Understanding the risks of not finalising your finances
Many people believe that once a divorce is granted, financial ties are automatically severed. Unfortunately, that’s not the case. Without a legally binding financial order, your former spouse may still be able to make a financial claim against you—even years after the divorce is finalised.
Financial remedies order
Under English law, divorce ends the marriage, but it does not end financial obligations. Unless you obtain a financial remedies order—either by agreement (a consent order) or by way of an application to the court—your former spouse can potentially claim a share of your assets in the future. This includes:
- Property
- Pensions
- Inheritance
- Business interests
- Lottery or compensation windfalls
A well-known example is Wyatt v Vince, where a former wife successfully brought a financial claim over 20 years after the divorce, because no financial order had been made.
The Court Process: What to expect if you cannot agree a financial settlement
If you and your former spouse cannot agree on a financial settlement, the court process typically involves:
- Form A – the application to start financial remedies proceedings.
- First Appointment (FDA) – the court sets a timetable and will direct mutual financial disclosure.
- Financial Dispute Resolution (FDR) – a judge helps both parties try to reach a settlement, by giving an indication of what he/she would order if the matter came before him/her for a Final Hearing.
- Final Hearing – if no agreement is reached, the judge will impose a binding decision.
Throughout, the court’s focus is on fairness and the needs of both parties, especially where children are involved.
Alternatives to Court: ADR options
Before going to court, consider Alternative Dispute Resolution (ADR) methods:
- Mediation – A neutral third party, a mediator, facilitates you reaching an agreement.
- Collaborative Law – You and your former spouse work with collaborative solicitors in a non-adversarial setting.
- Arbitration – A private judge makes a binding decision, which can be quicker and more cost-effective than through the court.
These options are quicker, less adversarial, and more cost-effective than litigation.
Tips to protect yourself when agreeing a financial settlement
- Get a Consent Order – even if you agree on finances, formalise it through the court.
- Don’t Delay – the longer you wait, the more of a risk you take—especially if your financial situation improves.
- Seek Legal Advice Early – a solicitor can help you understand your rights and avoid costly mistakes.
- Be Transparent – full and frank financial disclosure is essential for a fair and enforceable agreement.
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