Yesterday’s Supreme Court judgement in the case of Wyatt and Vince is a timely reminder to separating couples to act swiftly in dealing with their financial claims on divorce. Whilst the circumstances of the case are unusual, the relevant law applies to all divorcing couples, regardless of wealth.
The husband, Dale Vince, and wife, Kathleen Wyatt, had a short marriage, with two children. They were divorced in 1992. During the marriage, and many of the years following, both had very little money to live on. Only after the late 1990s did Mr Vince become wealthy due to the success of his business, Ecotricity. He is now a multi millionaire, whilst Ms Wyatt is living in a former council house, in poor health and has been reliant on benefits and low paid work. Ms Wyatt made a claim in 2011 for a share of his assets, on the basis that when they divorced, the divorce court did not deal with their financial claims at the time. She argued that this left open the door to her making a claim, despite the lapse of time since the divorce. The Supreme Court agreed with her.
Divorcing spouses have the right to make claims on each others incomes and assets. There is no time limit on making these claims, and only a court can dismiss them. What this means is that even where a couple have divorced, if they have not had their financial claims dealt with by the court, they will still be able to bring claims at any time in the future, provided they have not re-married.
This could apply to many divorced and separated couples. It is not unusual for people to divorce or separate, and make their own informal ‘DIY’ agreement about finances. Whilst this might work in the short term, it doesn’t prevent either person applying to the court, should their circumstances change in the future. Whilst most of us will not be fortunate enough to acquire wealth on the scale of Mr Vince, inheritances, payment of pension lump sums, promotions at work and increases in property values could all be sufficient to prompt a claim by an ex spouse.
If you have divorced or separated, or are going through this process, it is essential to get advice about how to deal with finances. Family mediation and collaborative family law are ways of reaching agreement about finances without going through acrimonious court proceedings, and once you have come to an agreement, a consent order can be submitted to the court for approval, so that you both have the peace of mind of knowing your claims have been dealt with.
A further important reason not to delay in sorting out finances on divorce is that it may well prejudice any claim you have. The fact that Ms Wyatt has waited well over 10 years after Mr Vince started to amass his fortune before making her claim, will mean that she is likely to get substantially less than she would otherwise have been awarded. If you think you may have a claim, act swiftly.
Whether or not you or your spouse are millionaires, it’s important to get advice early about what you can do to reach a settlement which is fair and protect your financial position in the longer term.