Are there time limits on settling financial arrangements on separation?

30th April ‘20

Are there time limits on settling financial arrangements on separation?

The short answer to the question is no, however, there are good reasons as to why parties should seek to resolve the financial implications of their marriage/partnership as soon as possible and certainly within a reasonable amount of time (see Wyatt v Vince below).

The options

When a relationship breaks down, you may be able to resolve financial arrangements by agreement with your former partner. This may include: the fair division of property (to include the family home), liquid assets (cash that is available now), investments, pensions and whether one party should pay maintenance to the other party. Some parties, however, need help to reach an agreement and may try mediation or other methods of dispute resolution which we have significant experience with, and can advise you further about.

If an agreement cannot be reached or you are unlikely to reach an agreement, then you may need to apply for a Financial Order (via Form A) in the same venue as the proceedings for the divorce petition – an applications process which will soon become fully digitised. There are also various pre-action considerations which need to be weighed up in a timely manner prior to simply launching into litigation.

Ultimately the Family Court determines how any financial arrangements are to be divided and that a fair settlement is reached, although an agreement can be reached at any time before then, subject to the courts’ approval.

The case law

Although there is no time limit for making an application for a Financial Order, delays affect the provision that may be granted. In Wyatt v Vince [2015] UKSC 14, the Supreme Court allowed the former wife to pursue her financial remedy application some 30 years after the decree absolute was granted in 1992.

During the hearing, Lord Justice Wilson commented that Ms Wyatt faced formidable difficulties in seeking to establish that a Financial Order [£1.9 million] should be made in her favour, due to:

  • the short duration of the marriage;
  • the standard of living during the marriage;
  • the long delay since separation;
  • the wealth was not created until some 13 years after separation and the former wife had not contributed to that.

Lord Justice Wilson stated it is not clear whether Ms Wyatt will be able to sustain her claim on the basis of need generated by her relationship with Mr Vince.

However, the court did find favour with the former wife’s case regarding “the contributions which each of the parties has made…to the welfare of the family, including any contribution by looking after the home or caring for the family”. Ms Wyatt had contributed significantly to the upbringing of the couple’s children over many years, a factor which may justify a Financial Order for a comparatively modest sum.

Further considerations  

There are other reasons why a financial application should be approached in a timely manner. Ordinarily financial disclosure only extends to 12 months prior to completion of the parties’ financial statements (Form E), this means that it will not cover any earlier periods – making it difficult to piece together the financial trail since separation. Any delay could also cause assets to be eroded and/or put out of the reach of the other party.

A further factor that needs to be considered is what happens if either party should remarry (post decree absolute) prior to resolving the financial arrangements. In this instance, if either party remarries that party cannot apply against their ex-partner for a number of orders in their favour unless an application for financial orders has been made in the petition or answer for the previous marriage. Parties subsequently run the risk of further complicating influences such as their new partner’s financial resources being considered as a resource available to that party.

The current economic climate will inevitably put increasing pressure on some parties in this regard as well as the fulfilment of existing financial arrangements. If you would like further advice on this matter or financial orders generally, please contact Alex Anastasiou, Senior Associate on aa@calibrate-law.com

This post is intended to be a brief note for clients and other interested parties. The information is believed to be correct at the date of publication but should not be relied upon as a substitute for professional advice. Please speak to a member of our team.

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