Why Formalise the Financial Agreement in a Divorce?

A surprising number of divorcing couples in the UK fail to sort out their financial affairs properly when they separate. They don’t formalise their financial settlement by getting it approved by the courts and thus leave open themselves or their estates after death to future legal challenges. 

As was highlighted in a High Court case earlier in the year where Christine Munday and Bryan Wall, who divorced in 1974 after a 5-year marriage, had not settled their financial affairs properly. Over 40 years later their former home became the subject of a legal row between Bryan’s estate and Christine which cost tens of thousands of pounds in legal fees and untold stress.



How to Formalise your Financial Agreement

When you do reach an agreement between both parties about your financial affairs, the next step should be to make it legally binding. You do this by making an application to the Court for a Consent Order. This is a legal document that confirms your agreement. It explains how you’re going to divide up assets and when the court approves it - it is legally binding.
FYI it is usually obtained before the divorce is finalised by the decree absolute (it cannot be made before the pronouncement of the decree nisi), or at the same time as the decree absolute, as it is usually best not to finalise the divorce first. Do note that the order will not take effect until the decree absolute.


 
Why are Consent Orders Important for Divorcing Couples?

A consent order in relation to finance is important for a divorcing couple because it effectively draws a line under the financial ties that exist between them.  It means that both parties have formally agreed to the financial settlement, and so cannot go back on the agreement. It is final and most importantly, enforceable so say if one party does not keep to the terms of the settlement the other party can ask the Court to enforce the settlement. The Court can only take enforcement action if the settlement has been incorporated into a court order.
So, this means that consent order is important for divorcing couples because if no such order has been made then, unless they have remarried, either party can go to the court and make a financial claim against the other, even years after the divorce took place as highlighted in the case above Munday Wall case above.



Conclusion

Consequently, we suggest that as a divorcee you tie up all financial elements from your marriage sooner than later by getting a legally binding Consent Order, or you may risk legal challenges decades from now. If you would like to discuss any of the elements raised in this article please contact your local family law solicitors in Olney on 01234 711 701.

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