No Fault Divorce & The Protection Of Your Finances.

On the 6th April 2022 “No Fault Divorce” was officially introduced in the United Kingdom.

Considered a dramatic reform, the legislation ends the necessity for “fault” as part of a divorce ruling. The new “No Fault” system will allow couples to separate without one of them having to take responsibility (colloquially known as blame) for the marriage coming to an end.


While this is no doubt considered a positive change in the English Legal System, the admission of “fault” will not simultaneously bypass the sensitive and difficult topic of finances in divorce. Fortunately, there are legitimate, safe and mutually effective ways of planning finances through divorce, whether fault is present, or not.


Let’s begin with one of the biggest concerns of all. One’s own Children.


The continued protection of your children in the years before and after your death will be of paramount importance in anyone’s mind when they’re facing separation from their partner, as they will also be separating their own household income from another’s, too. Now, the question must be asked, has no fault divorced increased the chance of the bloodline inheritance from falling at the first hurdle?


If a couple were to split amicably, and then were to find new love and lives elsewhere, is it possible that this will have a negative impact on the potential inheritance received by their children? Is it possible that, despite separation, either member of a divorced couple may decide that they (and their new family) deserve a share of one’s assets when you have passed? How does a “new” family dilute what you had in mind for your children to inherit from you initially?


There are a lot of potentially unfavorable situations that emerge here, all of which will create a threat against your wishes, and what your children will stand to gain from your inheritance.

Fortunately, halting this threat is easy, thanks to trusts.


Instead of your assets passing directly to your offspring, a trust gives you the opportunity to leave your wealth to an entirely independent entity. A trust has any number of potential “beneficiaries”, whom you name at your discretion. These can be children, grandchildren, friends, charities, and more. These are the people and entities who stand to gain from your assets.


Similarly, you will elect “trustees”, who’s role is to ensure the wishes you leave will always be honored.


With that said, trusts and trust structure remain complex, and there is no one-size-fits-all answer to how your trust should be organised. If you are looking for advice on trusts, click here to speak to Andrew, who is an expert in these matters.


As the beneficiaries of your trust do not own the assets they inherit and the trust does, these are not included in any divorce settlement, therefore, the assets remain safe from anyone who you deem undeserving of the funds.

If you are going through a divorce, what considerations should you have regarding your own finances and looking after your family?


Well to begin with, lets consider protecting the maintenance payments that you may have agreed.


What would happen if the partner making those payments becomes ill and can no longer work and earn? Even worse, what are the consequences of them passing away while still required to make the payments?


It becomes important to consider life cover to provide a lump sum or income on death or an income protection plan in the event of long-term ill health.


What about moving forwards and financially been able to retire when you originally hoped?


During a divorce an agreement may be made on existing pension plans, but what about any future funding? Has this been considered in any financial settlement? What difference does it make to either partners plans, age of retirement or income need when they get there?

Finally, of course, your Wills will need to be updated.


Unlike marriage, divorce does not necessarily mean that any plans you have made in relation to your death will need changing, but an update of your will should be considered if you feel as if you want to alter the destination of your assets if your partner is due to inherit from you, and you no longer wish for that to be the case.


You should also be considering Lasting Power of Attorney’s an essential at any age, but even more so when you find yourself single again, and possibly with children.

Of course, the new No-Fault Divorce system provides an alternative to slogging it out in the ring of court, like many couples do, whether they intended to at first or not, but it does not change the implications of financial impact, and steps must still be taken to protect your future, and the future of those you care about.


The guidance above is an insight to the guidance provided by the advisors at The Calder Group. To begin protecting your future with us, use the contact form below.


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