In England and Wales, a marriage is only legally dissolved by a Decree Absolute being obtained. This is a document produced by the court which declares that two parties are no longer married to one another. What is often misunderstood about this document is that although it does signify the end of a marriage, it does not end all ties with one another.
Of course, for many families there will be children that will keep the parents in contact. However, unrelated to children, there are always financial ramifications of divorce, and this is often overlooked.
Recent figures from the Ministry of Justice have confirmed that a staggering 65% of divorcees in England and Wales did not get a financial settlement at the time of divorce. That’s a lot of people and for some at least, it will surely come back to bite them!
For divorcing spouses, there are a variety of financial claims available to each party under the Matrimonial Causes Act 1973. These claims usually relate to properties, lump sum payments, maintenance payments and pensions. These claims do not end once you are divorced and it does not matter how big or small the pot of matrimonial assets is.
One of the most widely publicised examples of this is the case of Dale Vince, who made his fortune after his divorce. They had no money, so it seems they did not think to get a consent order dismissing any potential future claims. Maybe that seemed safe at the time – but some 20 years later, his ex-wife dragged him back to court, claiming nearly £2 million of his fortune. Eventually, she received £300,000 in that claim – perhaps not the £1.9 million she had hoped for, but still a lot of money to pay 20 years after a divorce! Had it been dealt with at the time of divorce when they had no money, the result would have been very different.
Many people agree about what they do with their assets – the family home, bank accounts, investments, etc – and do not appreciate the importance of getting that agreement enshrined in an order. If there is no Court Order, the agreement is not necessarily final or binding and many people find the failure to involve a good family lawyer to finalise matters properly carries a heavy price tag at a later date, when their ex comes back for more.
If parties cannot reach an agreement, one party should make an application to the court to initiate financial remedy proceedings in order to obtain a Court Order. There is no time limit for a divorcee to bring a claim against an ex-spouse (although remarriage impacts potential claims).
So, whilst a divorce will dissolve a marriage, in and of itself it will not deal with financial claims couples may have against each other. Mr Vince’s experience should be a stark warning to all divorcees: you must ensure that you have a Court Order finalising your financial settlement. Unless you do, you may find skeletons emerging from your closet at the most inconvenient of times.
Although correct at the time of publication, the contents of this newsletter/blog are intended for general information purposes only and shall not be deemed to be, or constitute, legal advice. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of this article. Please contact us for the latest legal position.