They Think It’s All Over …  Actually, No It Isn’t or Why you Need a Financial Order on your Divorce

The Minister says to the Groom/Bride:

 N, will you take N to be your wife/husband?

Will you love her/him, comfort her/him, honour and protect her/him and, forsaking all others, be faithful to her/him as long as you both shall live? (The Marriage Service  © The Archbishop’s Council 2016)

Many of us will be familiar with these words from the traditional church wedding service.

When we say “I will” in response, and then go on to make the traditional vows about having and holding, for better, for worse, for richer, for poorer and so on, most people don’t realise that they are also saying, and under the Matrimonial Causes Act, if we get divorced we are obligated to continue to financially support each other and can make claims against each other for capital, income and pensions at any time until the court says those claims are dismissed.

It’s not as romantic as, ‘til death us do part, but I wonder how much grief would be saved if people understood that they are both taking on these responsibilities when those vows are made?

Those claims, for capital, income and pensions, relate to the assets that have been built up during the marriage as a result of contributions both people made to the relationship.

The courts don’t discriminate between types of contribution so a wife who has stayed home to raise the children has contributed as much as a husband who went out to work and earned the money to pay the mortgage.  But what I am concerned with here are the words “until the court says those claims are dismissed.”

If you are divorcing right now you may find that there are complicated issues to resolve about finances – who is to get what out of the house, what happens about pensions, the division of a business.

If you have a lawyer advising you and you reach an agreement with your ex, it will be strongly recommended that a Financial Remedy Order (“FRO”) is drawn up.  In these circumstances it will be applied for by consent, so these orders are often called “consent orders”.

If you go to court and a judge decides it all for you, you will get a FRO automatically as part of the decision process.

All FROs, made by consent or otherwise, are made by judges, so that they are binding and enforceable, meaning that if either of you try to go back on the deal, the other can go back to court and make you do what you are supposed to.  They always include “dismissal clauses”, which explicitly say that neither of you can claim anything else from the other in the future.

But what if you reach agreement with your ex by some other route, such as mediation?  Or what if you don’t really have any assets to divide, or you sort it all out between you and there is no hassle about anything?  Surely the decree absolute will take care of it?  You don’t need to go to the bother of getting a FRO then, do you?

Well yes, actually, you do.  Getting your decree absolute only confirms that you are divorced.  Those claims for capital, income and pensions don’t go away until a judge specifically says they do.  If you marry again then you can’t make claims – but if your ex doesn’t remarry they can still claim from you at any time in the future – unless and until a judge has said they can’t.

You might think that you don’t have very much and you will probably carry on not having very much, and neither will your ex, but what happens if they fall ill or have an accident and can’t work anymore, so have even less than they do now, or you win the Lottery?  Those sorts of circumstances throw a whole new light on it, and suddenly, even years later, you could find yourself facing a claim.

That’s exactly what happened in the case of Wyatt v Vince [2016] EWHC 1368 (FAM).

The case made the headlines a year or two ago when Mr Vince tried to say that Ms Wyatt wasn’t entitled to make a claim because of a 19 year delay, but the Supreme Court said that she could.

Her claim has recently been resolved by agreement and she was awarded £300,000 plus some money towards the costs of the Supreme Court hearings.  The judge approving their agreement said he was satisfied that it was reasonable for Ms Wyatt to receive a modest award following the breakdown of the marriage.

I expect you are wondering why she waited so long to make her claim.  Well, they married in 1981 and had one child.  They separated in 1984 and divorced in 1992.

During the marriage they lived a New Age traveller lifestyle; after they separated Mr Vince continued living as a traveller for several years; Ms Wyatt also lived as a traveller with their child, and in homeless shelters and eventually in a council property.  A classic case of a couple with not very much at all who probably saw no reason to go to the trouble and expense of getting a FRO.

What changed was that years later Mr Vince became a highly successful green energy tycoon worth £57m, while Ms Wyatt continued to live in her council property, suffering with various health problems.

The amount they eventually agreed she should receive was only about 0.05% of his overall wealth, and her claim was an uphill struggle; but nevertheless she still got something, over 19 years after they divorced, when it could never be said that she had made even the slightest contribution to the assets Mr Vince had built up.

And it was all because they never asked a judge to dismiss their claims against each other when they got divorced.  A great opportunity for Ms Wyatt, not so much for Mr Vince who, as you might imagine, is a bit cross about it all.

So that is why lawyers recommend that you have a FRO dismissing all claims, so that you both have the certainty for the future that neither of you can bring any claims against the other in later years.

A FRO means that the agreement you have reached is binding: neither of you can go back on any deal you may have made in mediation; and neither of you can go back on a promise between the two of you to leave each other’s finances alone.

FROs are bespoke technical documents that are tailored to your individual circumstances, and usually you will need a lawyer to write it up for you.  But if your circumstances change later in life and you hit a jackpot, you may find that it was a very worthwhile investment – and it really will all be over.