Keep your divorce civil but formal

While it's tempting to sort out the details yourself, mistakes and oversights could prove very costly.

When it comes to divorce, keep things formal. This is the warning that has gone out in the wake of several big news stories recently. Getting a divorce and apportioning blame can be difficult, as seen in the case last week when a judge refused to grant a divorce because only the wife wanted one. But opting for an informal separation can make things far more difficult in the future.

Divorcing couples who fail to sort out their affairs when they separate are leaving themselves open to future legal challenges or having their estates dragged through the courts after death, warns Adam Williams in The Daily Telegraph. In one recent example a case reached the High Court concerning a couple who divorced in 1974, but who hadn't settled ownership of a property. Now, 40 years later, the husband has died and a bitter battle has broken out over who gets the house.

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When the husband died, his ex-wife inherited 100% of the property, as they had never formally split their ownership of it. A court then awarded his beneficiaries a 50% share, but they fought for more, citing the money he had spent on maintaining it over four decades. They lost that fight, but the ex-wife had to pay tens of thousands of pounds to fight her case.

In most situations it is advisable to sort out your affairs on a formal basis. Unfortunately, this tends not to be an easy or cheap process. Money matters take an average of 14.5 months to settle after a split, says the BBC's Kevin Peachey. So if you can, it is financially beneficial to keep things civil with your ex and sort out your finances between you. Fight it out and the divorce itself could end up costing you £30,000, according to the BBC.

Do-it-yourself divorces

It has recently become easier for divorcing couples to sort out their affairs themselves. Last year the Ministry of Justice started allowing couples to divorce online provided they both agree in a move aimed at saving the court system £250m a year. And earlier this year the Co-op launched a fixed-fee digital divorce service. For just £600 the service enables people to start uncontested divorce proceedings online, supported by telephone advice from solicitors. This could cut the amount of time it takes to complete an uncontested divorce from between six and nine months to between four and six months.

Couples need to make sure that their legal agreement covers all bases, however, including what will happen to joint property, bank accounts, savings and insurance policies. Things like pension sharing orders, child maintenance costs and spousal maintenance payments are often bones of contention long after a divorce has otherwise been settled, says Williams. Whatever route you take, be aware that you need to bring in solicitors to formalise your agreement. A "consent order", approved by a court, protects you from arguments in the future.

When it goes to court

If you can't come to an amicable arrangement, a judge can decide how your assets are divided. In this scenario, you need to be careful what you do after the split. It's important to maintain the financial agreements you had in place before you parted ways. So, for example, if the husband pays the mortgage, he should continue to do so, says Peachey. Keeping the same financial arrangements will make the court proceedings simpler. Don't be tempted to start hiding your assets either, as courts have wide-ranging powers to track down any hidden assets.

Finally, resist temptation to move in with a new partner before your finances have been settled. Cohabiting partners may have their finances considered when a divorce settlement is arranged by the court. If you aren't living together, they are ignored for the court's purposes.