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What new ‘no-fault’ divorce law mean for your finances, and how you can protect your assets



New divorce laws will be rolled out soon, making separation easier for married couples – but this may have consequences for family finances, lawyers warned.

Under the new “no-fault” rules, couples will no longer have to provide grounds for their divorce or civil partnership dissolution.

Under the old system, in England and Wales, couples could only prove their marriage had broken down as a result of adultery, unreasonable behaviour or desertion.

But, from Wednesday April 6, they will only need to state that their relationship has “irretrievably” broken down.

The change – part of the changes in the Divorce, Dissolution and Separation Act – aims to remove the element of blame from split-ups, which can complicate a process which is already traumatic and difficult.

From Thursday 31 March the service for dealing with the previous rules will no longer be available, according to HM Courts & Tribunals Service.

Separating couples may find the new system fairer and more amicable – but there are concerns it could lead to an increase in divorce rates.

The divorce rate dropped in 2020, declining by 4.5 per cent to 103,592 cases in England and Wales, according to the Office for National Statistics – but this may just be the calm before the storm as people wait for the new rules to kick in.

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Rachel Freeman, family law partner at Kingsley Napley, said: “This notable drop in the divorce rate shows that lockdown may have enabled couples to work on their relationship and find an alternative solution, or to postpone any decision to divorce during the uncertainty of the pandemic.

“The other possibility is that some couples have been waiting for the no-fault divorce regime which kicks in this April.

“Certainly we have been receiving a lot of enquiries since the start of the new year suggesting there is pent-up demand and the divorce rate will spring back for 2022.”

Should divorce rates rise over the coming months, careful planning will be needed to ensure the impact on finances is minimised.

How might your finances may be at risk and what can you do?

Fiona Turner, partner at law firm Weightmans, said: “It’s important to remember the divorce element only serves to officially end a marriage or civil partnership.

“It’s critical that couples realise that, and still take all the necessary – additional – steps to settle their money matters.”

While there are lots of options separating couples can take when it comes to finances, Ms Turner said full and frank conversations about the value of assets and income was key to achieving the best outcome.

Additionally, all agreements will still need final court approval to ensure they are legally binding and tie up any loose ends.

The ongoing development of the online application process may also prove problematic. Petitioners can apply for a divorce at any time of day or night, and can even do so via the gov.uk website.

This may tempt couples to move through the process too quickly – and the situation colud be even riskier if individuals decide not to use legal representation to make their initial application.

Money will be saved by doing this, but it may result in couples initiating and concluding, their divorce proceedings without considering the ramifications, if legal advice hasn’t been taken in advance.

Ms Turner added: “Serious financial implications could inadvertently arise if a divorce is initiated without consideration of possible competing legal jurisdictions, which would have a knock-on effect on the scope of a financial settlement.

“Similarly, if a divorce is concluded by a Final Order – previously known as a Decree Absolute – before a financial order is put in place, this can cause challenges linked to occupation of the family home, pensions and insurance matters.

“Bringing in legal representation from the earliest stages means couples can secure a strategy that will help them to avoid any unintended consequences.”

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