Once I am divorced, my spouse cannot make any financial claims against me – is this true?

Divorce

The law on divorce has undergone significant changes with the introduction of no-fault divorce under the Divorce, Dissolution and Separation Act 2020, which came into effect on 6 April 2022. This reform replaced the previous fault-based system and simplified the process, making it less contentious.

Key Features of No-Fault Divorce:

• Ground for Divorce: The only ground for divorce is that the marriage has irretrievably broken down. There is no need to prove fault, such as adultery or unreasonable behaviour.
• Joint Applications: Couples can now apply jointly for a divorce, promoting a more amicable process.
• Simplified Terminology: The traditional terms have been replaced:
• Decree Nisi is now called a Conditional Order.
• Decree Absolute is now called a Final Order.
• Minimum Timeframe: The process takes a minimum of 26 weeks, comprising:
• A 20-week reflection period after the application is made.
• A further 6 weeks after the Conditional Order is granted before applying for the Final Order.

While the no-fault divorce process removes blame from the legal process, it is crucial to remember that divorce only dissolves the marriage and does not automatically deal with financial matters.

Financial Matters

To ensure financial independence and prevent future claims, financial matters must be resolved and formalised through a Financial Order. This process is separate from the divorce itself.

Types of Financial Orders:

1. Consent Order: If the couple agrees on the division of assets, they can formalise their agreement in a Consent Order. This document outlines the terms of the financial settlement and includes clauses to dismiss any future claims. It must be approved by a judge to become legally binding.
2. Court-Imposed Order: If the couple cannot agree, they may need to go to court, where a judge will decide how assets should be divided.

Importance of a Financial Order:

Without a Financial Order, either party can make financial claims against the other in the future, even years after the divorce is finalised.

A Financial Order provides a clean break, ensuring no further claims can be made once the terms are fulfilled.

Timing:

A Financial Order can only be submitted to the court after the Conditional Order has been granted. However, it is advisable to resolve financial matters before applying for the Final Order to avoid complications.

Risks of Not Resolving Financial Matters

If financial matters are not resolved and formalised through a Financial Order, the following risks remain:

1. Future Financial Claims: Without a Financial Order, either party can make a financial claim at any time, even years after the divorce.
2. Impact of Re-Marriage: If you remarry without resolving financial matters, you may lose the right to make certain claims against your former spouse.
3. Cohabitation: Living with a new partner does not automatically prevent financial claims from being made by your former spouse.
4. Death: If one party dies before a Financial Order is made, it may affect inheritance rights and complicate the distribution of assets.

Ongoing Financial Arrangements

Financial settlements may include ongoing obligations, such as:

• Child Maintenance: Payments for the financial support of children, which are separate from the divorce and cannot be dismissed by a Financial Order.
• Spousal Maintenance: Regular payments to support an former spouse, which may continue for a specified period or until certain conditions are met.
• Property Arrangements: For example, retaining the family home until children reach adulthood or finish education.

These arrangements may have long-term implications and should be carefully considered.

Other Considerations

In addition to resolving financial matters, it is essential to review and update the following:

• Your Will: Divorce affects inheritance rights, so updating your Will ensures your wishes are reflected.
• Joint Tenancy: If you own property jointly, consider severing the joint tenancy to avoid automatic inheritance by your former spouse.
• Tax Implications: Divorce can have tax consequences, particularly regarding the transfer of assets or property.
• Pensions: Ensure pensions are considered in the financial settlement, as they are often one of the most valuable assets.

Takeaway

To achieve a clean break and protect yourself from future financial claims, it is essential to resolve financial matters alongside the divorce process. This involves:

• Negotiating a financial settlement with your former spouse.
• Formalising the agreement in a Financial Order approved by the court.
• Seeking legal advice to ensure all aspects of your financial situation are considered.

While the divorce process itself is now simpler and less adversarial under the no-fault system, financial matters remain complex and require careful planning. Resolving these issues early can provide peace of mind and financial security for the future.

For tailored advice on your situation, you may want to consult a solicitor who specialises in family law.

For more information or advice, please contact Bindu Malkan in our Family Law team.