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Do I need to get divorced to have a financial settlement

Do I have to divorce straightaway?

Deciding to end the marriage or being told that your spouse wishes to end the marriage is a traumatic experience.  Some want to get divorced straightaway so that they feel they can move on with their lives.  Others however, either don’t feel ready to take that step, simply aren’t in any rush or they may not wish to divorce for religious reasons.

The new no-fault divorce came into force in April 2022 allowing couples to begin divorce proceedings straightaway without laying any blame for the breakdown of the marriage on the other or having to wait until they have been separated for a period of time.  Statistics have shown that since the change came in divorce applications have increased and reached their highest level over the last decade.

It is up to you as to whether you wish to issue divorce proceedings or not and there is no reason why you can’t stay married but simply live separately. Under the new law, however, there is no longer a defence to a divorce, other than on technicalities, so if your spouse wishes to divorce you may not have a choice in the matter.

Can we still deal with the finances?

You don’t have to get divorced to begin dealing with a financial settlement and in most cases it is better to deal with the settlement soon after separation rather than leaving it because financial assets can change over time and assets get disposed of which can make it more difficult to deal with the financial settlement.

If a financial settlement can be negotiated the settlement will be dealt with in exactly the same way as it would be if divorce proceedings were issued.  The same issues are considered such as the needs of the party, sharing principle and overall, ensuring that a settlement is fair.  However, if you can’t reach an agreement and need the court’s assistance then, at that point it is usually better if you issue divorce proceedings.  Otherwise, the court can be quite limited in the orders that they can make and how much they can assist you.

If either party has a pension and a pension order is required in favour of one of the parties again, you would need to issue divorce proceedings in order to obtain the Pension Order.  You can agree that when divorce proceedings are issued at a later date a Pension Sharing Order will be made at that time but there is no guarantee that your spouse will not have changed their mind by then.

Is any agreement we reach final and binding upon us?

If you are not going to issue divorce proceedings then the best way to formalise an agreement is to have a Separation Deed.  This creates a contract between you and sets out the terms of your agreement.  As a contract, if either of you fails to keep the terms you can apply to the court to enforce those terms.

A Separation Agreement is not however, final.  Only a court order is final.  This means that either of you can change your mind and make further claims against the other at any point in the future.  There is no time limit upon this.

How can I make an Agreement final?

The only way to make a financial settlement final is to issue divorce proceedings and obtain a court order to confirm that settlement. 

If you both agree to having an Order confirming the financial settlement this can be dealt with by consent. The Order is then sent to the court for approval and sealing.  If however, your spouse does not agree to the Financial Order or wants to make further claims then you may have to issue court proceedings.  If you have already entered into a Separation Deed the court will consider that document as one of the matters that they have to consider when deciding a financial settlement. Provided it is drafted correctly and meets certain conditions it is considered as good evidence of the agreement that has already been reached and may be difficult to challenge.

So what should I do now?

If you really don’t wish to issue divorce proceedings then you don’t have to do so but it is still advisable to deal with the financial settlement and if this is agreed have the terms incorporated into a Separation Deed which is best to be drafted by a family lawyer.

However, if you wish to have finality on the financial settlement or have a Pension Order then you will need to issue divorce proceedings so that you can have a final order approved and sealed by the court.

We will be happy to see you to provide you with further advice to help you make up your mind.

By Alison Wilding