WHAT IS A FINANCIAL ORDER AND DO I NEED ONE?
Released On 5th Aug 2024
Starting divorce proceedings can be very unsettling for those involved. You may feel very anxious and concerned about ensuring that you will be financially stable and that you will no longer be financially tied to your spouse when the dust settles.
There is a common misconception within the divorce process that once your divorce has been legally dissolved, it will also automatically sever all financial ties with your spouse, leaving you with financial independence. Alternatively, if you personally divide your respective assets, then this is your formal financial division. Unfortunately, this is not the case. You will need to obtain an additional order known as a Financial Order that creates a clean break between you and your spouse to sever your financial ties. A clean break means that once an order has been approved by a judge, neither you nor your spouse can make any further claim against the other arising from your marriage. There can, however, be some instances where a clean break is not appropriate and the Court may consider that spousal maintenance should be paid.
You and your spouse may have a considerable disparity in the values of your pensions and a pension sharing order may be appropriate. Pensions, in most cases, are the most valuable asset in a marriage, yet this is the asset which is regularly overlooked. Similarly, it may be appropriate for the family home to be sold and for a lump sum to be paid to you and/or your spouse from the proceeds of sale of the property to allow for you both to move on with your respective lives.
A Financial Order is a legally binding Court document which outlines the financial agreement between you and your spouse. A Judge will not rubber stamp/approve any agreement as they have an obligation to ensure the agreement is fair in the circumstances.
If you and your spouse are able to reach a financial agreement between yourselves as to a settlement, the agreed terms can be drawn up into a Financial Consent Order. If the terms cannot be agreed directly between you and your spouse, you may wish to consider mediation or instructing a Solicitor to negotiate the terms for you.
If you and your spouse are still unable to reach an agreement as to the terms of a financial settlement, you will need to make an application to the Court for their intervention and assistance. Attending mediation will, however, be a prerequisite for issuing an application for a Financial Remedy Order to the Court.
An agreement between you and your spouse can still be reached whilst Court proceedings have been initiated but ultimately, if you are still unable to reach an agreement, the Court will determine the terms of your financial settlement at a Final Hearing.
The risk that any individual takes in not having a financial order is that a financial tie will remain live between you and your spouse/former spouse. This means a financial application can be made even after you have divorced. There are no time limits as to when an application can be pursued which means that your former spouse can make an application 10, 20 or even 30 years after your divorce. Unfortunately, this is a common occurrence and was evidenced in the 2016 case of Dale Vince, the founder of the wind-power firm Ecotricity (Tycoon’s ex-wife awarded £300k settlement 20 years after divorce – BBC News).
At AmicusLaw our Family Lawyers are equipped with the knowledge and years of expertise that allows them to assess your situation and provide clear, personal advice tailored to your specific needs. AmicusLaw offers an initial 1-hour consultation for a fee of £195+VAT (£234 inc VAT). If you seek legal advice surrounding this topic or would like to understand more, please contact us and a member of the Family Team will be in touch.
