Partner and Head of Family Law at Sweeney Miller Law, Rebecca Cresswell, discusses the importance of understanding financial agreements and what splitting couples should consider at the start of divorce proceedings.
It is well known that January is often a busy month for divorces. If your New Year has unfortunately started this way, then as a splitting couple have you stepped back to consider the financial practicalities?
Many people do not realise that a divorce does not resolve your financial matters and there is no time limit on when your spouse or former spouse can make a claim against you for your assets.
To reach an agreement or a clean break with your spouse – or former spouse – it is always advisable to have the agreed terms drafted into a consent order approved by the Court to make it legally binding. Unless you have an approved Court order, your informal agreement can later be overruled by a Judge if your former spouse makes a claim against you, creating uncertainty for the future.
Financial considerations on divorce
The Court will take all the marital assets into account and ensure both partners’ needs are met; if they are, then the sharing principles will apply. If there are insufficient matrimonial assets to meet the partner’s needs, the Court can consider non-marital assets such as inheritance and assets generated before the marriage and can share the assets equally. It is important that you consider taking legal advice on your individual circumstances – each case is unique and dependent on the assets you hold.
Pre-nuptial agreements and protecting wealth
Circumstances may differ if you entered into a pre-nuptial agreement before you married, as the agreement would have established the intentions on the division of finances in the event of divorce. Although nuptial agreements are not legally binding in England and Wales, if drafted correctly by solicitors they have a substantial impact on a Judge’s decision.
Rebecca comments: “More couples are protecting their wealth before entering into a marriage and drafting pre-nuptial agreements to formalise their arrangement. At Sweeney Miller Law, we have seen an increase in couples seeking advice as they are marrying later in life or embarking on a second marriage.”
Many individuals already have assets they wish to protect or a business that needs to be considered. Depending on if they are a sole trader, partner in a partnership with others, or a shareholder in a limited company, they need to consider how the business could be affected if they were to divorce. It is equally important to consider whether, under the articles of association, shareholders should be required to enter into a pre-nuptial agreement before they marry to protect the business, as a Judge would consider whether the business is matrimonial property.
Unmarried couples
If you are separated from your partner but were not married, the rules are different as you can only rely on property ownership, financial contributions, and the presence of dependent children, unlike marriages where the Court looks at all the circumstances of the case and where the primary consideration must be the welfare of any children.
Expert advice from Sweeney Miller Law
At Sweeney Miller Law, we work collaboratively within our family and corporate teams to help you navigate all aspects of your separation and protect your business and future wealth. To start the process and arrange an appointment, contact Rebecca Cresswell at rebecca@sweeneymiller.co.uk, call 0345 900 5401 or visit sweeneymiller.co.uk