Warning: The Dangers of Divorce Without a Financial Settlement

What Are the Risks of Divorcing Without a Financial Settlement?

Future financial claims

Either ex-partner can apply to court long after the marriage ends and claim a share of assets or income. The claim remains possible until a financial order is made and approved by a judge.

Changed financial circumstances

Future events such as an inheritance, a lottery win, or business success can all become targets for a new claim. The court looks at each person’s finances at the time of the claim, not at the time of divorce.

Informal agreements are not binding

Private or verbal deals carry no legal weight. One person can change their mind, and the court will not enforce an agreement that was never made into an order.

Remarriage consequences

Once remarried, a person loses the right to claim against their former spouse. However, the former spouse keeps the right to claim against them. This rule catches many people who thought their divorce had ended everything.

No protection against debt

Without a clean break, creditors may still pursue one spouse for joint debts or liabilities linked to the other. A clean break order cuts that link and prevents being drawn into an ex-partner’s financial problems.

Inheritance and death

If one person dies before a financial order is made, the surviving ex-spouse can still make a claim against their estate. They may be treated as a dependant or a widow/widower under inheritance law.

Do I Need a Financial Order?

Yes, a financial order is required to make any financial agreement between divorcing spouses legally binding and enforceable by the court. Without a financial order, promises by one spouse to sell a property, transfer a lump sum, or divide savings can be changed or withdrawn at any time, making future disputes more likely.

A divorce alone ends the marriage, but it does not sever the financial ties created by marriage. Until the court approves a financial order, either party can bring a claim against the other’s assets, income, or pension, even many years after the divorce has been finalised.

A sealed financial order records the full terms of the financial settlement, provides legal certainty, and prevents further future claims. It is the only document that guarantees finality and protection for both parties once the marriage has legally ended.

Most financial orders include a clean break clause, which ends all future financial claims between former spouses. It covers income, capital, pensions, and inheritance. It gives both parties full financial independence and prevents any further obligations or disputes once approved by the court

How to Formalise a Financial Settlement In Divorce

A court-approved financial order gives legal finality and prevents future claims. The process is simple once both people agree.

1. Negotiate an agreement

Reach an agreement directly between you, through mediation, or with a solicitor on how to divide property, pensions, savings, and debts.

2. Apply for a Consent Order

A solicitor drafts the consent order and completes Form D81 (Statement of Information) showing both parties’ finances. You both sign and submit the paperwork to the court.

3. Get judicial approval

A judge reviews the agreement to confirm it is fair. When approved, the order becomes legally binding and can include a clean break clause that ends all future claims.

When can I apply for a financial order? You can start the process once the Conditional Order (Decree Nisi) is granted. Aim to finalise before applying for the Final Order (Decree Absolute) so your finances are protected as soon as the divorce completes.

If agreement cannot be reached, either party may apply for a Financial Remedy Order by submitting Form A, followed by full financial disclosure on Form E. The court will then determine a fair outcome through a structured process of hearings.

Is It Ever Sensible to Divorce Now and Deal With Finances Later?

Sorting finances later might feel easier when both people agree or want the divorce finalised quickly. It allows you to move on emotionally and remarry sooner. For simple cases with no assets, that may work temporarily.

The drawbacks outweigh the benefits for most couples. Until the court approves a financial order, there is no legal closure. Future relationships, property purchases, or pension contributions all remain vulnerable to claim.

Waiting years to finalise the division of money and assets through the court often makes disclosure harder and increases the risk of dispute.

The safest approach is to manage both processes together. Finalising the divorce while preparing the consent order so the court can approve it at the same time.

The Wyatt v Vince case

The Supreme Court decision in Wyatt v Vince (2015) is the clearest example of what can happen when no financial order is made.

Kathleen Wyatt and Dale Vince divorced in the 1990s when they had little money. Years later, Mr Vince became a multi-millionaire after founding a green-energy company.

As no financial order had been made at the time of their divorce, Ms Wyatt was able to bring a claim nearly twenty years later and received a £300,000 settlement.

The case shows that financial claims can remain open indefinitely until a court order formally ends them.

How we can help you

If you haven’t done so already, use our free divorce settlement calculator to get an insight into what you are entitled to and how specific assets can be divided.

While a DIY divorce might seem appealing, especially when you’re eager to move on, it’s essential to take a step back and consider the potential consequences.

Unresolved financial issues can turn what was meant to be a straightforward process into a protracted, expensive ordeal.

It’s recommended to seek legal advice before proceeding with a divorce, especially when there are significant financial matters at stake.

This doesn’t necessarily mean you’ll need to hire a lawyer for full representation, but even a consultation can provide valuable insights and help you avoid potential pitfalls.

Remember, divorce isn’t just about ending a relationship; it’s also about safeguarding your financial future.

Be cautious, be thorough, and don’t rush the process.

Get a free initial consultation by calling 01793 384029 or speak to a live chat adviser.