In almost all divorce cases, there are two elements to be dealt with. The first, and perhaps the most obvious is the divorce itself. In very simple terms, this is the dissolution of the marriage or civil partnership. However, this does not deal with or finalise the financial settlement, nor does it make provision for any assets or property to be passed between spouses.

In order to provide for financial security after the divorce and to prevent either party brining any future financial claims against the other, it is imperative that the financial settlement is finalised at the same time as the divorce. If the financial agreement is ignored, it can have serious consequences for both parties later down the line.

The media recently reported a high profile case involving the owner and founder of the well known fashion line, Lambretta. Mr and Mrs Briers were married for 18 years and had three children together. When they met, Mr Briers was a teacher but set up the fashion company from the garage of the former matrimonial home.

In 2002, the parties separated and since they parted, the business turnover grew to £30 million. Upon divorce in 2005, the Wife received £150,000 from her husband so that she could clear the mortgage and keep the family home. She also received maintenance for herself and child maintenance for the children.

At the time the money was transferred and the agreement was reached, it was nothing more than a verbal agreement between Mr and Mrs Briers. They did not have the settlement drafted into a formal, legally binding document which was approved by the Court and Mr Briers said he did not want to drag matters through solicitors.

In the absence of a binding agreement, Mrs Briers was able to bring a claim in the matrimonial courts some 10 years after the divorce. Last year, the judge awarded her £2.7 million of her ex-Husband’s £10 million total wealth. The judge made reference to the fact that there had been no financial disclosure and that the Wife had made a substantial contribution to the family in being the home maker and primary carer, allowing the Husband to build up the business.

Mr Briers is appealing this decision so we are yet to see what the final outcome will be. This case reiterates the absolute importance of dealing with the financial settlement at the same time as the actual divorce and the need to ensure that all assets are properly valued and fully disclosed.