The importance of tying up lose ends

The recent case, reported in the media of Kathleen Wyatt, emphasises the need to ensure that all financial matters are finalised at the time of divorce and recorded in what is known as a Clean Break Order providing for a dismissal of each party’s claims against the other irrespective of future circumstances.

If this is not done, or if you are already divorced and did not obtain a final Order, then you must review your situation because this case means that you may now face claims based on the wealth acquired after the divorce.
In the case of Kathleen Wyatt, she had married her husband Dale Vince in 1981 when they were penniless travellers living a new age lifestyle. They divorced, with one child, in 1992. In 1995 Vince founded Ecotricity, now one of the UK’s biggest green energy companies. He is said to be worth £107m.

Kathleen has made an application to the Court for a part of his fortune claiming that he allowed her to be destitute, bringing up their child, while he developed his business.

You may think that this case is one which, because of the money involved, could not have any relevance to you, but it is the principal behind the findings of the Supreme Court that are important.

Previously, we had thought that any wealth acquired post separation was protected irrespective of there being no final Order. That is clearly not now the case, so, if you win the Lottery, or indeed acquire wealth for example through the sale of business interests, your former spouse could make a claim and the Court will be bound to consider that claim.

That is not to say that the Court will order a payment to be made – it will depend on all the circumstances, and indeed, in Kathleen’s case, all that the Court has done thus far is to say that she can pursue her claim and is likely to be successful in achieving a modest sum based on the particular circumstances of her case, but how much she is to receive has yet to be decided.

So – the moral of the story is that you should ‘tie up all the lose ends’ at the time of your divorce – even if at that time, there is nothing to be shared.

by Deborah Allen from the King’s Lynn office