How Living With A New Partner Can Affect Your Divorce Settlement
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In divorce proceedings, all ex-spouses are required to be open and transparent about financial disclosures (which include cohabitation) until a financial agreement or order has been agreed by a Court.
This agreement is a contract between the divorcing couple and is invariably made an order of the court. It sets out how any property, finances and spousal maintenance should be shared between them post-divorce.
The Financial Order, also known as a Court Order, sets out the financial arrangements between you and your ex.
Approved and issued by a Judge, it makes your terms legally binding.
The thorny issue of how cohabitation affects divorce settlements can differ from case to case and have long-lasting monetary and lifestyle implications on a former spouse.
Here are some common scenarios:
The ex-husband has been the primary earner throughout the marriage while his former wife stayed at home to look after their children. He meets a new partner who owns her house and earns a good salary.
In this case a Court may consider that the housing arrangements of the husband are resolved and may then give a more favourable view of the wife’s position. It could be her entitlement to remain for a period of time in the property or to receive a more generous share on sale.
The husband will also have less housing costs (as he may be sharing these with his cohabitee) and therefore will have a greater disposable income from which to pay maintenance.
A husband and his former wife have undergone divorce and a financial order has been agreed in which she receives maintenance. During the financial settlement process, his ex-spouse fails to disclose that she has been living with a younger man on a low-income.
The Court would need to be satisfied that the wife’s financial situation was much improved by the cohabitee sharing housing costs and she may risk a reduction in maintenance. If the cohabitee was earning a substantial income, this could also have an impact by a reduction in the maintenance.
Complexities arise in situations where, for example, a former husband on a good salary has been cohabitating with a new partner who has four children, one of whom is disabled.
There is a conventional view that first families come first. The husband in this instance was aware of his responsibilities to his first wife and family before he embarked on a second relationship. However, in this case the Court has a difficult balancing act to satisfy the financial requirements of 2 families.
Important issues to consider
As an ex-spouse you must give a full and frank disclosure of your financial means to your ex and vice versa right up to the point that the Court Order is approved.
If you start living with a new partner before the financial settlement is agreed or have an intention to do so after the divorce - and have not disclosed the relationship or intention while negotiations are ongoing - your settlement can be changed when it is later discovered.
The outcome could result in a change in the terms of the order and the possibility of paying the court costs.
If you are unsure of your position on cohabitation while divorcing, I urge you to seek advice from an experienced family lawyer.