Don't let a 'silent divorce' wreck your finances: These are the risks for people who split up... but don't legally end their marriage

Married couples who split up but avoid the decisive step of divorce are taking serious legal and financial risks, warn lawyers.A 'silent divorce' is where couples stay legally married after their relationship has ended both emotionally and when it comes to their money, according to Jayne Martins, partner in the family law team at RWK Goodman.Typical reasons to do this – and sometimes to continue to live together – are the prohibitive cost of running two households, wanting to maintain stability for children, or not seeing any good enough cause to formalise a separation, she explains.'A 'silent divorce' can work perfectly well for some couples and there may be very good reasons for choosing not to divorce immediately,' says Martins. 'Remaining married may seem like the simplest option, particularly where a couple is amicable, but circumstances can change significantly over time.'Martins says she and her colleagues are increasingly receiving enquiries from people who have been separated for some time, and have discovered remaining legally married is creating unexpected problems. Silent divorce: You can break up emotionally and financially, but never formalise the splitDavid Milburn, partner in the family law team at Tanners Solicitors, says: 'In my experience, couples drift into this rather than choose it.'The relationship ends, the practical arrangements get sorted out between them, and formalising the divorce slips down the list.'Cost is a factor, so is not wanting to reopen a painful conversation, and some people stay married for religious reasons or because of the children. The risk is that nothing is actually settled.'Jenniffer Brunt, head of family law at Slater and Gordon also says a so-called 'silent divorce' can leave both parties exposed to significant legal and financial risks.'For some couples, simply separating and carrying on with their lives can feel like the easiest and least confrontational option,' she says. 'But an informal separation does not necessarily provide the financial certainty or finality that people may assume it does.' Jayne Martins: Splitting up but remaining legally married can create unexpected problemsWhat are the risks of separating without getting a divorce?Future claims: One important pitfall is that your former partner could still make a claim against an inheritance or future wealth, explains Martins.'If you inherit money, receive a substantial bonus or build up savings during a 'silent divorce', these assets could potentially be taken into account if you divorce years later.'Milburn says that until a court makes a financial order, each spouse retains the right to bring a claim against the other, and that right does not expire.'It can reach assets that are built up long after you went your separate ways. 'Without a divorce, you remain legally connected to each other, and that should be avoided, if at all possible.'Inheritance: You could come into an inheritance after separating but before getting a divorce, or your estranged spouse could inherit your estate if you die, points out Martins.'If you remain married and die without a will, your estranged spouse could inherit some or all of your estate, even if you have been separated for years.'If you are not yet divorced, she suggests reviewing your will and who you have nominated to receive each of your pensions.Pensions: Retirement funds are often among the most valuable joint assets, second only to the family home.Therefore, failing to split them fairly when a marriage ends can leave one spouse worse off in retirement.'If one spouse has spent years raising children while the other built up a substantial pension, remaining married means the financially weaker spouse cannot obtain a pension sharing order,' says Martins.'Furthermore, if you separated a long time ago and continued to contribute into your pension, your spouse could be entitled to share the pension that accrued after the separation. This may not be what was intended at the time of separation.'She says you should obtain pension valuations and consider your future retirement needs – and bear in mind that a post-nuptial agreement will not cover pensions.Milburn warns: 'People separate and never change their death benefit nomination, so an ex-partner they have not spoken to in years is still in line to receive it.'From April 2027, unused pension funds will also be included in the estate for inheritance tax purposes, so the cost of leaving them unchecked is increasing.'As well as assessing private pensions, both spouses should also get state pension forecasts. Read This is Money guides to pensions and inheritance tax, and how to split pensions fairly in a divorce.The family home: 'Couples sometimes retain joint ownership of the family home after separating,' says Martins. 'Problems can arise if one person wants to sell, stops contributing to the mortgage or wishes to buy another property.'She advises making an agreement over who pays the mortgage and other expenses, and what happens if either person wants to sell.'Record these arrangements in a formal agreement or resolve ownership through a financial settlement on divorce. There could also be tax implications of remaining a joint owner whilst not living at the same property. Tax advice would be important.'Read a This is Money guide to finding a good accountant, and what our tax columnist Heather Rogers has to say about divorce and capital gains tax, including important rules introduced in April 2023.Should you get a postnup?A post-nuptial or separation agreement can record how you intend assets acquired after separating from your spouse to be treated, says Martins.'Although not automatically legally binding, courts may give such agreements considerable weight if you later decide to divorce.'However, she warns they do not provide the same certainty as a final financial order made on divorce and cannot resolve every issue.'Pension sharing orders, which allow pension assets to be divided between spouses, are only available as part of divorce proceedings,' Martins says. 'If you are going to need a share of your spouse's pension, a post-nuptial agreement can record your intentions, but pension sharing requires divorce and a court order. I would advise the latter.' Jenniffer Brunt of Slater and Gordon, pictured left, and David Milburn of Tanners Solicitors, right, say a 'silent divorce' involves legal and financial risksStay separated or get a divorce: How to decideThere is a very important legal distinction between being separated and being divorced, says Martins.'If someone intends to remain separated but married for the foreseeable future, it is worth taking advice about their financial arrangements, pensions, will and estate planning so that, as far as possible, their legal position reflects what they actually intend.'The important thing is that people understand the potential consequences rather than assuming separation gives them the same legal certainty as divorce.'David Milburn of Tanners Solicitors says: 'Take advice early, then update your will and nominations, and either put a separation agreement in place or finalise the divorce properly. Only the last of those gives both of you certainty.'Jenniffer Brunt of Slater and Gordon says informal arrangements between former partners may not provide the same protection as a legally binding agreement.Meanwhile, leaving matters unresolved could ultimately create greater uncertainty and make future disputes more complicated and costly.'This can become particularly problematic years later if one person's financial circumstances change, they acquire significant assets or either party begins a new relationship.'Taking legal advice at the point of separation can help couples understand their position and decide what formal arrangements, if any, are appropriate for them.' Protect Your Money - sign-up to our six-week plan If you want the retirement you hope to enjoy then understanding pensions, investing and saving is essential.In our new six-week Protect Your Money plan, Simon Lambert explains everything you need to know, from Isas to pensions and tax. 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