We’ve reached a financial agreement, now what?

When going through a divorce there are considerations other than officially bringing your marriage to an end. A vital area that should not be overlooked is resolving your financial claims against one another. It is this stage in particular where we would always stress the importance of seeking legal advice.

There are many considerations that we find people sometimes overlook when they first seek legal advice. It is important to focus not only on your immediate financial needs but also to think about the longer term. Pensions are often one of the most valuable assets, next to the family home – notwithstanding this they are one of the most commonly overlooked resources when dealing with a divorce. It can often be the spouse that has devoted the majority of their time to looking after the children who is at a disadvantage, possibly having not accrued a similar sized pension pot as their spouse.

Before agreeing to any financial arrangement with your spouse it can be vital to seek independent legal advice. In most cases it is necessary to exchange full financial disclosure (such as bank statements, pension valuations, income details, etc.) with your partner in order to do this.

When you reach an agreement, it will need to be recorded in a ‘Consent Order’ (financial agreement document) and approved by the Court before it is legally binding. Consent Orders are required to properly dismiss the financial claims you and your spouse each have against one another arising from the marriage. Divorce alone does not dismiss all the claims an ‘ex’ spouse can bring against you (or you against them). The Consent Order is required in order to do this.

Once drafted and signed the Consent Order needs to be sent to Court to be made binding. It is the Court, not you or your spouse, that will have final say as to whether your agreement should stand. This makes the early advice of a solicitor and proper drafting vital to concluding yours and your spouse’s financial agreement. Should your agreement fail to be recorded and approved by the Court you leave yourself open to the risk of your ex-spouse returning in the future and re-opening these financial claims. For these reasons it is important you take legal advice as soon as possible.