DIY Divorce and Financial Settlements: What You Need to Know Before Signing an Agreement

Separating couples are increasingly choosing to deal with their divorce online. For many, it can feel like a quicker, more affordable and less confrontational way to move forward.

If you and your former partner have already agreed how your finances should be divided, it may seem that the difficult part is over. However, before anything is finalised, it is important to understand exactly what you are agreeing to and how that agreement could affect your future.

Reaching an agreement is only part of the process. The real question is whether you fully understand the legal and financial implications of that agreement and whether all relevant assets and future claims have been properly considered.

Financial Settlements Are Not Always Straightforward

Your finances are often more complex than they first appear. A financial settlement can involve a wide range of assets and liabilities, including:

• The family home and any other property
• Savings and investments
• Pensions
• Business interests
• Debts and liabilities
• Ongoing maintenance obligations

There may also be future financial claims that need to be formally resolved.

It is easy to focus on the assets that are most visible and overlook issues that could have a significant impact on your long-term financial security. What appears to be a fair agreement today may not always be the best outcome once every aspect of your finances has been properly considered.

The Importance of Looking Beyond the Family Home

Pensions are a good example of an asset that is sometimes overlooked.

Many people naturally focus on the family home because it is the most visible and immediate asset. However, pensions can often be one of the most valuable assets within a marriage.

A spouse may agree to retain a greater share of the equity in the family home without fully appreciating the value of the other spouse’s pension arrangements. Without obtaining advice, it can be difficult to understand whether the overall settlement is balanced and fair.

Understanding the true value of all assets can help ensure that decisions made today do not result in financial difficulties later.

Why a Consent Order Matters

Once an agreement has been reached, it is usually important to record that agreement in a Consent Order.

A Consent Order is a legal document that sets out how the financial settlement is to be implemented. Once approved by the court, it makes the agreement legally binding and can provide certainty for both parties moving forward.

Without a Consent Order, financial claims between former spouses can, in some circumstances, remain open long after the divorce itself has been finalised.

The Court Cannot Give You Legal Advice

When a Consent Order is submitted, a judge will review it before deciding whether to approve it. This provides an important safeguard within the process.

However, it is important to understand the court’s role. The judge is not there to advise either party on whether the settlement represents the best outcome for them.

The court will not identify assets that may have been overlooked, explain the consequences of certain provisions or advise you on the strength of your legal position. Its role is different from that of an independent family solicitor acting in your interests.

Understanding the Difference Between Drafting and Advice

It is also important to understand the difference between legal drafting and legal advice.

Many online services offer assistance with preparing financial orders and court documents. These services can be useful in helping couples formalise agreements they have reached.

However, preparing a document is different from advising you on your legal rights and obligations.

A drafting service will often work from the information and instructions it is given. It is not necessarily assessing whether the agreement is fair, considering whether assets have been missed or advising on whether the proposed arrangements are likely to meet your future needs.

Obtaining legal advice allows you to understand the wider implications of what is being agreed before anything is finalised.

Independent Advice Protects Both Parties

Family solicitors are unable to act for both parties where there is a conflict, or potential conflict, of interest.

This is an important safeguard. Each party is entitled to understand their own position, receive advice based on their individual circumstances and make informed decisions about their future.

Seeking independent legal advice does not mean that an agreement has to be revisited or that matters will become contentious. More often, it provides reassurance that the settlement has been carefully considered and properly documented.

Legal Advice Does Not Mean Conflict

Many people worry that involving solicitors will make matters more confrontational. In reality, that is often not the case.

If you and your former partner have already reached an agreement, specialist legal advice can help ensure that both parties understand the implications of that agreement and that the final order accurately reflects what has been decided.

Obtaining advice can provide clarity, certainty and peace of mind while allowing matters to remain amicable and constructive.

Protecting Your Future

For many people, the financial arrangements made during a divorce can have a lasting impact on their future. Seeking legal advice at the earliest opportunity can provide valuable clarity and peace of mind. At the very least, obtaining advice before signing a Consent Order can help ensure that all assets have been properly considered, any future financial claims are addressed appropriately, and the agreement accurately reflects your intentions.

A relatively small investment in legal advice at the outset can help avoid uncertainty, unexpected consequences and potentially costly disputes in the future.

At Ridley & Hall, our experienced Family Law team regularly advises clients who wish to keep matters as amicable and straightforward as possible while ensuring that their financial settlement is legally binding and fit for the future.

If you would like advice about a financial settlement following separation or divorce, please get in touch with our Family Law team. Call us on 0800 860 62 65 or email on info@ridleyandhall.co.uk