It is common for many married couples to separate without getting a divorce. However, there are significant risks in doing so, both in life and upon death.
Separated, but still legally married couples should think about how their property, finances and children are protected and provided for in the event of death and going forward with their new, single life. Some food-for-thought if you are in this situation…
- Have you made a formal financial settlement or clean break?
- Does your Will leave everything to your ex-spouse?
- Does your Will or Lasting Power of Attorney leave your ex-spouse in control?
- How is your property owned?
- Have you updated your beneficiaries of your life insurance and pension?
- Were you treated fairly when you separated?
- Has your spouse passed away without your finances being untangled?
In this article, our expert Family and Litigation Lawyers share some insights into the risks, explain what separated couples need to do to protect themselves and give advice on next steps if you need to make or defend a claim against your estate from an ex-partner.
Separated But Not Divorced – What are the Risks?
There are a number of reasons why people might choose not to divorce when their relationship breaks down beyond repair. Many couples will separate, but simply not get around to filing for divorce as they lead busy lives, others may not see any rush to divorce as they have made their own agreements which they are happy with and are not planning to re-marry, others may put off getting a divorce due to the cost or stress of going through the process.
It is not unusual for couples to carry on with their new life or start new relationships whilst still legally married. However, it is important that separated couples understand the risks.
1. No control over your spouse’s finances
When living apart you are likely to have little to no idea on how your husband or wife are managing their finances. They could be running up debts, taking out loans, over-spending, gambling, missing important payments, falling behind on their mortgage etc. which can negatively impact your credit score and ability to borrow in the future.
2. Becoming estranged
The longer couples are separated for, the risk widens for one party moving away or leaving the country and losing contact. This can make sorting out finances or pursuing a claim much more difficult
3. Circumstances can change – for the worse
If your spouse loses their job, becomes ill, suffers an accident or falls into debt then what you receive in a financial settlement once you get around to divorcing could be significantly reduced.
4. Circumstances can change – for the better
Should one of you come into money after separating, it is not guaranteed to be excluded from any financial settlement. Whilst winning the Lottery or receiving a large inheritance may be more uncommon – it does happen. It it is very common, however, for pension funds to grow significantly which can then be tempting for an ex-partner to come after, years down the line. After separating one of you could find yourself receiving substantial promotions, salary increases or be running a successful business venture that could be at risk of a claim.
5. Meeting a new partner
Your spouse could meet a new partner which may influence how they live their life and manage their finances. They could become responsible for a larger mortgage or supporting other children, or they could be dissipating marital assets. Moving on from a past relationship could be complicated if your assets or finances are still entangled.
6. Financial provisions
Your ex-partner could be entitled to financial provisions, even if you separated years ago. You could adjust to your new life and managing your money, to suddenly be hit with a claim for regular financial support or your family could face a large payout from your estate when you are no longer around.
How to Protect Yourself
There are a number of different ways to protect yourself now and also protect your estate after you have died from a claim by a spouse. The best option will depend on your own set of circumstances.
- Get a Divorce and Financial Order
For some situations, it will be beneficial to cut all ties immediately and get divorced. However, the divorce process alone is not solely concerned with legally ending a marriage. A major component is reaching a financial settlement which looks at dividing the couple’s assets between them in a way that fairly reflects each party’s needs and contributions. This Order comes from the court and will end any future claims that you may have against each other. It is often referred to as a ‘clean break’.
- Separation Agreement
If you are yet to decide on getting divorced or now is not the right time for you, then getting a Separation Agreement can help you get clarity. It will set out your financial arrangements such as responsibility for paying mortgages, living arrangements, what happens to debts, savings and joint assets. It can also organise arrangements with children. It is important to understand that whilst a separation agreement is not legally binding, it is likely to be upheld by a court as long as such agreements have been properly negotiated, is fair and meets both parties’ financial needs, and both sides have had independent advice.
- Make a Pre-Nuptial or Post-Nuptial Agreement
If you are not yet married and have concerns about protecting your estate, should you separate, then entering into a Pre-Nuptial agreement is a good idea. Not just reserved for the very wealthy, a ‘Pre-Nup’ is a sensible decision if you own your own property, have children from a previous relationship, own a business, have or are due to inherit or have complicated family circumstances. If you are already married, it isn’t too late to put something in place in the form of a Post-Nuptial agreement, which works in very much the same way.
