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This month marks the biggest change to divorce laws in almost 50 years — the ‘no fault’ divorce.

Under the Divorce, Dissolution and Separation Act 2020, married couples in England and Wales who want an immediate divorce — rather than separating for at least two years — no longer need to apportion blame for the failure of their marriage.

What will this mean for advisers who deal with divorcing clients?

Greater opportunities?

Law firms expect a spike in the number of people filing for divorce as many couples have chosen to wait until the law changed.

According to Vanessa Friend, a partner in the family team at law firm Hodge, Jones & Allen, advisers who are accredited with family law organisation Resolution and those who specialise in pension sharing on divorce will be particularly busy.

Meanwhile, JM Finn head of wealth planning Anna Murdock says: “Under the new rules, joint applications can be made. This means couples who have separated but were deterred from applying for a divorce, due to the ‘blame game’, may now seek one.”

Where a divorce is amicable, couples may seek an informal financial settlement. This should be discouraged

However, some commentators fear couples may take amicable separations to the extreme, opting for a DIY divorce with no input from legal and financial experts. This may save costs in the short term but ultimately could prove expensive.

Ceri Griffiths, founder of St James’s Place partner practice Willow Brook Lifestyle Financial Planning, says: “As a financial planner, that is a red flag. Without the input of a legal team, it is difficult to get an equitable outcome and clients don’t necessarily get what they should.

“It’s not as easy as splitting everything 50:50 or saying, ‘Your assets are my assets.’”

Trusts can offer protection of assets, but may not be suitable for everyone

Adroit Financial Planning head of financial planning services Neil Jefferies agrees. If couples do not get advice and fail to correctly evaluate their assets, he says, it may result in serious financial loss that cannot be rectified.

Knock-on effects

Some commentators say better relationships between divorcing couples should have a positive impact on negotiating settlements, but this cannot be assumed.

“Even in cases where married couples have divorced after two or five years’ separation, conflict still arises,” says Emma Davies, a partner at law firm Nelsons.

Simon Beccle, partner at law firm Payne Hicks Beach, is solicitor to Tini Owens, who was told by the Supreme Court in 2018 she could not divorce her husband of 40 years just because she was unhappy. As her husband contested the divorce, Owens had to wait until they had been separated for five years before being allowed a clean break.

Without the input of a legal team, it is difficult to get an equitable outcome

“The introduction from 6 April will not affect the financial process, the financial outcomes of divorce or financial planning,” says Beccle. “It will only affect the divorce process itself.”

This means the nuts and bolts of the planner’s job will not change and financial arrangements relating to divorce may still be complex.

“Where a divorce is amicable, this could encourage couples to agree an informal financial settlement,” says Charles Stanley director of financial planning Alexandra Price.

“This should be discouraged as a formal arrangement is needed to finalise financial arrangements and stop any further claims.”


A common misconception is divorces will be quicker under the new law. However, the statutory 20-week cooling-off period and the gap between the conditional and final orders of divorce mean it will take at least six months compared to a few months under the old system.

People who would otherwise have taken the separation route to divorce may have less time to plan for finances under the new law, which could present a challenge.

“This is especially so for anyone with a significant inheritance as half of this could be lost in the divorce process and, as a result, will fall outside the family bloodline,” says Equilibrium Financial Planning chartered financial planner Ben Rogers. “Trusts can offer protection of assets, but may not be suitable for everyone.”

Under the new rules, joint applications can be made

More divorces among clients may be a double-edged sword for advisers. Julian Ribet, founding partner of family law firm Ribet Myles, says although one partner and their share of the marital assets could potentially part company with the adviser after the divorce, the adviser could also pick up newly divorced clients — women who are now managing wealth in their own right, for example.

However, the no-fault divorce may change the dynamics so the same adviser can serve both clients, according to Ribet’s colleague, Ribet Myles founding partner Alistair Myles.

It remains to be seen how a more collaborative approach to divorce will affect financial planning.


source 6/4/22


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