Should a claim be triggered by an expectant prodigal spouse, a court’s starting point is to value the parties’ respective assets as at the date of trial. This could be 20-plus years after separation. Memories of witnesses fade, documents are lost and delay can significantly increase the risk of injustice.

A tension exists between differing court rulings on the issue of separation. Courts have held that after a certain lapse of time a party is entitled to take the view that there will be no revival or initiation of financial claims. But in other cases, a court has exercised its discretion to entertain financial applications in cases where a long period of time has elapsed since dissolution of the marriage. A court can dip into assets accrued by one party post-separation if this is justified on the basis of one party’s financial needs.

To illustrate the point, I recently acted for a wife in a 25-year separation case. The parties married in 1964 and had two children. They separated after 20 years when the husband had an affair. The husband pursued a divorce so as to enable him to remarry but the parties’ financial arrangements remained unresolved for a further 25 years.

Anxious that at 64 she was near retirement and would need to down-size her property, in 2009 the wife sought legal advice. This was just as well. Given that the husband’s financial claims against her estate remained live, were she to have died in the interim she could have left her two sons to inherit a grim legacy of litigation with their estranged father. 

The value of the matrimonial home had increased in value passively by nearly £300,000 ($493,000). The wife had remained in the property (in joint names), letting rooms in the house to student lodgers so as to meet the monthly mortgage repayments. Meanwhile, the husband had fulfilled a lucrative company director role, dissipating his income and allowing his home to be repossessed. He had amassed arrears of spousal and child maintenance to the tune of circa £100,000.

Although the husband's conduct was reprehensible, the court is bound by the Matrimonial Causes Act 1973 to consider his financial needs when deciding what order to make. There was a risk that in balancing all of the circumstances, the court could find that the husband's needs were such that he was entitled to an interest in the house.

The case settled on the basis that the wife paid the husband a sizeable lump sum to secure a transfer of the house into her sole name. The vacuum that had occurred between separation and resolution of the finances had cost the wife dearly. From a legal and wealth management perspective, the importance of resolving the financial issues at the time of separation cannot be overstated.