Divorce is inevitably stressful and in these times of austerity people will often want to settle financial matters amicably and with the minimum of expense. Often they will try to save money by agreing how they are going to divide their assets without consulting a Solicitor.
This presents many potential difficulties.
What does the Law actually say
If you don’t know what the law entitles you to then settling financial matters yourself is very risky. Unfortunately, many people wrongly think they do know what the law says.
Several “big money” cases have been widely misunderstood (largely due to sensationalist reporting in the media) to say that everything has to be divided equally. At best that is a gross over simplification. In most cases it’s completely wrong. Equality is simply the starting point but things such as housing needs, inequality of income and pension assets, disparity in contributions and a variety of other things justify a departure from equality.
In particular, the relevance of pensions (often the biggest single asset in a marriage) is frequently misunderstood. Many people still believe that pensions are “ringfenced” and not capable of being shared. That is not true. What is true is that pensions can only be shared if the Court sanctions an arrangement so an informal arrangement cannot include a pension share.
Even if people do know that pensions can be shared many feel that it is somehow “unfair” to claim against the other party’s pension fund. Most of them have no idea that in many cases pensions are worth more than the family home. Failing to share pensions fairly can result in an affluent retirement for one party and impoverishment for the other.
A recent Supreme Court case shows that leaving loose ends can come back and bite later on.
Mistakes can be costly
The widely reported case of Wyatt v Vince shows what can happen when the door is inadvertently left open.
Ms Wyatt and Mr Vince were married in 1984 and divorced in 1992. They had few assets at the time and so they didn’t bother to finalise their financial settlement in a court order when they divorced. After the divorce, Mr Vince’s fortunes improved dramatically. Last week the Supreme Court ruled that despite the couple having been divorced for 23 years, Ms Wyatt can now bring a claim against him for a financial settlement arising from their marriage.
The amount of the claim has yet to be decided but full account will be taken of Mr Vince’s present financial circumstances not those at the time of the divorce. In other words Ms Wyatt may well succeed in claiming against the wealth that he has generated since they went their separate ways.
Whatever the outcome, the parties have already spent a significant sum on legal fees and will have further large bills before the case is finalised This could all have been avoided if they had made a simple application to Court to have a financial clean break from one another in 1992. How Mr Vince must wish he had expended a modest sum of money all those years ago.
Getting the right advice
The moral of the story is that if you are separating or divorcing, you really can’t afford not to consult a Solicitor.
At BGW we appreciate that money is often tight and we offer specialist advice at a fair price.
If you wish to discuss this further please contact our Family Law Partner Gareth Reynolds.