Do I Need A Divorce To Have A Financial Settlement?
Not everyone wants a divorce. In her latest blog, Jessica Barnett discusses whether you need to apply for a divorce to have a final settlement of the financial side of your marriage…
There are various reasons why couples may not want to actually get divorced, even though they have accepted that their marriage has broken down and they do want to separate, or they have separated.
The divorce law changed in April 2022 and parties no longer need to blame one another for the breakdown of the marriage or wait for a period of time after separation before they can divorce. However, there are many other reasons why people don’t want to apply for a divorce. These may, for example, be for religious reasons, or simply that couples don’t like the idea of a divorce or aren’t ready to take that step.
Do I Need A Divorce To Have A Financial Settlement?
Negotiating a financial settlement without Court proceedings is exactly the same whether you are getting divorced or not. Lawyers and family mediators consider the same issues, such as the resources and needs of the parties and any children as well as the overall fairness.
Do I Need To Go To Court To Reach A Financial Settlement?
Negotiating a settlement is a far better way of resolving financial claims than going to Court. Bill and Melinda Gates, with all their millions, did just this. They may still have paid a lot of money to the various lawyers they had to help them divide those millions but they must have saved much more than that by not going to Court.
Negotiations can take place in various forms, such as discussing the settlement between you, going to mediation or having the help of a family lawyer.
If A Financial Agreement Is Negotiated What Can Be Done To Make It Formal?
Bill and Melinda Gates apparently had a separation agreement. A separation agreement is a contract made between the two of you and it sets out the what you have agreed for the division of your finances.
A separation agreement can also include matters that can’t be included in a financial Court order, such as arrangements for the children, setting out the time that they will spend with each of you etc. They can be very flexible and meet the specific requirements of the couple and their family.
It is better than just having a verbal agreement or a letter confirming the agreement, even a solicitor’s letter. This is because it is a valid contract that is recognised by the Courts. If your spouse fails to keep to any terms of the agreement then you could ask the Courts to enforce it as a contract. A verbal agreement or letter is not a contract so there would be no legal action you could take or it could be difficult to prove what was intended.
Will A Separation Agreement Make A Settlement Final?
Although a separation agreement is a contract, it is not a Court order, so it does not provide finality. Theoretically, a separation agreement can be changed and further financial claims can be made up until the time a Court order is made confirming the settlement. Such an order can only be made by the Family Court alongside a divorce.
Having said that, provided the agreement is drafted correctly and meets certain conditions then it would be considered as good evidence of the agreement that had been reached if it was challenged in Court. A separation agreement needs to:
1. Be entered into voluntarily and not under duress;
2. Confirm that you have both given full financial disclosure. This shows that you each know what assets the other has; and
3. Set out a settlement that itself is fair and provides for both parties’ needs and those of the children of the family.
It is a good idea to have the separation agreement drafted by a family lawyer even if you have reached the agreement yourself. This is to ensure that it is correctly drafted and that nothing has been missed which could cause you problems later on. Having the agreement expertly drafted could save you a lot of money later.
What If You Do Divorce In The Future?
The terms of a separation agreement can be converted into a financial remedy order (some people know these as ‘consent’ or ‘clean break’ orders). If this is done, once approved by the Family Court as part of the divorce, this will be a full and final legally binding agreement and one that will prevent either of you from making any further financial claims against each other in the future.
If you need any help or advice regarding a financial settlement, a separation agreement or divorce, please feel free to contact me on 01332 364436 or via email at j.barnett@timms-law.com. For more information visit here.
December 2022