Money advice in separations: Avoid costly divorce mistakes with a financial order, Yorkshire lawyer warns

Look after your money in divorce proceedings – getting a financial order is imperative, says Noelle Heath. Submitted picture.

There are many common mistakes people make when getting a divorce.

Not getting a financial order at the same time as divorce proceedings can be one of the costliest — according to Noelle Heath, Head of Family Law and partner at Morrish Solicitors.

It is an error a lot of people make. Heath says: “Roughly 60-70% of new clients I see are not aware of the need to make a financial order. They do not understand initially that finances are dealt with separately to the divorce itself.”

This means that you can be legally divorced whilst still being financially linked and having financial obligations to your ex-spouse. Without having a financial order in place which records the terms of agreement in respect of the distribution of the assets on divorce and which also dismisses any claim that either spouse may have against the other in the future, your former spouse could make a financial claim against your assets at any time and several years after the actual divorce.

Heath continues: “If you have reached a financial agreement with your ex-spouse, it is very important to have those terms put into a financial order agreed by you both and approved by the court to provide the necessary legal protection to you.”

When negotiating a financial settlement, it is important that both of you have a good understanding of what the matrimonial assets are and what they are worth — from the marital home to pensions, savings, and investments. This will ensure that any agreement reached is fair to you both.

Pension pots

Pensions are often overlooked by spouses when separating, especially when they do not have a solicitor advising them. Not obtaining pension valuations for both spouse’s pensions and then not sharing or offsetting them against other assets of the marriage can be a costly mistake. This can particularly disadvantage women who are more likely to have worked part time or been unemployed and have therefore made less pension contributions to any private pension or have been less likely to qualify for any workplace pension.

Remarrying

It is also wise to make sure your financial affairs are in order before remarrying. Heath says: “You need to be aware that when you remarry without making a financial order you may lose the right to apply for one. This means that you will not be able to make a claim for distribution of the assets from your previous marriage which you may have been entitled to.”

Child maintenance

Often people are tempted to offer their ex a larger share of the matrimonial assets in return for a promise from them not to claim child maintenance payments. Heath advises against this: “Even if you made such an agreement your ex could claim child maintenance payments from you at any time — which you would have to pay.

“You would not be able to renegotiate the terms of the financial order that you agreed to, in order to get your share of the assets back. I would never advise any off-setting of assets against future child maintenance payments.”

Peace of mind

Divorce can be a difficult and costly business. At Morrish Solicitors, a financial order can cost from as little as £700 + VAT, depending on how complicated the financial situation is. When compared to what you could stand to lose if your finances are not properly sorted, this is a small price to pay for peace of mind.

For more information on financial orders or any aspect of family law, contact Morrish Solicitors on 033 3344 9600 or email [email protected]