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When time does not heal – financial remedies on divorce and delay

Thinking about, communicating, negotiating, making decisions about property, maybe a business, savings, where you will live and on what, pensions and your life in the future may seem overwhelming, even impossible at a time of great turmoil and distress.

It is of course important to take stock and to not make life changing decisions about the future in a rush or when emotions are running high.

However delay can have important and sometimes devastating consequences.

No time limit on Financial Claims

In general there is no time limit on when a financial claim can be made during or after a divorce, even after decree absolute.

A verbal ‘understanding’ or even a written agreement noted down between the parties themselves will not terminate financial claims.

Remarriage

Prevents the person who has married applying to the court for an order for most financial provision. Claims begun before the remarriage can still be concluded. Remarriage does not however end the ability of the remarried spouse to make claims against the pension of the former spouse.

The former spouse who has not remarried can still pursue claims against the other.

The new spouses’ finances are likely to have to be disclosed and may be relevant to the eventual outcome.

If spousal maintenance is being paid voluntarily or by court order it will end on the remarriage of the recipient. Payment does not end on the remarriage of the person making the payments. Living with a partner as opposed to remarriage does not automatically end spousal maintenance.

Delay

In the midst of a divorce it may be hard to envisage that life could look very different in the future.

However the value of what you do have, your home for instance can increase, you may pay off or reduce your mortgage, you may meet someone else, live together/remarry, get a better job, be made redundant, suffer ill health, inherit – any of these circumstances could impact on your financial position and/or that of your former spouse.

When a financial claim is made the court is not required to restrict claims or the value of assets, income or pensions to the date the parties separated or divorced.

The relevant value is the value at the time of the claim.

Delay and the change in circumstances personal and financial may be a relevant factor but there is no rule that defines how the court will treat these points.

There may be particular situations where delay is important and may be beneficial – for example waiting to see how an investment will perform or what bonus will be paid. But for most people delay and long delay is rarely a good idea.

In the case of Wyatt v Vince 2015 the parties were married in 1981, Ms Wyatt having a daughter from a previous relationship. A son was born in 1983 and the parties separated in 1984. Ms Wyatt lived in difficult financial circumstances raising the children and Mr Vince pursued a new age travelling lifestyle.

In 1992 Ms Wyatt formed another relationship and had 2 more children. She divorced Mr Vince. No financial orders were made.

Mr Vince remarried and began to build a green energy business which in 2011 was worth £27 million.

Ms Wyatt, not having remarried was able to pursue financial claims for a lump sum, living at the time in a local authority property on state benefits.

Mr Vince applied to the Court to strike out her application due to delay.

The Supreme Court allowed Ms Wyatt’s application although recognised she would face considerable difficulties due to the 31 years which had passed since the breakdown of the marriage, the low standard of living during the marriage, the wealth creation was 13 years after separation and Ms Wyatt had made no contribution to the business.

Although the facts are unusual, it is a cautionary tale for anyone who thinks they do not need to deal with their finances at all, who reach an informal agreement which does not dismiss future claims or think that having only modest means does not warrant any further action.

Although a considerably shorter delay involving a financial claim in this country, following an overseas divorce, in Z v Z 2016 a delay of 5 years did not prevent the wife making a financial claim although the delay was likely to be reflected in the outcome.

The only way future claims can be prevented is by a court order dismissing those claims. An order can be made by agreement (a consent order), and can include either a financial settlement or where appropriate simply dismiss future claims.

It is essential that legal advice is taken before financial claims are dismissed and the decision to do so should be founded on financial disclosure and advice. Once dismissed, claims cannot be revived. Agreeing to make no claims without proper advice could leave you financially high and dry.

Don’t leave the future to chance – if you are or have separated, whether or not you plan to divorce in the future, we can discuss what steps need to be taken to resolve financial claims including whether in your circumstances it would be appropriate to dismiss any or all of your financial claims or those of your spouse.

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