Do My Financial Obligations End On Divorce?

Do my financial obligations end on divorce?

The fact that many people are not aware of is that divorce alone does not automatically deal with financial issues. Marriage is a financial commitment for life and unless a court order ends these obligations, they remain. This means that a former spouse could make a financial claim long into the future if matters are not finalised at the time of the divorce.

Some individuals who have failed to deal with financial matters on divorce have had to pay out substantial sums to their former spouse after many years. This includes individuals who have gone on to become wealthy from setting up a successful business or even from winning the lottery.

By dealing with financial issues on divorce, this can generally be avoided. 

 

Separating finances on divorce

When you marry, your assets become matrimonial assets. On divorce, all of a couple’s assets will be taken into account when working out how much each will have. This includes property owned by one party before marriage and savings, investments and pensions.  If the court is asked to make a financial order, its starting point will usually be an equal split of the available assets. However, if the marriage was only a short one and one party had substantially more wealth than the other before the marriage, this could be taken into account and they could retain a larger share. The court will always try to make sure that the needs of both parties are adequately met, however.

There is a checklist of points that it will consider in making an order, as follows:

• The income, earning capacity, property and financial resources each party has or is likely to have in the foreseeable future
• The needs, obligations and responsibilities of each party, including in the foreseeable future
• The standard of living enjoyed during the marriage
• Any physical or mental disabilities either party has
• The contributions made by each party, such as childcare and looking after the home, to include in the foreseeable future
• The value of any benefit that either party would lose the chance of acquiring because of the divorce
• The conduct of the parties, if it would be inequitable to disregard this

 

Is it necessary to go to court to resolve financial issues on divorce?

The court prefers that the parties resolve matters between themselves wherever possible. Your solicitor will represent you in trying to work out an agreement, negotiating on your behalf where necessary. To deal with this, you and your spouse will have to make full disclosure of all of your assets to each other. If an agreement is reached, this can be put into a consent order for approval by the court.

If it is not possible to reach an agreement, you will usually be advised to consider alternative dispute resolution. This includes options such as mediation, collaboration and arbitration. They are generally quicker and more cost-effective solutions than litigation. Where a solution cannot be found, then the court can be asked to decide and it’s important that you take legal advice at the earlier opportunity.

 

Contact us

If you would like to speak to one of our expert family lawyers, ring us at 0800 015 0340 or email us at family@chadlaw.co.uk