Navigating Your Finances Through Divorce: A Comprehensive Guide

Navigating your finances through divorce: A comprehensive guide
Photo by Fabian Blank on Unsplash.
Andrew Robotham
Andrew Robotham
Divorce & Family Lawyer
Woolley & Co Solicitors

Going through a divorce is undoubtedly a challenging time, and it’s crucial to understand that completing the legal process is just one aspect. Sorting out finances is equally important but often overlooked. In this guide, we’ll address common reasons why people delay or avoid settling financial matters, emphasising the potential pitfalls, and offering guidance for a smoother financial transition.

Why do some delay a divorce settlement?

  1. Believing there is nothing to protect: Some couples think they have nothing valuable to protect, so hiring a solicitor seems unnecessary. However, even seemingly modest assets should be properly addressed to avoid future complications.
  2. Self-resolution confidence: Couples who are amicable and believe they can sort out financial arrangements by themselves may delay seeking professional advice. While this may work initially, unforeseen changes or disagreements can arise later.
  3. Cost concerns: The perception that hiring a solicitor is expensive leads some to avoid professional assistance. However, the long-term financial consequences of not settling matters properly can far outweigh the initial cost.
  4. Information agreements: Couples who have informally agreed on financial matters may skip the formal process. Unfortunately, without a legally binding agreement, these arrangements can be challenged in the future.
  5. Postponing due to stress: Some couples decide to delay financial discussions, thinking they can revisit them later. However, procrastination can lead to legal and financial complications down the road.

Importance of timely settlement

Future claims:

Without a consent order, an ex-partner may have legal claims on assets acquired post-divorce, such as lottery winnings or inheritances.

Changing circumstances:

Amicable relations can change due to new partners or altered circumstances. A delay might result in a partner changing their stance on previously agreed-upon terms.

Tax implications:

Delays may lead to unnecessary tax liabilities, especially regarding capital gains tax on property sales not considered the main residence.

Asset valuation:

Waiting to resolve assets can lead to disputes over their current value, potentially disadvantaging one party. It’s crucial to have up-to-date valuations during settlement discussions.

Financial advice and consent orders

Seek professional advice:

Consulting financial advisors and solicitors ensures you make informed decisions and protects your interests in the long run.

Consent orders:

Even if you’ve amicably agreed on terms, formalise the agreement with a court-issued consent order. This legally binding document prevents future disputes and ensures financial clarity.

Conclusion: Take control of your financial future

In conclusion, while the emotional aspects of divorce are undeniable, addressing financial matters promptly is crucial for a secure future. Regardless of the simplicity of your financial situation, seeking professional advice and obtaining a consent order will protect you from potential legal and financial pitfalls. Remember, the initial investment in settling matters now is far less than the potential cost – both financially and emotionally – of neglecting proper financial resolution. If you’ve decided on or are going through a divorce, ensure your financial affairs are in order for a smoother transition into the next chapter of your life.

Read more articles by Woolley & Co Solicitors.

About Andrew Robotham

Andy is an experienced divorce and family lawyer with Woolley & Co, Solicitors. He has built an enviable reputation in the Derbyshire and Leicestershire area. He deals with all areas of matrimonial law, including divorce, children matters, financial settlements as well as civil partnerships, separation, cohabitation, and prenuptial agreements.

In the 2020 edition of Legal 500 Andy is named as a Recommended Lawyer for Family Law in the East Midlands, where it is noted ‘Andrew Robotham’s qualities are numerous. He is able to combine empathy for the situation as well as total professionalism that the circumstances demand’.

You can visit Andy’s profile here for more.

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