Since the launch of no fault divorce in April 2022, we have had a lot of questions about how the new divorce process will affect financial settlements. We’re regularly asked, is a no fault divorce financial settlement different to a settlement under the traditional divorce process? Here’s what no fault divorce means for finances.
As with the traditional divorce process, the new divorce law only has the effect of dissolving your marriage. This means it will not resolve any financial claims. Your finances have to be dealt with separately from your divorce.
The only difference between no fault divorce and the traditional divorce process is that you can split from your spouse without blame being assigned to either party.
How to handle a no fault divorce financial settlement
If you have a lot of wealth tied up in property, investments, pensions or business assets, it’s important that you resolve any financial issues quickly. The best way to secure a swift resolution is to hire a family lawyer to support you through the process.
This means you will get the right advice on the best course of action. Plus, it gives you the best opportunity to resolve issues outside of court, saving you money and avoiding any unnecessary hostility.
Financial claims
You and your former spouse will have financial claims against each other for capital provision, spousal maintenance, and pensions. You can each seek lump sum payments. Plus, you can push for properties to be sold, transferred or for ownership shares to be adjusted.
Equally, you can seek ongoing financial provision to meet your needs if you are financially affected by your divorce, and you can claim a share of business and pension assets.
While it is up to divorcing couples to agree how their assets and income will be divided following divorce, any financial claim will remain open until a Financial Consent Order is secured alongside a divorce.
No fault divorce financial settlements with no Financial Consent Order
If you are unable to secure a Financial Consent Order, any financial claim is simply left open-ended. This means that assets and finances are at risk of a claim by your former spouse in the future. Ideally, this is a scenario that you want to avoid.
As part of dealing with your finances amid divorce, you will need to think about other financial implications, including inheritance issues and the preparation of a new will.
There could also be tax implications. It’s recommended that you speak to an accountant or tax specialist prior to your divorce being finalised, and before any decisions are made about how to deal with any money or property issues.
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