Article written by Atifha Aftab, Family Solicitor
When your greatest assets and future finances are at stake, would you risk a DIY divorce? Given the cost-of-living crisis, do the benefits of divorcing without legal advice outweigh the potential pitfalls? In this article, I look at whether doing your own divorce saves you money in the longer term and the potential consequences of a DIY divorce.
What is DIY divorce?
DIY divorce refers to a separation where the couple agree the terms of their divorce between themselves, with no legal representation. They would then draft and file the divorce application with no assistance from a divorce solicitor.
Given the current economic outlook with mortgage rates on the rise, energy bills increasing on a regular basis alongside increased costs for food and travel, it is not unreasonable for people to consider their options. It is therefore not surprising that many separating couples are tempted to opt for a DIY divorce to save on legal fees.
What are the potential problems with DIY divorce?
a) Financial claims
The divorce process does not automatically resolve finances. In order to effect a financial separation, the divorcing couple must reach a financial agreement. This will allow parties to agree how to separate assets, resolve any financial issues and ensure protection in the way of avoiding future financial claims from an ex-partner. This could relate to payment of a lump sum following the sale of a property, pension provisions, inheritance following the death of a family member, a lottery win, or the start of a successful business venture. A claim for a financial remedy can be made against a party who has concluded their Divorce without entering into a financial order. Professional legal advice is therefore extremely important.
b) Tax implications
The financial order is also important in terms of tax implications upon the transfer of property. The UK tax regime tends to protect spouses from Capital Gains Tax and Stamp Duty Land Tax. If the couple divorce before reaching an agreement, they could potentially miss out on such potential tax savings.
c) Remarrying – the ‘remarriage trap’
If a spouse decides to remarry before entering into a financial order from a previous divorce, they will no longer be able to make financial claims against their ex-spouse, even if such claims were reasonable within the divorce settlement. At the same time, if an ex-spouse decides not to re-marry, without a financial order in place, they can still make future financial claims against the other party following the conclusion of their divorce proceedings. This is known as the ‘remarriage trap’.
d) Rectifying mistakes
It must be stressed that the divorce application via the HM Courts and Tribunals Service is not always easy to complete, particularly with regards to the financial aspect, which is crucial to get right. Mistakes can be difficult to rectify. Furthermore, completing the application without legal advice could leave some couples ill-informed in respect of their legal position.
e) When conflict is unavoidable
For many couples, divorce without conflict can be inescapable. In complex or acrimonious divorces, choosing to move ahead without legal support can leave people vulnerable and at risk of achieving an unfair outcome. With the help of an experienced family solicitor, you can benefit from expert advice and analysis based on similar experiences in line with the Matrimonial Causes Act 1973. Such advice and support can help to avoid mistakes that cause unnecessary stress or delays and prevent any unwelcome future “surprises”.