For the first time in a generation, the rules governing how money is divided on divorce in England and Wales are about to be examined seriously by the Government. A wide-ranging consultation on financial remedies and cohabitation reform is expected to launch this spring, following the Law Commission’s 2024 conclusion that the law has become unpredictable, confusing, and overdue for change.
For anyone going through separation now, or thinking about it, this raises an awkward question. If the legal framework is about to be rewritten, should you make decisions now, wait, or do something in between?
There is no clean answer. But there are some useful things to understand before deciding.
What is the reform actually about?
The current framework stems from the Matrimonial Causes Act 1973, which is more than five decades old. It gives judges very broad discretion to decide what is fair, which has produced flexibility but also unpredictability. The Law Commission spent two years examining whether that discretion consistently produces fair outcomes, or whether it pushes too many cases towards dispute.
Its conclusion: the law needs reform. The Commission set out four possible models, ranging from tidying up the existing principles to a more radical move towards default rules on how assets should be split.
The Government has now confirmed that a consultation will go out in Spring 2026, looking not just at divorce but also at cohabitation. That broader scope is significant. It means the reform will not just affect married couples, but the rapidly growing number of cohabiting couples who currently have very few rights when they separate.
What are the courts already doing?
While the political process moves slowly, the courts have been busy. The Supreme Court’s July 2025 decision in Standish v Standish was its first ruling in nearly two decades on how non-matrimonial property is treated upon the end of a marriage.
The headline: assets that one spouse brought into the marriage, or received by gift or inheritance, do not automatically become joint property just because they were transferred between spouses for tax planning or other practical reasons. What matters is how the couple actually treated those assets over time. If they were treated as shared, they are likely to be shared. If they were kept separate or used for a specific non-shared purpose, they may stay non-matrimonial.
For separating couples, the practical effect is real. It changes the calculations around what is on the table, particularly where one party brought significant wealth into the marriage or received an inheritance during it.
What does this mean for a separation agreement?
A separation agreement is a written record of what a couple has agreed to when they separate, covering money, property, and arrangements for children. It is a contract, not a court order. Courts will take a well-drafted, freely entered separation agreement seriously, but they retain the power to look behind it where circumstances have changed, or disclosure was incomplete.
In a period of legal flux, a separation agreement remains useful, particularly for couples who want clarity now without rushing into divorce proceedings. But its limits are worth understanding. Whatever the current law looks like when you sign one, the assumptions behind it may shift if reform changes the underlying framework. That does not undo a separation agreement, but it can affect how a future court interprets it.
For couples not yet ready to divorce, the practical question becomes whether to record provisional arrangements in a separation agreement now, knowing the legal context may evolve, or to leave things informal and revisit later. Most family lawyers will favour putting something in writing. Informal arrangements tend to become contested ones.
What about a financial order?
A financial order in divorce is a different kind of document. The family court issues it during or after divorce proceedings, turning an agreement into a legally binding and final document. The most common type, a consent order, is signed off on by a judge once they are satisfied the terms are fair.
This is the document that draws a line under the financial relationship. Without one, an ex-spouse can, in principle, still make a claim on assets you build up after the marriage ends, sometimes many years later. The Wyatt v Vince case famously allowed a financial claim to be brought nearly two decades after divorce because no financial order had ever been made.
Reform may eventually change how financial orders are drafted and what defaults apply. It will not change the fundamental point that having one provides certainty, and not having one leaves the door open.
Should you wait for the new rules?
For most people, no. The consultation will take time. Any resulting legislation will take longer. And the law, as it stands today, applies to your situation.
Where the current moment does matter is in the choices around timing and structure. If you are weighing whether to sign a separation agreement now or move directly to a financial order, the answer depends on your circumstances. If significant non-matrimonial assets are involved, the Standish judgment is highly relevant. If you are cohabiting rather than married, the upcoming consultation may provide you with legal protections you do not currently have.
What sensible legal advice can do, in a period like this, is help you separate the things that are settled (the structure of separation agreements and financial orders, the principles set out in Standish) from the things that may change (defaults, presumptions, what gets shared automatically). Decisions made about settled matters are very rarely undone by future reform.
Anyone unsure where they stand can book a free, no-obligation 30-minute consultation with Holland Family Law to talk through how the current rules apply to their circumstances.
The takeaway is unglamorous. Get advice that reflects the law as it is. Put what you have agreed in writing. And if you are divorcing, do not skip the financial order, regardless of the political weather.