When a couple marries, in the eyes of the law they become a single financial entity. In literal terms, what’s yours is mine and what’s mine is yours.
Should that couple divorce in the future, many assume that their finances will automatically become separated, and from that point they have no financial connection to their ex-spouse.
The reality, however, is not so simple. If a couple divorces without reaching a legal financial settlement, the financial relationship will remain.
If you are divorced but do not have a legal financial settlement in place, you may be able to act now to protect your financial future. This guide explains how long after a divorce a financial settlement can be made, what’s included and why they are important after divorce.
What is a divorce financial settlement?
During a divorce, it is advisable for the parties to reach an agreement as to how any matrimonial assets and debts will be divided. Typically, this might include:
- Property
- Vehicles
- Savings
- Pensions
- Inheritances
- Stocks and shares
- Business interests
- Joint credit cards or personal loans.
If the parties reach a financial settlement that they both consent to, the court will make what is known as a Consent Order.
However, if the parties cannot agree on how to separate their finances, the court may decide what it believes to be ‘fair’ and issue a Financial Settlement Order. This does not necessarily mean that assets will be divided equally between the spouses, as the court will consider several factors in its decision. Unlike Separation Orders, Consent Orders and Financial Settlement Orders are legally binding.
If a situation arises where neither a Consent Order nor a Financial Settlement Order has been made, according to UK law, the parties will remain in a financial relationship indefinitely. This means that both parties will be able to make financial claims against the other, even years after the marriage has ended.
Is there a time limit on financial settlements after divorce in the UK?
There is no time limit on financial settlements after divorce in the UK; you can apply days, months or decades after a divorce has been finalised.
If you do not reach a settlement during the divorce, you may put yourself in financially vulnerable position in the future.
Your ex-spouse could make a claim for spousal maintenance against you at any time (unless they have remarried), they could claim a financial interest in property, pensions, inheritance or apply to make you jointly liable for a debt.
In some cases where there has been no legal financial settlement, people have claimed against their ex-spouse’s estate after their death causing significant distress and expense for the deceased’s relatives.
Financial settlements can include what is known as a ‘clean break clause’ if approved by the court. This essentially draws a line under the marriage dissolving all financial ties between you and your ex-spouse and preventing both parties from making any claim against the other in the future.
Can I apply for a financial settlement if I have remarried?
While there is not a specified time limit for applying for a financial settlement after divorce, it is important to note that if one spouse remarries, they may be prevented from applying for certain orders.
For example, a person who divorced without a settlement and has since remarried cannot apply for a financial provision or spousal maintenance order, or a property adjustment order.
However, a remarried person can make a claim on their ex-spouse’s pension. In addition to contacting family and divorce law experts, you may want to contact a Pensions on Divorce Expert (PODE) or pension actuaries who will be able to provide bespoke advice on the best way to protect your pension.
To avoid stress and cost for yourself and your relatives in the future, it’s important to reach a legal financial settlement with your ex-spouse as soon as possible. You can start the process today by contacting our friendly team.
Advice from solicitors who can help you reach a financial settlement after divorce
Without a financial settlement, your ex-spouse could make financial claims against you in the future, even years after your divorce. This includes claims on inheritance, property or pensions that you may receive in later life.
At Osbourne Pinner Solicitors, we can provide legal advice and guidance to those looking to secure a financial settlement after a divorce has been finalised. Our divorce and family law team are here to support you through the process with compassion and support.
We are experienced at managing a wide range of cases, including those that require the resolution of complex financial situations and mediation. Contact us today to book a free 30-minute consultation. Call 0203 983 5080, email us at [email protected] or use this form…
