The no-fault divorce law landed recently in the UK; as divorce lawyers, we are expected to see an influx of applications now there is no requirement to place the blame on either party.
Separating from a partner could have a big impact on your client’s finances, especially if they have relied on their income during their marriage. Innovative divorce firm Fair Result has provided us with the important financial considerations that clients need to make following their no-fault divorce.
Spousal and child maintenance
The first thing for your client to consider is whether they need to pay spousal maintenance or whether they will be receiving spousal maintenance; whether they pay or receive any child maintenance. This will have a very significant impact on their disposable income in the immediate aftermath of divorce and separation.
It’s important that when your client embarks on their new single life, they take account of outgoings or income from that previous relationship as it will materially affect how they move forward. Budget Wisely.
Preparing for your future
Once your client has reached a financial agreement in divorce and the consent order is signed sealed and approved by the court, they are free to move on. Although, your client will need to think carefully about their relationship with money after divorce because they probably already halved their existing hard-earned savings. Divorce and financial settlements are often very expensive where one marital pot is divided into two.
Your client will want to move on with life and start creating happy memories again.
If they are unsure about their relationship with money after divorce and want some advice about the possibility of a prenuptial agreement if they are considering re-marrying after divorce. There are many things that can be looked at to give your client security. For instance, a living together agreement will set out how their new relationship will finance itself. Not exciting or even romantic at the start of any new journey but it may save them a lot of heartache and many thousands of pounds if their relationship doesn’t survive.
The next thing for your client to consider is if they are going to embark on a new relationship and how soon the question of money should be brought up in any new relationship.
In any new relationship, the excitement and adrenaline rush of the moment where is the possibility of hope and security for the future, the question of money will always be at the back of the mind. But how early in that relationship should your client be talking about money. It’s not the most appropriate question to ask on a first or second date ‘what’s your credit score?’ Conversely, if the relationship is going well, they don’t suddenly want to find out that their new partner is still paying off £50,000 of credit card bills from a previous relationship.
So, when is the right time for your client to discuss finances? There is no hard and fast rule. Yes, at some stage your client is going to have to have that conversation with any new partner. Otherwise, they risk a potential relationship disaster – finding out about huge debts can put a serious strain on any new developing relationship. Your client needs to use their intuition to get an inkling about how compatible they will be with their new love when it comes to the question of cash.
Your client needs to look at how their new partner treats them, for example, do they go fine dining or does their partner always choose a pizza joint when it’s their turn to pay. Is it cocktails in the hottest bar in town or a few beers in a quiet hideaway? Is the car the latest Hot Wheels or is their new partner driving a safe average reliable vehicle? All these things will give them some idea of their new partner’s financial position and what’s likely to be the future for them moving on.
At some stage, there will have to be a discussion of finance to establish your client’s new relationship with money after divorce. They need to find a good time to talk and put their cards on the table and be honest with their new partner and be open to their feelings.