Published: 11 April 2016
It is commonly believed that when a couple divorce their financial ties are severed. This is not the case. Whilst the final decree of divorce, known as Decree Absolute, legally dissolves the marriage, it has no effect over the finances.
The importance of obtaining a financial order on divorce was highlighted by a case that was widely reported in the media last year–Wyatt v Vince – which concerned a husband and wife who had married in their early twenties and had one child together. The couple separated after only two years of marriage and divorced in 1992 but did not obtain a financial order. Over 10 years after their separation, the husband started up a green energy company that became a very successful multi-million pound business. The wife continued to live relatively modestly and made no contribution at all to the husband’s business. In 2011, the wife issued an application to the Court for financial provision. The case came before the Supreme Court last year which found that the wife’s case should be heard.
What does this mean?
Although a decision has yet to be made regarding the wife’s financial provision and it is unlikely (despite being indicated in the media) that she will be awarded a significant share of the husband’s wealth, the case clarifies that there is no timelimit for an ex-spouse seeking orders for financial provision following divorce.
How to terminate claims
A financial order should be made on divorce dismissing financial claims.Without an order of this kind, there is always the risk of future claims being made because a couple’s finances become ‘tied’ on marriage and the only way to sever them is to terminate claims under a binding court order – although remarriage may also bring an end to financial claims.
Whilst the circumstances of the case of Wyatt v Vince are relatively unusual, it serves as a warning that without a financial order, an ex-spouse can bring a claim against the other’s finances at any time in the future and may be advised to do so, particularly if assets, such as property or shares, have increased in value significantly, or if they have had a ‘windfall’.
Who should seek advice on this issue?
Anyone currently in the process of divorce would benefit from advice on how to deal with finances and, ideally, they should seek an order during the divorce. However, anyone who is already divorced, but does not have a financial order in place would also be strongly advised to seek advice to combat the risk of future claims, as would those considering remarrying.
If you would like further advice on this issue then K J Smith Solicitors are here to assist. Our team of family law experts and trained mediators can help you understand the options available to you and the best course of action to take, with the aim of resolving your matter in the most amicable way possible.
For more information, or to arrange a free 45 minute consultation with a member of our team, please contact
K J Smith Solicitors today on 01491 630000 (Henley on Thames), 020 7070 0330 (London), 0118 418 1000 (Reading), 01753 325000 (Windsor), 01256 584000 (Basingstoke) or 01483 370100 (Guildford).
This article was written by Amy Maher.