The Divorce Statistics: Financial remedy

According to Family Court statistics, from October to December 2022, the number of financial remedy applications was down 6% compared to the same period in 2021.

This is an interesting statistic, as usually divorce applications go hand-in-hand with the number of financial remedy applications that are made, or at least follow closely behind. This is because, whilst you are able to legally end a marriage through a divorce application, your financial claims arising from the marriage are not dismissed until you have a financial order in place.

This is not too different from our own experience. With the introduction of the ‘no fault’ divorce in April 2022, we have seen an increase in the number of divorce applications, but not necessarily the same increase in the financial remedy applications. It is possible that an explanation for this change is that people are unaware that their financial claims are not dismissed by simply seeking a final order (previously known as a decree absolute).

There are serious repercussions for not dealing with the financial aspects of your divorce. Firstly, if you have remarried, you are likely to be barred from bringing a financial claim against your ex-spouse, except for pension claims. This means that you could be losing out on your share of the matrimonial assets. Secondly, in the absence of a financial order, your ex-spouse could come back at a later date and make a claim against your assets. There is no time limit on such applications, and the courts have found themselves dealing with applications decades after the divorce has been finalised. At that stage, the court may simply have no choice but to consider the assets that are available at the time of the application as opposed to what they were at the time of separation. In our experience, as time goes on, the wealth also increases.

The financial remedy application can be made during or any time after the conclusion of the divorce, although it is our advice that the final order not be obtained until a financial order is in place. This is because, upon a final order being granted, you will no longer be considered as your ex’s spouse and may lose out on spousal benefits. This can be particularly important if you have registered a matrimonial home rights notice on the family to protect your position. Your change of spousal status can also impact what you may inherit under your ex-spouse’s estate upon their death. In fact, it may be that the death in service and/or the widow’s pension also become unpayable because you are no longer a spouse.

We are finding that a number of clients are not considering their finances until a conditional order has been obtained. You can only seek a conditional order in relation to the divorce once 20 weeks have passed from the date your divorce application was issued. This in itself is causing difficulties when it comes to negotiating an agreement on how the assets will be divided, as clients wish to put an end to everything before they can seek a final order. In some cases, it is causing a financial loss as by the time the finances are being addressed, the assets have reduced in value or certain assets have been disposed of.

By dealing with your financial remedy claims at the earliest opportunity, you can ensure you know where you stand financially upon the divorce finalising and be able to move on with confidence. The judge can consider making the following orders in a financial remedy application:

• Lump sum Order(s) which is when a sum of money is paid.
• Sale of Property which can be deferred to a later date depending on your circumstances.
• Transfer of a Property into one’s name.
• Maintenance payments which are when regular payments are made to assist you with bills. Maintenance can be for children and you. Depending on your needs, it may be that you are entitled to assistance during the course of the divorce application.
• Pension Orders which are when a pension is likely to be shared, give you both equality.
• Clean break which is when all financial ties are cut between you and your ex-spouse.

You do not have to go down the contested route. We can advise you on the terms of settlement and, upon an agreement being reached, prepare the relevant paperwork for the judge’s consideration. If the judge approves the agreement, it will be sealed by the court as an order. This will then bring an end to financial claims arising from the marriage. If your ex-spouse is not prepared to negotiate, we can advise you on how to address the issues in a cost-effective manner.

Given the difficulties you may face in the future if your finances are not dealt with, it is wise to obtain advice from a divorce solicitor at the earliest stage.

For more information about how we can help, our family solicitors all offer a free initial 15 minute telephone appointment to discuss your needs. I can be contacted on 01245 453846 or via email at [email protected].