There have been two recent highly reported cases which have sent out a stark reminder to couples why it is crucial to finalise financial matters upon divorce.
The wife of the Lambretta millionaire was last year awarded £2.7 million 10 years after the parties divorced notwithstanding the fact, as the husband argued, a verbal agreement was reached at the time of separation that the wife would retain the family home worth £700,000 mortgage free, maintenance of £10,000 per annum plus child maintenance. However as this verbal agreement had never been approved by the court, it effectively meant that the parties’ financial claims remained open.
At the date of separation the husband’s company was turning over £1 million and at the time the wife issued her financial application with the court his business was estimated to be turning over £30 million.
In issuing her financial application with the court the wife argued that no legal agreement between the couple had ever been finalised.
In another case which attracted a great deal of media attention was the case of Wyatt v Vince in 2015. In this case Kathleen Wyatt won the right to pursue a financial claim against her former husband, Dale Vince from whom she separated 30 years previously. The parties met in 1981 and after having a son, separated in 1992. During the parties’ relationship they lived on state benefits. Following separation the husband built up a green energy business reported to be worth £57 million.
The parties eventually settled matters by way of agreement (later embodied in a court order) with the husband paying the wife £300,000 plus a proportion of her legal costs.
Frequently asked questions
1. My ex-wife and I recently divorced and agreed how to divide our assets, do I need to go to court?
Answer
If you and your former wife have reached an agreement as to how the matrimonial pot will be divided, the agreement should be embodied into a consent order, signed by both parties and which will be lodged with the court with a request for a Judge to approve it. If, upon considering your financial position, the Judge deems the agreement fair, the consent order will be sealed and become legally binding.
2. My ex-husband and I divorced 6 years ago and at the time I verbally agreed to accept a lump sum payment from my ex-husband. Is this legally binding?
Answer
No the agreement is not legally binding. The courts still have jurisdiction to deal with a financial claim after divorce and until there is a court approved order.
3. As I am divorced I presume my ex-wife no longer as any financial claims against me.
Answer
Wrong. It is a common misconception that once divorced either party is prevented from seeking financial assistance from the other. Until matters have been finalised by way of a court order, either the husband or the wife is entitled to make a claim against the other’s assets, property, income or pension.
4. How can I achieve a clean break?
Answer
Do not assume that if you have reached a verbal agreement with your spouse that this is final. If your agreement is not approved by the court you are exposing yourself to future claims being made by your spouse and possibly your estate upon your death. A clean break is a clause inserted into a court order and which severs all financial ties between you and your spouse. A clean break may not be suitable in all circumstances. It is advisable to seek legal advice to discuss your individual situation.
Please note that the above answers are generic and it is important to seek legal advice regarding your individual set of circumstances. Call one of specialist lawyers on 0161 9273118 for a free and confidential 20 minute consultation.