3 common divorce pitfalls — the importance of financial orders and ‘Remarriage Trap’ explained

While 40% of divorcees believe that the divorce process is financially unfair, astonishingly just 7% actually seek professional advice. That’s according to research from Legal & General, which identifies various other pitfalls that individuals can fall into during divorce — all of which could be avoided with appropriate guidance from experts.

Here, Jayde Hampson outlines three common divorce pitfalls involving clean break orders, pension rights and Will writing and explains why obtaining a financial order is so important when divorcing or dissolving a civil partnership. 

Three common divorce pitfalls

Some other common pitfalls identified in the research include:
 

1.Future financial claims

One particularly shocking statistic is that 69% of people who’ve divorced don’t have clean break orders. This leaves them exposed to future claims from ex-partners.
 

2. Waiving pension rights

Pensions are valuable assets that shouldn’t be overlooked when a couple separates. Yet only 13% of people consider pensions when they’re dividing assets as part of the divorce process. When pensions are considered, 23% waive their rights altogether.

Depending on the value of the pension and the type of pension scheme, a pensions on divorce expert (PODE) or actuary may need to be instructed to provide advice on pension valuations, whether any tax issues should be considered and how any pensions should be shared between a couple. 
 

3. Unchanged Wills

11% of people don’t update their Wills following a divorce, putting them at risk of inheritance disputes.

Why are divorcees walking into these pitfalls?

Since the implementation of online divorces in 2018 and the introduction of 'no fault' divorces in April 2022, many individuals are now more likely to instigate a divorce without first consulting a solicitor.

Although the divorce itself can be dealt with relatively easily by an individual using the online court portal, legal advice should always be sought on the process. This is particularly important when it comes to financial matters. Taking legal advice ensures that you’re fully informed as to your legal rights and options — enabling you to make informed decisions and avoid future disputes.

Why use a lawyer for your divorce?

Each person’s situation and circumstances are unique. If your separation is amicable, a solicitor can help to facilitate the implementation of a legally binding agreement made directly with your ex-partner. It’s important to acknowledge that the conclusion of a relationship can be an emotionally charged period for both individuals — and tensions may arise even when the couple intend to remain amicable. Engaging a solicitor can minimise the necessity for direct communication and help to alleviate any potential conflicts by enabling the solicitor to conduct practical negotiations on your behalf.

If an agreement can’t be reached during direct discussions with your ex-partner, it’s vital that legal advice is obtained at the earliest opportunity so that you know your legal rights and can ensure that any financial settlement is in your best interests. It’s even more important to ensure that advice is sought if you have a potentially difficult ex-partner and believe that they may be withholding or refusing to disclose information or hiding assets. The same goes if your partner is abusive. 

How to get a financial order

When you’re getting a divorce or dissolving a civil partnership, the court has the power to make a variety of financial orders. When considering what an appropriate settlement should be, the court has regard to Section 25 of the Matrimonial Causes Act 1989 or Schedule 5 of the Civil Partnership Act 2004. These provisions set out that the court must consider all circumstances of the case — prioritising the welfare of any children — as well as the factors that the court must have particular regard to such as earning capacity, financial needs and obligations and the standard of living enjoyed during the marriage.

Before an application is made to the court, it’s advisable for a couple to try and reach an agreement by exchanging full and frank voluntary financial disclosure. Disclosure is important as it helps family lawyers to advise on what an appropriate financial settlement might be. It also minimises the risk of any agreement being set aside in the future due to a lack of understanding of the other person’s financial position. 

Once an exchange of disclosure has taken place, negotiations would follow with the hope of reaching a financial agreement that can be embodied into a legally binding court order. If an agreement can’t be reached, an application to court may need to be considered. 

Risks of not getting a financial order

It’s important to be aware that you can get divorced without a obtaining a financial order. However, it’s advisable to obtain a legally binding financial order even if there are no (or limited) assets. 

Until a financial order is obtained from the court, financial claims arising from the marriage or civil partnership continue to be ‘live’ even after the divorce or dissolution has been finalised. This means that your ex-partner could bring claims against you, regardless of how many years have passed since the divorce. 

The ‘Remarriage Trap’

Without a financial order, you may also be liable to fall into the ‘Remarriage Trap’. This is where someone who has remarried after getting divorced may lose the right to claim assets that they were otherwise entitled to. 

Getting divorced? Talk to us

If you’re getting divorced (or have been divorced and don’t have a financial order), our experts are here to help. We can fully explain the divorce process and provide you with advice around your rights and any financial matters.

Our immense experience means that we can discuss other options that you may not have thought about — such as mediation and other forms of non-court dispute resolution — and assist you in making decisions with your ex-partner without having to go to court.

We can provide both initial legal advice as well as ongoing legal advice throughout the divorce process and beyond.

Talk to us by giving us a call on 0333 004 4488, sending us an email at hello@brabners.com or completing our contact form below.