Financial commitments don’t end with divorce

Financial commitments don’t end with divorce

Contrary to popular belief, your financial commitment to your ex-partner (wife, husband or civil partner) does not end with a ‘Decree Absolute’.

Even if you discuss matters amicably with your ex-partner and decide what happens to your wealth and assets your financial commitments to each other will not end until you legally formalise the arrangement by way of a Separation Agreement and/or a Court Order.

What is the time limit for a financial claim after divorce?

Regardless of the number of years that have passed since receiving your final order of divorce – the Decree Absolute, there is no time limit to make a financial claim, unless there has been a remarriage, limiting the potential financial claim.

The only way to protect your finances in the future is to legally arrange a ‘clean break’ of your finances.

How could you be affected by a financial claim after divorce?

A good example that demonstrates the consequences of not formalising arrangements legally is the case regarding Ms Wyatt’s financial claim against her ex-husband Mr Vince, the owner of Ecotricity Group Ltd (valued at £57m).

Ms Wyatt made a financial application for a £1.9m claim against Mr Vince 19 years after their divorce, even though their relationship had actually broken down 31 years prior to the court hearing the application.

This case was taken all the way to the Supreme Court on appeal at great expense to both parties. Although it was agreed – “the Supreme Court unanimously allowed the wife’s appeal” Lord Wilson in his Supreme Court judgment noted the ‘formidable difficulties’ that the wife had in pursuing her financial application:

  • The marriage had broken down 31 years prior.
  • The marriage had lasted no more than 2 years.
  • The living standards during the marriage could not have been lower.
  • Mr Vince’s wealth was not created until 13 years after the breakdown.
  • Ms Wyatt had not made direct or indirect contributions to the wealth created.

In the Supreme Court, Lord Wilson concluded:*

“The wife asserts needs, both for a better home for herself and her family and, in the light of the severe limitations on her earning capacity, for a fund out of which to maintain herself for the rest of her life. These, with questionable forensic wisdom, she quantifies at £0.55m for the home and £1.35m for the fund, and thus at a total of £1.9m. Even at this stage one can say that, in the light of the negatives, an award approaching that size is out of the question.”

The court judgement was to award Ms Wyatt £300,000 of Mr Vince’s assets from which she was to pay her outstanding costs liability, once known.

From this example you can see the importance of obtaining a court approved ‘clean break’ financial order at the time of divorce. Here at Courmacs, we are Accredited Family Law Specialists. We can help you to protect your current and future wealth, including inheritance, and avoid the personal cost in time and stress and the legal costs of protracted litigation.

*Source: Wyatt v Vince [2016] EWHC 1368 (Fam)

This article is for general information purposes only and does not constitute legal or other professional advice. Please contact us to seek specific legal advice.

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