If your relationship has ended and you are still married but separated from your spouse, you need to be aware of the financial implications. You will be in a unique...
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If your relationship has ended and you are still married but separated from your spouse, you need to be aware of the financial implications. You will be in a unique position, still bound by the ties of a legal marriage but no longer living with the person with whom you have a financial bond.
It is crucial that you fully understand your circumstances as your spouse could take actions that have severe negative impacts on you. In this blog, we will look at the potential disadvantages of being separated but not divorced, the financial issues you need to consider, and the ways we can help you to protect yourself.
If you would like to discuss the legal aspects involved in the ending of a relationship, contact our separation solicitors at Sharp Family Law.
What are the financial disadvantages to separating but not divorcing?
A marriage is a financial commitment for life to another person, and this can only be ended by a financial order of the court, typically made at the time of a divorce. If you separate, you will still be jointly liable for debt incurred by your spouse on joint credit cards and overdrawn joint bank accounts. When you are no longer living together, you might be unaware of the extent of their expenditure.
There is a risk that they could take on debt or mortgage property, which could negatively impact you. You are also vulnerable to struggling to obtain credit or a mortgage for yourself. Excess spending will also reduce the amount of money available to be split during a future divorce.
If you do not divorce immediately, your spouse could take the available time to try and move or hide assets so that when you do ask the court for a financial order, they appear to have less money than is actually the case.
There is also a chance that your spouse’s financial position could weaken, which would lead to you receiving e a smaller financial package on divorce. For example, if your spouse lost their job or became sick, the court could decide that they require a larger share of the matrimonial assets.
If you reduce your standard of living during your separation, the court may consider that you do not need as much to live on in the future if you are able to cope on a lesser income than when you were together.
What are the other separated but not divorced legal issues to be aware of?
Until you are divorced, you will be unable to marry someone else, and if you wait until you are in a new relationship to start the divorce process, then your spouse could claim that you no longer need as much financial support.
Furthermore, should one of you pass away during the separation, your Will would still take effect. If you do not have a Will, then the Rules of Intestacy state that the majority of your estate would pass to your spouse.
Can I buy a house when separated but not divorced?
We would typically advise against buying a house when separated but not divorced. Since the starting point for a financial award in divorce is a 50:50 split, this could put your new property at risk.
If the property were to increase in value, your spouse could have a claim, even if they are not a legal owner. In the event that you are not able to provide your spouse with the money they are awarded during a divorce, the court has the power to order the sale of a property and the division of the sale proceeds.
What happens if I’m separated but not divorced and my spouse dies?
Should your spouse die while you are separated but not divorced, their Will takes effect. If you had divorced, you would not inherit under their Will, even if named, as divorce has the effect of removing a spouse from a Will.
If they do not have a Will, the Rules of Intestacy state that a spouse and children inherit the deceased’s estate. If your spouse had children, then as the spouse, you will be entitled to the first £322,000 from the estate, plus all of the deceased’s personal possessions.
The remainder of the estate will be split into two. You will inherit one half, and the children will share the other half equally. If your spouse does not have children, then you will inherit everything.
What are separated but not divorced inheritance issues?
If either you or your spouse inherits money during your separation, there is a risk that it could be used to pay your spouse when a financial order is made.
While the money may be classed as a non-matrimonial asset if it was received after the separation, if the court feels that your spouse has need of a share of it, then you face risking some or all of the money.
How can I protect my position if I am separated but not divorced?
If you do not intend to divorce immediately, for example, for religious reasons or because you are facing the emotional challenges of leaving a partner, then you should consider putting a separation agreement in place. This is a contract setting out how your assets and liabilities will be split and how you will deal with other issues, such as providing for children and maintaining property.
This offers you and your spouse the chance to thoroughly consider how exactly you want matters dealt with. You will be able to clarify the situation and what is expected of each of you, which can avoid conflict and make any future divorce quicker and easier.
Your solicitor will be able to negotiate the terms of the agreement on your behalf and suggest ways of resolving disagreements should any arise.
If you do decide to go through with a divorce, the court will usually follow the terms of a separation agreement, provided that your circumstances remain broadly the same, you both made full financial disclosures, and took independent legal advice before signing the document.
What are the disadvantages of legal separation UK?
The main disadvantages of being legally separated but not divorced are financial. If you are separated but still legally married, you will still have the legal ties and obligations of marriage.
While a separation agreement will help to protect your position, as far as other organisations such as banks, mortgage lenders and credit agencies are concerned, you are married, and they will treat you as such. This means that you could struggle to obtain a mortgage or be affected by excessive spending on the part of your spouse.
If your spouse were to run up a large credit card debt on a jointly held card, you would be liable for this, particularly if they are unwilling or unable to clear it. If they were to fail to pay the mortgage on your jointly owned home, the bank could repossess it.
For more information about our services, see our separation agreements page.
Get in touch with our separation solicitors
If you are going through a separation and you would like advice and guidance from an expert separation solicitor, contact our family lawyers today.
You can contact us in Bath, Bristol, or Bradford on Avon, or fill in our online enquiry form and a member of our team will be in touch.