DIY divorce – the common mistakes, dangers, and getting a ‘financial remedy order.’
When a marriage breaks down, the parties will usually want to formalise their separation by way of divorce proceedings, but regardless of assets, once a divorce is started, it is important that the parties seek legal advice to consider their financial positions.
Sometimes property and money are simply ‘left’, without division, for many years. This often creates a more complicated and costly situation to resolve later.
If there are matrimonial assets whether held in the parties sole names or jointly, it is vital that the parties reach an agreement on how such assets should be fairly divided, taking into account their respective capital and income needs. Once an agreement is reached, normally by consent it is important that this is cemented in a financial remedy order. This is a legally binding document establishing the division of money and property and finalising the parties’ financial claims against each other.
Why is financial remedy order so important?
Financial orders are legally recognised documents that need to be drafted by a solicitor using recognised legal terminology.
Getting that essential order creates financial certainty that there is no potential in the future for either party being able to claim against the others capital, pensions and income during their life or in death. If there is no financial order, the parties’ financial claims against one another will simply be left open which is an unsatisfactory and uncertain situation. There is also no limitation period set by the Court for preventing future financial claims.
What if there are no assets to divide?
If there are no significant assets of the marriage to divide, it is still important that once divorce proceedings have been started, to get a clean break financial order approved by the Court so that the parties’ financial claims against one another can be concluded.
It is a common misconception that once the Decree Absolute of the divorce (the final stage of a divorce when the marriage is dissolved by the Court) is obtained, ‘that’s it’. The Decree Absolute simply dissolves the marriage, it does not deal with the financial claims between the parties. Such financial claims will remain open until a financial remedy order is approved and sealed by the Court. Financial situations can change over the years, by way of an extreme example a lottery win. It is therefore vital that the parties’ financial claims are considered at the time the divorce is started.
A cautionary tale
This scenario is illustrated by the Vince v Wyatt case which was covered in the media in 2015. Even though the Decree Absolute was made nearly 20 years ago the parties did not at this time address their financial claims against one another. Mr Wyatt became a self-made millionaire and the wife later made a financial application. The Court gave the wife permission to pursue her financial claims against her ex-husband, despite the husband’s objection that a lengthy period of time had passed. The financial issues were eventually agreed by consent between the parties.
It is essential that matrimonial legal advice is obtained if you are contemplating or have started divorce proceedings to ensure your financial claims are considered at the same time.