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Many people worry about the costs of divorce and the impact this may have on their finances. The reality is, however, that separating and remaining married can leave your finances significantly at risk.

1. Home rights for Jointly Owned Properties

- One widely-overlooked legality is that both parties have a right to live in the house they share after separation.

- If one person moves out they are allowed to come back and are free to stay when they choose. The only way such a legal right can be formally removed is through legal means such as divorce.

- Spouses or civil partners jointly responsible for a mortgage will both be at risk if one party moves out and stops paying their share. For example, it may be that the person who is staying in the home will want to keep up with the mortgage payments and the party who has moved out and has to pay rent elsewhere will ask why they should continue with such payments. If the payments stop and the mortgage goes into arrears then the house could be repossessed. This could have devastating consequences for both concerned with potential implications in respect of their credit ratings long into the future.

- You may also own the property as “Joint Tenants” this means that on the death of the first joint owner, their share passes automatically to the survivor. It is therefore essential that legal advice is sought so that the Joint Tenancy may be severed. Severance of a Joint Tenancy means that each individual has a share to leave under the terms of their Will.

2. Shared accounts, debts and assets

- Separated couples must also be aware that until they are divorced, their finances remain linked.

- Shared accounts or credit cards will continue unless the provider has been notified!

3. Implications for buying a new property

- Unless divorced, if a party still owning the former family home wishes to purchase a new home then they would be still be liable to pay the government levy for second homes.

4. Post-separation wealth

- There may also be some consequences concerning assets built up or whittled away after separation.

- If one person increases their wealth or builds up their business during the period after separation, this will have to be disclosed when the divorce proceedings take place. Whilst this wealth may not form any part of a divorce settlement it is arguable the sooner divorce proceedings the more likely you are to avoid such issues within your divorce litigation.

5. After death

- A husband/wife has the right to claim against the estate of their spouse or civil partner even if separated and could receive a continuing income as well as capital. This can lead to lengthy and expensive negotiating at a cost to the deceased's estate.

- In a recent case a couple were married for only three weeks before they separated for nearly thirty years afterwards. The wife discovered some thirty years later that her husband had passed away. A judge ruled that as they were still married when the husband died she could indeed have a claim!

- It is therefore crucial in circumstances of separation to make a new Will which, in particular, details why they do not wish their estranged spouse to benefit from their new Will.

The options

It is possible to put in a place what is known as a separation agreement. However, such agreements are not legal binding documents. We would therefore advise that divorce proceedings are issued so that a Consent Order can be entered into. Such an order is binding on both parties, provided that they have been open and honest in respect of their financial positions.

At Ramsdens we are accredited members of Resolution, expert family law specialists. If you wish to discuss divorce or separation please do not hesitate to contact one of our expert family lawyers at any of our offices across West Yorkshire. You can call us free on 08000 147720 to book your free 30 minute consultation.