Will living with a new partner affect my divorce settlement?

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I am often asked to advise on the thorny issue of how cohabitation might affect a divorce settlement.

In divorce proceedings, there is an ongoing obligation on parties to be open and transparent about their financial disclosure (which includes cohabitation) until a financial agreement or order has been approved by the Court.

An agreement is a contract between the divorcing couple and this invariably leads on to a Financial Order being made by the Court to address how the division of assets and other obligations, like spousal maintenance provision has been resolved.

The Financial Order, often referred to as a Consent Order, sets out the financial arrangements between you and your ex-partner. Approved and issued by a Judge, it makes your settlement legally binding.

Here are some examples of how living with a new partner can impact on financial settlements:

Scenario 1

The ex-husband has been the primary earner, while his former wife stayed at home to look after their children. He meets a new partner who owns a house and earns a good salary.

In this scenario, a Court might consider that the housing needs of the husband are met and may end up giving a more favourable outcome to the wife.

Also, the husband is likely to have less housing costs per month (as he may be sharing these with his new partner) and therefore, he might be regarded as having more “disposable” income from which spousal maintenance could be paid.

Scenario 2

A Divorce has already occurred, and a Financial Order made under which the wife receives maintenance. During the financial settlement process, the wife failed to disclose that she is now living with another person.

The additional household income, or sharing of domestic bills with a new partner, could lead to a substantial reduction in the amount of spousal maintenance being paid.

Scenario 3

Complexities arise in situations where, for example, a former spouse cohabits with a new partner who has dependent children, and particularly if one of those children is disabled.

There is a conventional view that first families come first. Responsibilities to the first family were well known, before embarking on a second relationship.

However, the Court has an obligation and a difficult balancing act to perform, to satisfy the financial needs of two families.

Key considerations

Full and frank disclosure of financial means and changes in circumstances must be given 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.

Please click here to arrange your free initial consultation today and take advice from a member of our experienced Family Law team. This could help you avoid making a costly mistake.

Peter Berry

Associate, Chartered Legal Executive, Wills and Probate

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