September 24, 2014

Jumping into a new relationship? Beware it may affect your divorce settlement

High court judge Mr Justice Mostyn has warned divorcing wives to keep away from new romances or risk jeopardizing their financial settlement.

In a written ruling, he said the start of a new relationship could be a “significant fly in the ointment” to judges in the family court when deciding how much ex-wives should be awarded.

Women, according to Mr Justice Mostyn, were at risk of being given a reduced settlement as judges might assume they were living with a new partner and that their financial future was assured.

His comments were made about a family court case in Swansea in which a divorced couple in their 40s had been involved in a lengthy argument about how to share their assets.

During the dispute, the wife started a new relationship but did not advise the court. As she was still in the relationship, Mr Justice Mostyn awarded her only £250,000 of her ex-husband’s considerable inherited wealth, stating that if she was “assuredly single and I could foresee that continuing, I would have my doubts as to whether a net capital position, excluding pension, which will not be accessed for a long time, of just over £250,000 would be enough. On the other hand, I cannot ignore the existence of the relationship.”

Whilst it might be assumed that this stance is sexist, the same approach could be applied equally to men, if they are found to be in a similar situation.

When deciding the amount to be paid in a divorce settlement, judgement is made after the facts have been presented to the court. If one of the parties is now in a relationship and co-habiting, a judge will ask what financial contribution is made, or should reasonably be made, by this new partner to the ex-spouse’s needs.

Whilst post settlement cohabitation with someone new does not automatically bring spousal maintenance to an end, it can be very important, as it signifies a change in circumstances. It is not the cohabitation in itself that might result in a variation of maintenance, but rather how it alters the resources and needs of the recipient.

We always advise our clients to disclose if they are cohabiting or have a definite plan to cohabit when seeking a financial settlement. If they fail to do so they run the risk of any order for division of assets being set aside.

Did being in a new relationship affect your settlement? Should cohabiting with a new partner make a difference on the final financial outcome?

If you have any questions or concerns about your divorce and are worried about how your assets should be divided, please call us on 0113 246 0055, leave us a comment below or drop us an e-mail.