  What do you expect?  Can you agree terms for the separation of the finances and marital assets?  If so, a Clean Break Order is by far the most civil and non-contentious way to completely and quickly sever your financial ties to your former spouse.

M – MATRIMONIAL ASSETS

Anything goes, here.  All the assets can potentially become part of the matrimonial pot.  If you cannot discuss this with your ex, or you think they are likely to intentionally withhold information (perhaps in relation to their pension or hidden shares), you may need to firstly attend Mediation, and thereafter, if you cannot resolve matters, you would need to apply for a Financial Remedy Order using Form A.  Please get legal advice before you complete this form so that you understand the implications of what you are applying for (for example, a lump sum payment may be a preferred remedy to periodical payments as it will enable you to break free of any connection to your spouse, as opposed to being connected until you remarry or pass away – that’s a LONG time to be connected to someone you are trying to divorce.  It is, however, the right option for some people!  Discuss your options with your legal advisor.

A – AMICABLE

Wherever possible, keep things amicable with your ex.  You are more likely to get what you want (or something closer to what you want) if you can agree it.  You attract more bees with honey than vinegar, as the saying goes! Try to avoid hostility wherever possible.

R – “REMARRIAGE TRAP”

Beware of the remarriage trap!  Ideally, and with advice, you will generally sort your finances out before applying for your Final Order (previously referred to as decree absolute).  You can still apply for a financial order if you are already divorce, but you may have lost your entitlement to certain assets of the marriage.  One of the other issues, is remarriage.  If you remarry, this ends your ex’s financial obligations to YOU but your obligations to THEM may continue.  Any inheritance or other windfalls could be subject to a claim, as well as your coveted pension.  Conversely, if they remarry, this brings your obligations to them to an end, but it does not bar you from making a claim against them.  This can cause all sorts of issues, particularly if you remarry and have not resolved finances with your ex; should you pass away, your ex could still have a claim against your estate.  You need a financial order to sever the entitlement to make a claim.

T – TALK

Talk through your options with your legal advisor.  They will be well versed in the application of Section 25 of the Matrimonial Causes Act 1973, which the Court would use to consider how to split the matrimonial assets.  They will be able to discuss the various remedies with you so that you can be clear on what it is you want and what would work best for you, which is especially important if you have children.

Before You Apply for Divorce

Get some advice on the financial implications! The ideal situation is to agree terms, but even if you cannot, it is preferable to have the financial aspects resolved before you apply to finalise your divorce.  Don’t let your “financial freedom” from your ex come unstuck because of this – take control!