Formalising Your Separation
November 13, 2024 3:32 pm - Categorised in: EFN-News, Family
The imminent arrival of a new year can often bring some renewed focus and momentum to progress the tasks and life admin that you have been putting off from the previous year. One of those ‘to-do’ items might be formalising your separation.
When a couple separates there can be many reasons why they may put off Divorce proceedings and formalising arrangements for the matrimonial finances. For some couples, it can seem all too much. Just dealing with the emotions of the situation and practical arrangements on a day to day basis can take all of a person’s strength and focus and they just can’t face going down the “legal route”.
Some couples may still be amicable and one party may not want to mention Divorce through fear of “rocking the boat”. Or it might be that you have managed to reach an agreement about matters and don’t see the need to proceed with a Divorce application or a formal document to record the financial split. However there are some very good reasons why it may be more favourable to consider taking these steps sooner rather than later:
- Divorce is a lengthy process
Whilst the Divorce process has been streamlined with the introduction of No-Fault Divorce, even the most straightforward Divorces will still normally take in the region of 7 months to conclude after allowing time for the application to be issued and responded to and allowing for the mandatory waiting periods that the Court imposes. Therefore whilst you may not want to be Divorced immediately, will that still be the case in 7 months time?
- The need to make your financial settlement legally binding
Although you may have been able to agree how your assets will be split between the two of you, without a Consent Order from the Court this agreement is not legally binding. This means that either party could back out or change their mind, either now or at some point in the future.
For example, you may have decided to sell the family home and split the proceeds equally between you, but when it comes to completion the other person may change their mind or decide that they want a different split of the equity.
Even after money has been distributed as per your agreement, without a Court Order containing a Clean Break provision, the other party may decide to make a claim against you and your other assets in the future. By that point your financial position may have changed. You may have inherited money or purchased a new property and without a Clean Break the Court will need these assets to be disclosed so that they can be considered as part of the financial settlement. By dealing with the matter now, you can obtain that Clean Break, preventing further claims and giving both parties peace of mind for the future.
- The value of your assets may change
Parties very often decide that they will leave the issue of the financial split and deal with this later down the line. What many fail to consider however is the implications of dealing with assets at a point in the future. Some assets which may be subject to a potential split may increase in value. A typical example is a pension pot. A party may continue to pay into that pension, growing and increasing it, without realising that if this pot is subject to a pension share in the future, their ex spouse may also gain a share of the growth that has occurred post separation if they have failed to deal with the financial settlement at the time of separation.
- Your relationship with your ex may deteriorate over time
You may start off being quite amicable with your ex, but over time it is not unusual for this to deteriorate. One party may meet a new partner, and this might be very difficult for the other party. It might be that you go in different directions financially. One party might have a promotion at work or receive some inheritance whilst the other suffers redundancy. Trying to negotiate a financial settlement in those circumstances can be very challenging and parties in these situations often wish they had addressed matters sooner rather than later.
If you have separated but have not formalised the financial settlement and would like to find out more about how you can do this, please contact Joanne Wilbraham or Charlotte Davis in the Family Law team.
A shorter version of this article will appear in the January 2025 edition of Derbyshire Life magazine.
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