During divorce, marriage annulment, a judicial separation, or the dissolution of a civil partnership, there is likely to be a need to settle disputes over money or property. The Court can settle this and can make a financial remedy order. These orders include dealing with the arrangements for the sale or transfer of property, maintenance payments, a lump sum payment or the sharing of pensions. However, there is no legal requirement for the Court to make a financial remedy order.
In practice this means that many people come to an agreement directly together or in fact do not address these issues at all.
You should, however, be aware that unless you reach an agreement which is approved by the Court as part of the divorce, that you and your ex partner remain financially linked together and that this is forever and can even extend beyond death.
It is therefore essential to make sure that any financial agreement that you reach with your ex partner on divorce is the subject of an application to Court for approval. This does not mean that you will have to go to any Court hearings. The Court can review the agreement you have reached on paper or via an online application and make a decision. In deciding whether to approve any agreement you have reached together with your ex spouse the Court must decide whether that agreement is fair and reasonable. If the Court accepts that the agreement you have reached together is fair and reasonable, then the Court will adopt your agreement and it becomes a Court order. A Court order is legally binding and enforceable. This means that if one party does not do what they have agreed to do, then the other party has the ability to ask the Court to enforce that agreement against the defaulting party. If your agreement provides for a clean break, the court order will make that agreement legally binding so that your ex partner cannot make a financial claim against you in the future.
If you do not have a legally binding financial agreement on divorce then you remain financially linked to your ex spouse, even after the divorce has been concluded with the pronouncement of the Decree Absolute. This means that if you inherit or buy a property or win the lottery then there is a real risk that your ex spouse could make an application to Court for a share in these assets. That could be many years after you have divorced, or even make a claim against your estate following your death.
For all these reasons it is essential to come to an agreement to resolve the financial aspects of your divorce and then have this approved by the Court to become legally binding and enforceable. That way you avoid the risk that your ex spouse may one day in the future come knocking, asking for a share of your new home, inheritance or lottery win.
If you would like to discuss any of the issues in this article then please contact one of our specialist family law solicitors.