- Make or Update Your Will
Whether you are writing a Will for the first time, or making amends to an existing one, there needs to be consideration given if you are married but separated to ensure that your assets and decisions about your estate are being made by the correct person. If you are in a new relationship or have children to provide for, it could be devastating to have them unintentionally left out of your Will. If you die without a Will (or without a valid Will) then intestacy rules will apply. In most cases this would mean that your spouse would inherit everything, regardless of the fact that you are separated and living apart. If you divorce, then your Will doesn’t become invalid, but it will be treated as though you had outlived your ex-partner. Changing your Will isn’t entirely watertight and a claim could still be brought, but it would significantly help your case if amendments had been made or a letter of wishes had been included to explain your new circumstances. If you are in a new relationship, but not yet divorced, then you should urgently re-write your Will.
Matrimonial Claims Against Estates
The Inheritance (Provision for Family and Dependents) Act 1975 allows a spouse to claim against the Estate where a Will has not made reasonable financial provision for them, by either cutting them out completely or leaving them too little.
The courts will generally consider that spouses should have reasonable financial provision made for them and in reviewing potential claims of this nature the court will also consider the financial position but may make an award that provides for more than just maintenance.
Section 3 of the Act sets out the following factors as ones which a Court will have regard to when considering a claim under the Act:
- the financial resources and financial needs which the applicant has or is likely to have in the foreseeable future;
- the financial resources and financial needs which any other applicant for an order under section 2 of this Act has or is likely to have in the foreseeable future;
- the financial resources and financial needs which any beneficiary of the estate of the deceased has or is likely to have in the foreseeable future;
- any obligations and responsibilities which the deceased had towards any applicant for an order under the said section 2 or towards any beneficiary of the estate of the deceased;
- the size and nature of the net estate of the deceased;
- any physical or mental disability of any applicant for an order under the said section 2 or any beneficiary of the estate of the deceased;
- any other matter, including the conduct of the applicant or any other person, which in the circumstances of the case the court may consider relevant.
- the length of time for which and basis on which the deceased maintained the applicant, and to the extent of the contribution made by way of maintenance.
- whether and, if so, to what extent the deceased assumed responsibility for the maintenance of the applicant
In addition, to the key provisions of the act, in respect of spousal claims, the court will consider the age of the surviving spouse and the duration of the marriage as well as the contribution made by the surviving spouse to the welfare of the family including any contribution made by looking after the home or caring for the family.
In cases in which a surviving spouse and Deceased were married but separated, courts will often begin by considering the provision that the surviving spouse would have received had the parties divorced. This is often referred to as ‘the deemed divorce test’ and is likely to be the starting point for any spousal claim.
When considering what the surviving spouse would likely have received had this been a divorce, the court will consider their needs including outgoings, housing needs, liability and sharing. Within financial remedies proceedings following divorce, needs are the most important consideration. The length of the marriage is important, but so is the delay from separation to divorce. Within any financial remedies proceedings, the starting point is an equal division of assets with the court considering a departure from equality to reflect needs or contribution. The court would, therefore, need to take into consideration the total value of the Estate as well as the surviving spouse’s assets.
Whilst the deemed divorce test is likely to be the starting point, it is not determinative. The divorce cross-check is just that, a cross-check, no more and no less. It is, like all the other matters to be taken into account under s3, of infinitely variable weight on the facts of each particular case.
Making a Claim
Claims of this nature are complex but at Lamb Brooks we have an experienced litigation department who are skilled in dealing with these both on behalf of the Estate who may find themselves defending such a claim from a loved ones estranged spouse or on behalf of the spouse themselves who have not been sufficiently provided for within a Will.
If you are looking to challenge the Will or make a claim against the estate of an ex-spouse or are a family member, concerned about a claim being made, then please get in touch with our Litigation Team on 01256 844888.
Protecting Your Assets and Making a Will
If you are worried about claims being made in the future, need to update your Will or make sure that you are financially free and separated from an ex-spouse, then please make contact with our Family Law Team or Will Solicitors.
Call Lamb Brooks on 01256 844888, email enquiries@lambbrooks.com or speak to our Online Chat assistant who can help you at any time of day.
Other blogs you may be interested in:
Modern Families: 7 Reasons Why You Should Make a Pre-Nup
A Quick Guide to Life After Divorce
Contested Probate: Thinking About Challenging a Will?
15 Reasons Why it is Important to Make a Will
The contents of this article are for the purposes of general awareness only. The do not purport to constitute legal or professional advice. The law may have changed since this article was published. Readers should not act on the basis of the information included and should take appropriate professional advice upon their own particular circumstances.