We’re getting divorced, do I need a lawyer to resolve the finances?
Written by Becky Turnock | Family Team | 14 February 2024
It is a common misconception that when you divorce, the financial links you have with your spouse come to an end. Until you have a Financial Order, either by consent or at the end of Court proceedings, you remain financially linked to your former spouse.
Strictly speaking, you do not have to have a lawyer to assist you with the finances but not using one to assist and advise you could mean that you end up with unresolved financial claims or a Financial Order that does not do what you thought you agreed to.
It is extremely important to resolve the financial claims when you divorce. If you do not, your former spouse may pop up years in the future looking to make claims. If this happens, the Court looks at the assets and liabilities as they are at the time of the application, rather than when you separated. This means that even if you divorced 20 years before, the Court would look at both your and your former spouse’s financial circumstances at the time of the claims being made. As an example, you may have been contributing to a pension for those 20 years and your former spouse could be entitled to a share to meet their financial needs years down the line.
Usually, the best time to resolve your finances (with an approved Court Order) is before the Final Order in the divorce is made by the Court, particularly if pensions are a factor.
The Final Order in the divorce does not prevent Pension Orders being made but can affect the payment of benefits to a surviving spouse. Some pensions include benefits to be paid to a surviving spouse if the pension-holder dies whilst still married. This means that, in the unlikely event that the pension holder dies before the finances are resolved, if the parties are still married, the surviving spouse could still receive that payment even though the parties have separated.
Timing of the completion of the divorce is also important if a Pension Order is made. A Pension Sharing Order takes effect on the later of either:-
The Final Order in the divorce; or
28 days after the date of the Pension Sharing Order
It is important for the Final Order in the divorce to be delayed for 28 days after the date of the Pension Sharing Order to avoid another unusual situation. If the pension holder dies after the parties are divorced but before 28 days after the date of the Pension Sharing Order, the survivor is not a surviving spouse (and potentially entitled to benefits under the pension) and neither do they have an effective Pension Sharing Order. This could be a very unfortunate situation to be in but luckily is one that is avoidable with sensible planning and early legal advice.
Even if pensions are not a factor, it is still important to resolve financial matters which can mean there is a clean financial break between you. This means that neither of you can come back in the future to make claims and you can both move on knowing the past is firmly in the past.
If you can reach an agreement between the two of you directly, or through a form of dispute resolution such as mediation, a family lawyer can advise you and draft a Consent Order to reflect that settlement. The other of you should still strongly consider taking independent legal advice to ensure the drafting reflects the agreement and that the settlement is the right one for them.
Once the Court has sealed the Order, it is very difficult to turn back so it is important to get specialist advice before signing any documentation.
The Family team at Nash & Co Solicitors have extensive experience in dealing with matters arising from relationship and marriage breakdown. If you would like to discuss this in more detail, please call our expert team on 01752 827030 or email family@nash.co.uk.
