In the midst of a worldwide pandemic, it can be difficult to make the decision to move forward with divorce. In most instances, delay can be unwise. It’s important to consider the practical and immediate risks of delay.
Four key issues you should consider are:
- Standard disclosure of your husband or wife’s financial position usually only goes back 12 months from the start of the process;
- An unscrupulous spouse may try to hide assets or dissipate them in the intervening period;
- The tax implications of separating; and
- Potential complications of new partners and children.
Standard financial disclosure
In court proceedings, standard financial disclosure of your and your spouse’s financial position usually only goes back 12 months. However, with mediation and other voluntary processes it may only go back three or six months.
Your husband or wife may embark upon a spending spree post-separation, thereby depleting the financial resources available for distribution. In cases where there is a deliberate attempt to put assets out of reach, such as transferring money to a friend or relative, it is possible for the court not only to prevent such transactions but also to set aside ones that have already occurred. As such proceedings are also costly, it’s best to take preventative action where possible.
In the midst of marriage difficulties this may be the last thing on your mind. It is, however, vital for you to seek advice on the tax implications of separation, divorce and any proposed settlement at the earliest opportunity. More detail about the common tax issues that need to be considered are outlined in this article.
New partners and children
As time passes, you or your spouse may find new partners and have new families. A new child will, of course, have financial implications as there will be a further dependant for the court to consider. While having a new partner in itself does not make a difference to the financial outcome, it does run the risk of making it harder to reach an amicable settlement.
What to do
It is important to get advice at an early stage so that you can make an informed decision about what to do and when.