Why is it important to obtain a consent order with regards to finances upon divorce?
Whilst a decree absolute legally ends your marriage it does not legally end your financial commitments to one another.
A recent case* has highlighted the problems which can arise where a couple agree how their finances should be divided when they divorce but have not formalised this agreement with a consent order. In this recent case the court allowed a husband to make a claim for financial remedy from his ex-wife even though they had been divorced for 24 years and had both re-married.
This means that if, for example, one of you is fortunate enough to receive a large sum of money many years after the divorce, the other person could still be entitled to claim a share of that money unless a consent order is in place. This is because there is no statutory limitation period in relation to financial claims upon divorce i.e. there is no time limit by which an ex-spouse must make his/her claim. That said, even though the court may grant them permission to make an application, even many years after divorce, it does not guarantee that the former spouse will be entitled to anything – it does however mean that you may well be saddled with a hefty legal bill to fight the application.
How can this be resolved?
When you agree on how the finances of your marriage are split, a solicitor can draw up a consent order which will detail exactly how the finances will be shared between you. The order will also usually contain a ‘clean break clause’ which specifically prohibits any future claim from being made against the ex-spouse’s finances. Both of you will have to fully disclose your financial circumstances in a ‘statement of information’ and then these two documents will be sent to the court. It is important that each of you receive independent legal advice to ensure the agreement reached is fair for both of you.
The court will then use the information you have provided to check that the agreement is fair and whether each person can afford to carry out their side of the agreement. If they are satisfied that the consent order is fair and reasonable the court will approve the consent order. Once this has happened it becomes very difficult for a person to dispute it in future.
Nelson Myatt Solicitors can help you by reviewing your finances with you and explaining how the law applies to your personal circumstances both and now and in the future.
To arrange a free initial appointment, contact Andrew Nelson on 01492 588200.
Nelson Myatt LLP
Suite 6, Conwy Business Centre, Junction Way,
LLandundo Junction, LL31 9XX
*A v B 2018 EWFC 4