We are often asked, ‘are the arrangements over divorce finances automatically concluded upon Decree Absolute’? The answer is no.
A common misconception over divorce finances
Even if the parties to a marriage do not have any significant assets or income, it is essential that the financial arrangements are also approved by the Court. Until this happens there is not a full, final and binding agreement and either ex-spouse could make a claim against the other, even decades after the Decree Absolute.
In recent years there have been a number of high profile divorce cases where ex-spouses did not secure a clean break order which was approved by the Court at the time of the divorce and their ex-spouse then successfully sought a lump sum payment or ongoing maintenance. Very often people think that because they have reached an informal agreement with their ex-spouse as to how assets such as the family house should be divided, it is not possible for their ex-spouse to seek a change in the future. This is not correct. Unless the Court has approved the arrangement, either of them could seek an adjustment in the future.
This can be particularly relevant if their financial circumstances have changed since separation (for example if they have received an inheritance, or the value of their assets, or income has increased). In these situations, the person who has benefitted from the change in circumstances could find themselves facing a financial claim from their ex-spouse for a lump sum payment, maintenance or other financial provision.
Finalising financial arrangements with the Court
If an agreement has been reached between the parties, it can be relatively in-expensive to arrange for a Consent Order to be made by the Court to finalise those arrangements. It can provide certainty and security for the future.
If you are contemplating separation from your spouse and want to discuss financial arrangements, or are already divorced but the divorce finances have not been approved by the Court, it is important to take specialist advice as soon as possible.