A financial adviser can advise on issues such as how to divide assets in the most tax-efficient way and how to invest the proceeds of a divorce settlement.
Latest statistics (published December 2012) estimate that 42% of marriages in England and Wales end in divorce. There are important steps you should take to protect your financial position as soon as it is clear that you are going to separate from your partner.
Taking immediate action as soon as you decide to separate
Separating, or filing for divorce or dissolution of your civil partnership is a highly stressful time, but it is in your interest to try to agree urgent, short-term financial matters with your ex-partner. If you cannot agree or are worried your ex-partner may deal with the finances without telling you, think about what you can do to protect your position and take legal advice as soon as you can.
Home rights if you are married or in a civil partnership
If the family home is owned in your ex-spouse or civil partner’s sole name, you should look at registering without delay your interest at the Land Registry in England and Wales using a ‘matrimonial home rights notice’.
If the property is not the family home you may be able to register a ‘restriction’ at the Land Registry. Both the home rights notice and the restriction will protect you as far as possible from your ex-partner trying to sell, transfer or mortgage the property without your knowledge or agreement.
Home rights if you are cohabiting
The position for cohabiting couples in England and Wales is that the non-owner can choose to make contributions towards the mortgage or the running of the home. However, this does not mean that the non-owner will be entitled to a financial share of the home, unless a legal agreement exists to say they will.
In addition, the owner will be able to:
evict the other person without getting a court order
rent out or sell the home without the other’s agreement
take out a loan against the property without the other’s consent.
Home rights in Scotland
In Scotland, it is not possible to register either a home rights notice or a restriction in the Land Registry. The Scotland Land Registry would only be of assistance in Scotland to determine who owns a property.
Both a ‘non-entitled’ spouse/civil partner and ‘non-entitled’ cohabitee (provided he or she has been living with his/her partner as ‘husband and wife’ or civil partners) have to apply to the court to have their occupancy rights declared. Once declared, those occupancy rights can remain in place for a renewable period of up to six months.
Contacting your mortgage provider
Depending on your circumstances, you may need to speak to your lender to explain what has happened and discuss how you’ll manage the mortgage repayments. Prior to doing this, it may be best to seek professional advice and come to an agreement with your ex-partner regarding your interim finances (until a final settlement is reached).
Read our guide What to do about a mortgage during separation
Contacting your landlord if you rent
You may be able to arrange to continue the tenancy in your name alone or you may be able to transfer the tenancy to your ex-partner. However, it may be best to do this after you have taken professional advice and had discussions with your ex-partner about arrangements regarding where you are going to live and how the finances will be managed in the future. For more information, read our guide:
What to do about the home you rent during separation
Protecting other financial assets
Apply to the court for an injunction (interdict in Scotland) if necessary to stop your ex-partner from disposing of, transferring or selling assets or from moving assets abroad if this would prevent a fair settlement. This is a complex area of law, often needing urgent action without first informing your ex-partner. If you have concerns about what your ex-partner may be doing with their assets then seek professional advice as soon as you can.
Read our guide Get professional help with your divorce or separation
Contacting your bank, credit card and any other providers
If you have joint accounts or loans with your ex-partner, and especially if the breakup isn’t amicable, you should contact your bank, credit card and other providers to explain what has happened. You can instruct them to stop your ex-partner running up any new debts or withdrawing funds.
Freezing the accounts will affect you both so make sure you think about this carefully. It will mean that you can’t access the account either, so you will need to make agreements to make sure you have access to cash while things are being sorted out.
You’ll also need to make agreements to ensure that any joint bills can still be paid, for example by Direct Debit or standing order.
Contact us for further help and advice, we are happy to help
Mike Oliver Associates are directly authorised and regulated by the Financial Conduct Authority