Warning – the pitfalls of a DIY divorce without a Financial Order

Warning – the pitfalls of a DIY divorce without a Financial Order

I was delighted with the introduction of the no-fault divorce procedure which allows married couples to divorce without assigning blame. This removal of the “blame game” from the divorce process reduces the risk of acrimony from the divorce overspilling into the important matters that run alongside the procedural mechanism for dissolving a marriage, namely the arrangements for any children of the marriage and the financial aspects of the relationship breakdown. 

I campaigned as a member of the Family Law organisation Resolution for the recent change in the law, (which included a day of “lobbying” in the Westminster Parliament), as such I need to stress at the outset of this article that I have no regrets whatsoever regarding the introduction of no-fault divorce. The purpose of this article is merely to dispel some myths and to ensure that divorcing couples are better informed about the potential pitfalls of not obtaining specialist advice from a matrimonial lawyer alongside doing their own divorce online. 

The Myths

Myth 1 -  A divorce alone puts a stop to any potential future financial claims 

  1. It is a common and potentially very costly misconception that the Final Divorce Order (previously known as the Decree Absolute) automatically brings financial claims by an ex-spouse to an end. This is a very dangerous myth and needs to be firmly debunked. It is extremely important for divorcing couples to understand that financial claims can only be brought to an end in two ways: 1) Through a Final Financial Order with a “clean break” provision – the clean break provision ensures that neither party has the ability to pursue future financial claims against the other or against each other’s estate upon death, or 2) A party falling in to the “re-marriage trap” – by obtaining the Final Divorce Order (without making an application for a Financial Order either via their Divorce application or via a standalone Form A financial application commencing Court proceedings) and re-marrying so as to be subject to the statutory bar preventing them from pursuing certain financial claims against their ex-spouse.   

Myth 2 – An agreement between the parties years or even decades ago puts a stop to any future financial claims. 

  1. It is a common myth that if a divorcing spouse does not have any significant assets at the time of their divorce they cannot be pursued for a financial claim by their ex-spouse in the future. My heart sinks when a client informs me that at the time of their divorce (often 10 or 20 years ago) they did not have any significant assets so did not need to get a “Court Order” or they reached an “agreement between themselves” whereby for example one party transferred a heavily mortgaged former family home to the other party (at a time when there was very little equity in the property or even potentially a negative equity situation), and they are facing seemingly “out of the blue” their ex- spouse making a financial claim against them years later. Often with these clients their financial circumstances have improved significantly with the passage of time for example through hard work and career progression, through a windfall such as a lottery win or inheritance receipt. Whereas in stark contrast often the ex-spouse looking to pursue financial claims some years down the line is doing so because they have financially struggled, fallen on hard times for example due to health issues, or sacrificing their career progression to raise the children of the marriage. Unlike other areas of the law there is no “limitation period” for matrimonial financial claims and the mere passage of time does not automatically prevent an ex-spouse from pursuing a financial claim 10, 20 or even 30 years down the line as was the situation in the well reported case of Vince v Wyatt. 

Myth 3 – Getting specialist independent legal advice from a Solicitor is too costly

  1. It is a misconception banded around that “lawyering up” in a “straightforward” small money divorce is too costly. This is misleading, because a failure to get specialist independent legal advice tailored to an individual’s specific circumstances, including advice in respect of  a “clean break order” preventing either party from making future financial claims against the other in life and against their respective estates’ on death could result in very costly and expensive litigation potentially a number of years down the line. For example the costs of a Solicitor assisting with the drafting of a “clean break consent order” are likely to be minuscule compared to the costs faced if an ex-spouse (who may have fallen on hard times) pursues financial claims against their former husband or wife (who may have had a windfall, such as a lottery win, significant inheritance etc.) resulting in fiercely contested full blown financial remedy proceedings years/potentially decades after they divorced. 

The real risks (and significant financial implications)

To be blunt, if you are going through a divorce and do not seek specialist legal advice regarding a final “Clean break” financial Order (either by “consent” following an agreement being reached between the parties or via a Court’s determination at the conclusion of Financial Remedy proceedings) you are potentially storing up serious trouble for the future if you are the financially stronger party at the time of the divorce or if you stand to improve your financial circumstances in the future, for example via:

  • A promotion at work and general career progression
  • A receipt of a significant inheritance
  • The significant growth in long term investments
  • The passing down of a family business (e.g., a farm) to you
  • The growth in a pension
  • A lottery win or other unexpected financial windfall
  • Paying off the mortgage on your home/combined with an increase in the property value over time. 

The trouble you are storing up for the future is that if your ex-spouse in contrast falls on hard times (potentially years after the divorce) and is financially struggling they are likely to get wind of the fact that you may be in a better financial position (via Facebook posts for example) and their family and friends will more than likely nudge them in the direction of a lawyer and you will face a potential financial claim against any remaining assets of the marriage and even a claim against “post-separation” assets if there is insufficient value in the matrimonial assets to meet you ex-spouse’s financial “needs” (such as their need to have the security of suitable housing, e.g. their mortgage paid off if they are close to retirement). All those years of building up your nest egg for retirement could then be jeopardised by stressful, costly and often bitter Court litigation years down the line. 

The action divorcing couples should take to safeguard against the “myths” and “risks”

If doing your own DIY divorce online get bespoke advice from a specialist matrimonial finances solicitor regarding how best to resolve the financial aspects of the divorce. Most Solicitors offer an initial consultation at a reduced rate (such as “30 minutes free”) and in the initial consultation they can identify the best course of action to safeguard you for the future, which will include them advising you in respect of the option of a straightforward “Clean break consent order” preventing either party from pursuing financial claims against each other years down the line. 

Please contact us if you need anymore information.

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