Why you should sort finances on divorce sooner rather than later

Divorce itself is not the end of the story when it comes to reaching a financial settlement. You may have recently heard about a case in the news brought by Ms Wyatt against her former husband, Mr Vincent, some twenty years after their divorce. When the parties divorced they were penniless new age travellers. Years after their divorce Mr Vince acquired a multi-million fortune and Ms Wyatt made an application for a settlement of £1.9 million. This case concerns ‘big money’ but what are the implications for ordinary every day mortals ?

Many assume when they divorce that the court automatically makes a financial settlement or once divorced future financial claims against each other cannot be made. This is not the case. A claim can be made at any point in the future even after parties are divorced whether that happens to be two years or twenty years later. The only exception is where the claimant has remarried. About 50,000 divorces happen each year without any financial orders being made and therefore a lot of people could be exposed to this type of claim .

Someone could find many years after they were divorced their former spouse makes a claim when they come into some money such as an inheritance or after a lottery win. The right to make a claim does not necessarily mean a claimant will succeed but the possibility always remains.

It is far better to sort finances near to the point of divorce rather than years later. This is because circumstance change and life will move on. House prices go up, new partners come along, new children arrive and matters can become complicated and very expensive to resolve if left. Some going through divorce are reluctant to sort finances preferring to do it at some point in the future when the children are grown up for instance. Why bring back the stress of the divorce years later when everyone thought they had moved on with their lives only to revisit matters again.

To prevent claims being made at any stage in the future a separate court order within the divorce is required. In mediation parties can negotiate a financial settlement with the help of a family mediator. The mediator will help the parties to consider what they need to take into account and will draw up a memorandum of understanding to reflect their proposals which can be turned into a court order.

After mediation has completed one of the parties will need a solicitor to draw up the draft consent order in legal terms so that it is unambiguous and will be acceptable to the court. Usually this should be no more than a few hours of work for the solicitor as all the ground work and negotiations will have been achieved in mediation. Generally the order is obtained by post so no one has to attend court and divorcing parties obtain a consent order as it is by agreement.

A consent order recording an agreement reached in mediation will give peace of mind. It will give security, knowing that agreements can’t be overturned or revisited in the future and everyone can move on with their lives.

Jane Busby is a family mediator and the director of Accord Family Mediation: www.accordfamilymediation.co.uk and a divorce coach at www.janebusby.com