It is often thought that financial commitments end along with the marriage on divorce and a financial claim comes as a nasty surprise.
In order to stop this from happening the parties should obtain a financial order. This ends the financial commitments in the same way that divorce ends the marriage and prevents either person from making a claim in the future.
A financial order sets out what happens to the assets, such as the family home, and liabilities or debts after the divorce.
A financial order can include such things as a transfer of property between the parties. One party might, for example, transfer their interest in the former matrimonial home to the other party in return for a lump sum of money. It might also include payments of maintenance in respect of the former spouse or any children for a period of time. Where one party has a large pension and the other a small pension then it might also involve transferring part of the pension fund.
If you are able to agree arrangements with your former partner then there are two possible orders that could be made. These are a clean break order and a consent order.
A clean break order is best suited to couples getting divorced who don’t have assets or liabilities that they wish to divide but who want to end their financial commitment to each other. A clean break order prevents either party making a claim against the other in the future. It has an additional benefit of preventing any challenge to a party’s will. Without a clean break order an ex-spouse could still challenge a will that’s made after the divorce claiming an entitlement some of the assets of the deceased’s estate.
A clean break order won’t be made if there are already ongoing financial commitments such as the payment of spousal maintenance. If maintenance was in payment then the court might decide to defer the making of a clean break order until the payment of maintenance had come to an end.
If a clean break order is not possible or there a significant amount of assets to divide then a consent order would be more appropriate. A consent order formalises an agreement between the parties as to how the matrimonial assets and liabilities should be divided. A consent order will list the couple’s assets and show how these will be divided. A Consent Order will record all (if any) obligations between the parties, to include ongoing maintenance, property and pension.
It will also prohibit either person from making a financial claim against the other in the future.
Any financial order must be fair. The court is unlikely to agree to make a financial order that leaves one party with all of the parties’ assets and the other party with nothing, for example.
If you can’t reach agreement then a financial remedy application may have to be made.
It may be important for your future well-being that you take professional advice before agreeing a clean break or consent orders and our highly experienced team of expert family lawyers are ready to help.