Couples may not be aware that an agreement reached between them in divorce is not legally binding unless it has been approved by the court as a financial Order. A litigant in person may not be aware of the financial risks associated with divorcing without a sealed financial Order. If your marriage is dissolved without a court-approved financial Order, your financial claims against each other remain open. This will leave you in a vulnerable position as your spouse could bring a financial claim against you in the future, and you could bring a financial claim against them. This is also the case even if you think that there are no financial matters to be dealt with following the breakdown of your marriage – either of you could unexpectedly come into money in the future by way of inheritance, lottery win, gift etc and financial claims can then be pursued. Length of separation is no bar to bringing a financial claim.
By dissolving your marriage prior to financial claims being resolved by the court, you are also at risk in relation to pension assets if your spouse were to die prior to the finances being resolved. Upon divorce, you will cease to be a widow or widower and so will have more limited claims against an ex-spouse’s estate even if financial claims were yet to be resolved. Pension trustees may not pay out to a divorced ex-spouse. A solicitor will be able to explain these risks in detail and advise you further in relation the financial aspects associated with the breakdown of your marriage, including what a ‘fair’ financial settlement would be in all the circumstances.
If there are pension assets to be divided as part of an agreement, the pension-sharing administrators will not accept a written agreement that has not been approved and sealed by the court. The sealed Order; the sealed pension-sharing annex (the document setting out the details of the pension and the division of the share); and the Final Order dissolving the marriage will need to be sent to the pension administrators for a pension-sharing Order to be implemented. A solicitor will be able to draft the financial Order and pension sharing annex, send the documents to the court and ensure that the pension administrators have been sent the correct paperwork so that the pension can be implemented.
Tax is also a significant consideration that can easily be overlooked by couples who mistakenly believe that because they are married no tax issues arise. Tax complications can arise in all manner of circumstances and especially where there has been a lengthy period of a couple living apart or where there is more than one property owned by one or both spouses. Tax complications can also arise depending on the types of assets that are to be divided as part of the divorce. A solicitor can take a rounded approach to the circumstances of separation and divorce and point out the benefits and any potential burdens of how a couple intend to resolve matters between them.
The use of a solicitor does not mean the matter will become unnecessarily expensive or adversarial – use of a solicitor allows individuals to make informed decisions about how they intend to move into their new, independent lives. A good quality solicitor will work with a client to establish which parts of the divorce the client can manage themselves to keep costs to a minimum and which parts may need solicitor or other professional input because that aspect is more complicated. Informed decisions can save money and stress in the long run.
If you would like to discuss your personal circumstances in confidence, please contact a member of the Family Team, and we will be happy to advise. You can contact the team on 01473 298 344 or grayment@prettys.co.uk.
