The introduction of the online divorce service a few years ago has made it easier for couples to navigate the administrative process of ending their marriage. For some couples with straightforward circumstances, completing the divorce application without a solicitor may be perfectly manageable.
However, getting divorced is about more than simply bringing a marriage to an end. The divorce application does not, by itself, resolve financial matters or arrangements for children. Failing to consider these issues can leave you exposed to financial claims or disagreements in the future.
Understanding what needs to be dealt with alongside the divorce can help you make informed decisions and avoid potentially costly and difficult problems later.
The divorce application is only one part of the process
The legal process for obtaining a divorce involves making an application to the court. The online process can make this relatively straightforward.
However, completing the divorce application does not automatically deal with the financial consequences of the relationship.
There may be a range of financial issues to consider, including the family home, savings and investments, pensions, business interests and debts. It is therefore important to understand what financial claims may be available before making decisions about your divorce.
The timing of your divorce and any financial arrangements can also be important. Obtaining the final order that legally ends the marriage does not, in itself, resolve financial claims between former spouses.
Can financial claims be made after divorce?
Divorce and financial settlement are two separate matters.
Even after a divorce has been finalised, financial claims may remain possible unless they have been properly dealt with. This means that simply agreeing between yourselves that neither of you will make any further financial claims may not provide the protection you expect.
A properly considered financial settlement can help provide certainty about how your finances will be divided and, where appropriate, bring future financial claims to an end.
Taking legal advice at an early stage can help you understand what claims may be available to you and what steps are needed to protect your financial position.
Don’t overlook pensions
Pensions can be one of the most valuable assets arising from a marriage, but they are often overlooked when couples deal with their divorce themselves.
Pensions can also be complex. Their value and the way in which they can be divided will depend on the circumstances, and in some cases specialist pension advice may be required.
An agreement that simply allows each person to keep their own pension may appear straightforward, but it does not necessarily result in a fair overall division of the matrimonial assets.
This is why pensions should be considered alongside the other assets and liabilities when reaching a financial settlement.
Why financial disclosure matters
Before agreeing how your finances should be divided, it is important that both parties have a clear understanding of the family’s financial position.
This will usually involve financial disclosure covering assets, liabilities, income, pensions and other relevant financial interests.
Without a full understanding of the financial picture, it can be difficult to assess whether an agreement is appropriate or fair. There is also a risk that significant assets or liabilities are overlooked.
Reaching an agreement without proper financial disclosure may therefore create problems further down the line.
Making your financial agreement legally binding
Some couples agree between themselves that they will not make any financial claims against one another following divorce.
While an agreement reached between you may provide a useful starting point, it is important to consider whether it should be made legally binding.
A consent order can record an agreement reached between you and, where appropriate, can include a clean break, bringing certain financial claims between you to an end.
The terms of any financial agreement should be carefully considered and properly drafted. This can provide greater certainty and reduce the risk of disputes arising in the future.
The family home and tax considerations
For many couples, the family home is their most significant asset and deciding what should happen to it can be one of the most difficult aspects of a divorce.
Options might include selling the property, transferring ownership or one person buying out the other’s interest. Each option can have different financial and practical consequences.
There may also be tax implications when dealing with property and other assets. These should be considered before an agreement is finalised or a transaction takes place.
Taking advice at the appropriate stage can help ensure that the wider consequences of any proposed financial settlement are understood.
What about children?
Arrangements for children are separate from the divorce application and should be considered alongside the process of separating.
Parents may need to agree where children will live, how they will spend time with each parent, arrangements for holidays and special occasions, and how important decisions about their upbringing will be made.
Child maintenance is also a separate consideration
Many parents are able to agree arrangements between themselves. However, where communication is difficult or there is disagreement about the children’s arrangements, early advice can help parents understand their options and avoid disputes escalating.
When is legal advice particularly important?
Every divorce is different, and some couples may have relatively straightforward financial circumstances. However, legal advice can be particularly valuable where there are:
- significant pensions
- property or multiple properties
- business interests
- investments or substantial savings
- overseas assets
- significant differences in income
- substantial debts
- inheritance or other potentially disputed assets
- disagreements about the financial settlement
- concerns about whether full financial disclosure has been provided.
Even where you intend to reach an amicable agreement, independent legal advice can help ensure that you understand what you are agreeing to and what the long-term consequences may be.
Getting legal advice
An online divorce can make the administrative process of ending a marriage easier, but it does not necessarily resolve the financial and practical issues that arise from separation.
The greatest risk of a DIY divorce is not necessarily completing the divorce application yourself. It is assuming that, because the divorce has been finalised, everything else has been dealt with too.
Obtaining advice at an early stage can help you understand your options, identify the issues that need to be addressed and put appropriate arrangements in place.
How We Can Help
If you are considering divorce, one conversation with our Family Finance team at TV Edwards can help you understand the options available to you and the steps you may need to take. Early advice can help you make informed decisions and avoid potentially costly problems in the future.
To speak to one of our family law specialists, call 020 3440 8000, email enquiries@tvedwards.com, or complete our online enquiry form.
