There can be many considerations to make when going through divorce. Bethany Giles and Kerry Hayward in our WPEP and Family team have listed their top 5 considerations.
1.Divorce considerations when managing the family’s finances
You must be aware that obtaining a divorce may not end the financial relationship between you and your spouse. Without a financial order, either spouse can make an application to the Court seeking to claim on the other’s assets, income and pensions. It is crucial that you seek a financial remedy order to conclude all financial ties between you and to provide protection from any future claims from your former spouse.
2. Court is not the only answer
Divorce and financial remedy proceedings have the ability to be very expensive and lengthy and it is not unusual that contested proceedings could cost each spouse in excess of £50,000 in legal fees! It is important that you consider all options available to you to resolve matters in the most amicable way possible. There are a range of options available, such as mediation and correspondence between solicitors. In recent times, we have seen a real push towards alternative dispute resolution, especially from the Family Courts in England and Wales and as such, it is important to remember that contested Court proceedings is not always the best way forward.
3. How to have a child friendly divorce
Consider whether you need to set out formal arrangements in relation to any children of the marriage. Divorce is one of the most stressful things anyone can experience, and this can be further exasperated by the complexities of co-parenting. It is in everyone’s best interests to seek an agreement between yourselves in relation to where the child(ren) will live, and important considerations such as schooling. It may also be beneficial to speak with the child(ren) if they are of an appropriate age, to ascertain their thoughts and feelings. In the event arrangements cannot be agreed, seeking assistance from a mediator or solicitor can be helpful, but it is important to remember that the wellbeing of any children should be the paramount consideration and focus during these difficult times.
4. Wills and Lasting Powers of Attorney changes in divorce considerations
We always recommend that a Will should be reviewed if considering divorce or dissolution. It is important to review the Will sooner rather than later because if a person were to pass away before the divorce or dissolution was finalised, their estate could pass to their estranged spouse which may not have been intended.
If a person dies without a valid Will, the rules of intestacy would apply and determine who would inherit the estate. There are many ways a Will can protect the interests of children but also a new partner in the future. If not considered properly, this can often be a cause of dispute.
Whilst reviewing or making a Will, it is also an ideal time to think about Lasting Powers of Attorney. Lasting Powers of Attorney (or LPAs as they are often known as) are a way to appoint an attorney to act on your behalf if you lost capacity in the future and were unable to make decisions anymore. There are two different types, one for Health & Welfare decisions and one for Property & Financial decisions.
If you already have LPAs prepared, it is important to check who has been appointed as attorney because after divorce or dissolution, your previous spouse would be treated as if they had predeceased you and would therefore be unable to act as attorney. The exception to this is if there was a statement in the LPA confirming that they should continue to act after divorce or dissolution. If your previous spouse were unable to act, you may need to appoint a new attorney particularly if there are no other attorneys or replacement attorneys who can act.
If there was no valid LPA in place and you lost capacity, the Court of Protection would appoint a Deputy and this can be a lengthy and expensive process. It also takes away the opportunity to choose who you would like to act on your behalf if you were in a vulnerable position.
5. Reviewing property ownership and life insurance policies
When going through a divorce or dissolution, it is also very important to check how property is owned if held jointly. There are two different types of ownership, joint tenancy and tenancy in common. If property is held as joint tenants, the owners do not have individual shares and own the property as a whole together. If one of the owners were to pass away, the surviving owner would continue to own the property. This means that the property cannot be directed by the terms of a Will.
Tenancy in common means that property is held in shares. This could be 50% each or unequal shares. If one of the owners were to pass away, their share would be left in accordance with the terms of their Will or if there is no Will, would pass in accordance with the rules of intestacy.
It is therefore important to take advice regarding property ownership as soon as divorce or dissolution is being considered.
It is also important to review any life insurance policies which may be payable on death. Often a person’s spouse will be named as the sole beneficiary however if you are separating you may wish to change this to another beneficiary, for example, children. A life insurance policy will often be outside of the estate and would not follow the terms of a Will so it is important to review this as soon as possible.
For any specialist legal advice on with your divorce considerations contact our specialist family team here. For legal assistance with creating/amending your Will or LPAs with divorce considerations contact our specialist WPEP team here.