by Ben Rogers, Chartered Financial Planner at Equilibrium Financial Planning

From April 2022, UK laws will allow for no-fault divorce, which means no wrongdoing needs to be proven for a divorce to be immediately granted. Under current rules, married couples seeking divorce must either state one party is at fault or undergo a two- or five-year separation.

When a couple divorces, structuring and dividing finances is a critical part of the procedure, although not always the easiest. Ben Rogers, Chartered Financial Planner at Equilibrium Financial Planning discusses how the updated divorce laws will affect financial planning.

Ben Rogers, Chartered Financial Planner at Equilibrium Financial Planning, said: “One of the key results that the no-fault divorce seeks to achieve is to make divorces more amicable as neither partner needs to pin blame on the other, they can simply agree that the marriage is no longer working. This in itself should make conversations about financial planning for each partner and any children easier for everyone involved, which is a clear benefit.

“At present, if couples do not want to attribute blame, they need to be separated for two years if they both consent in writing to the divorce or five years if only one partner has filed for divorce. As this will no longer be necessary under the new laws, this means there may be less time to plan for finances following a divorce, which could present a challenge, especially if the couple has children or complex family structures. This is especially so for anyone with a significant inheritance as half of this could be lost in the divorce process, and as a result, will fall outside the family bloodline. Trusts can offer protection of assets, but it may not be suitable for everyone.

“However, a lot can change in terms of finances in two or five years, so no-fault divorces may end up in fairer and more accurate division of finances than if the couple were separated for half a decade before becoming officially divorced.”