What should you do once you reach an agreement in respect of finances following divorce?

Private client team with Natalie Thomas - Associate Solicitor DJM Solicitors

The process for divorce is often a stressful and upsetting time for parties, despite this, parties should try to reach an agreement in respect of their finances and more importantly how their financial ties will be severed during the divorce.

If you and your spouse can reach an agreement between yourselves, you should always have this made legally binding by obtaining a Consent Order, which is approved by the Courts.

Once a Consent Order has been finalised, neither of you will normally be able to make a new or further financial claim against the other.

Negotiating an agreement is always preferable to arguing things out in Court and asking a judge to decide how to divide your finances. If necessary, you can instruct help from your solicitors or use the mediation process.

Without a Consent Order, there is always a possibility that your former spouse will try to make a claim later, maybe against assets acquired after the marriage broke down, there is no limit to how long after the divorce this can happen. Even if you and your partner draw up an agreement between yourselves, this does not have the same effect as a legally binding Consent Order from the Court.

You can apply for a Consent Order at any stage after the Decree Nisi has been granted. It is a good idea to obtain the Consent Order before the divorce is finalised with the Decree Absolute.

The Consent Order should include:

  • Your home – whether it will be sold and the proceeds divided or ownership transferred to one of you;
  • how other assets such as savings, investments or business interests will be dealt with;
  • what will happen to personal possessions such as furniture;
  • how any pension schemes will be shared;
  • child maintenance for any children;
  • whether one of you will pay the other spousal maintenance, and for how long;
  • who will take responsibility for any outstanding debts;
  • an agreement that neither of you can make a claim as a financial dependant when the other dies.

Once the agreement is reached, one party usually drafts the consent order which is then approved by the other party and signed by both. You will both need to complete a statement of information form summarising what capital and income each of you have. This application form is sent to the Court together with the signed Consent Order and a £50 Court fee.

The Judge will approve the terms of the agreement making sure they are fair for both parties and legal. The Judge may want to ask a few questions – either in writing or at a hearing – if the agreement seems excessively one-sided (although a hearing is quite rare). Once the judge is satisfied, the consent order is ‘sealed’ and becomes legally binding.

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