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Not getting legal advice on financial settlement can cost you!

Posted: 11/02/20 by DFA Law

Not getting legal advice on financial settlement can cost you!

Many people simply do not get legal advice when their relationship breaks down.

More often than not, this is due to a misconception that legal fees will be extortionate. However, the cost of quality legal advice is generally insignificant in comparison to the assets available for division and ultimately it can make a huge difference to the overall settlement.

We are often consulted by people who have negotiated their own settlement and later regretted it; realising they may not have gotten a ‘good deal’.

Whilst it is understandable that people want a quick resolution of financial matters following a stressful and often emotional separation, it is only in exceptional circumstances that a divorce settlement can be revisited at a later date. If you do not take advice at the time the settlement is reached, you will be stuck with this even if it is unfair.

Cost cutting in the short term may sound appealing, especially after separation, but the most important question should be ‘at what cost?’

Many clients are unsure what assets or circumstances should be taken into account when looking at settlement options and substantial assets, such as pensions, can be overlooked. This results in many people walking away from a marriage/relationship with less than they may be entitled to which, in turn, may have a huge impact on their future financial security.

Others may not even pursue a formal financial agreement at the time of the separation/divorce, therefore leaving financial claims open. This may be because they did not want to incur the costs of formalising the agreement or because they believed that an informal agreement would protect them.

This can lead to conflict at a later date with parties involving solicitors months or even years after they thought matters had been settled. This causes further turmoil, especially when it involves assets that one party had assumed were ‘safe’ from further claim.

Even if there are no assets on divorce, or if financial matters have already been resolved by agreement by the time the divorce is underway, steps should be taken to ensure that an application for financial settlement cannot be made in the future.

There is also a misconception that finalising a divorce alone will prevent future financial claims. This is simply not correct and a claim can be made for financial settlement even after the Decree Absolute is pronounced.

A ‘clean break’ preventing future claims may seem unnecessary in some circumstances, especially when relationships may be amicable at the time of the divorce, however, we cannot predict the future and there is no telling whether one party may have a change of heart at a later date.

A formal court order which provides for a clean break is effectively like an insurance policy - it is there to protect current and future assets from a claim, to include claims on death.

For others, cost cutting may involve advice from non–lawyers or via online services. Caution must be taken, however, as this advice is often by those not legally qualified. New research also shows that these types of advisers often given ‘biased and misinformed advice’. https://www.bcu.ac.uk/research/news-events/online-legal-advisors-are-giving-parents-biased-and-potentially-damaging-advice-research-finds

It is therefore crucial that consideration is given to seeking advice from an expert to ensure that a financial settlement is fair. It provides for future financial security and that any settlement is formalised properly by way of court order (whether by consent or otherwise).

For expert legal advice relating to financial matters on separation or divorce, please call DFA Law on 01604 609560 or via email here and they will be happy to help.

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