Divorce or Dissolution can be a difficult process both emotionally and financially. Navigating the financial element of your separation can present many challenges. Couples find themselves in financial limbo whilst assets such as property, savings, investments and pensions are put into a pot and divided. In this blog we consider what a Financial Order is, the types of Financial Order a Court can make upon Divorce or Dissolution of a Civil Partnership, and why it is so important for you to get a Financial Order.
What Is a Financial Order?
A Financial Order is a document which sets out how the financial assets of a marriage or civil partnership are to be divided between two parties. Either party can apply for a Financial Order at any time after the Decree Nisi/Conditional Order has been granted within Divorce or Dissolution proceedings.
It may be possible to decide how the assets of the marriage/civil partnership will be divided with your spouse directly, through mediation and/or solicitor led negotiations. If so, the agreement can be drawn up into a Financial (Consent) Order to reflect the settlement reached. If these options are not successful, then you may need to consider issuing proceedings to ask the Court to help you by making a Financial Order.
When a financial agreement is reached, it is important that the arrangements are drawn up into a Financial Order to reflect the settlement, and for this to be approved by a Judge in the Family Court.
Once the Court has approved the terms of a Financial Order, the arrangements set out in it are legally binding in England and Wales. This means it will be enforceable if either party breaches the agreement and will give you the financial protection you need and want to move forward after Divorce.
What Financial Orders Can a Court Make?
A Court has the power to make a variety of Financial Orders, including:
- Property Adjustment Orders: This may include the sale or transfer of the family home from joint names into the sole name of one party
- Payment of a lump sum.
- Transfer of other property, such as shares in a family business.
- Payment of spousal maintenance on a short term or long term basis.
- Distribution of Pensions, often by way of a Pension Sharing Order.
- Payment of costs connected with Financial Court proceedings.
The Court does however have limited powers to make orders for the financial support of children since the introduction of the Child Maintenance Service, which ordinarily deals with these types of matters.
Why Do I Need a Financial Order?
You may feel that you do not need a Financial Order for a number of reasons, such as:
- You reached a financial settlement directly with your spouse, or in family mediation.
- You previously signed a Separation Agreement.
- You entered into a Prenuptial Agreement before marriage.
- You have reached a financial settlement with your spouse and have already divided your assets.
- You have a good relationship with your spouse and do not see the need for a Financial Order.
- You do not have any assets.
- You plan to move overseas after your Divorce
Even in these situations, you still need a Financial Order to prevent your spouse from making any further financial claim against assets or income you may acquire in the future.
This scenario made headline news in 2016 when the former wife of Dale Vince, a self-made millionaire and founder of energy firm Ecotricity, was awarded a substantial financial settlement nearly 25 years after their divorce. The parties had not obtained a financial order at the time of their divorce and the court ruled there can be no strict limitation period on bringing a claim for a financial order. Our article from 2016 here and the news reports here provide further details of this case.
If the Decree Absolute/Final Order of Divorce has been granted without a Financial Order, this will not sever the financial claims you and your spouse have against each other. Securing a Financial Order is the only way to bring your respective financial claims to an end. A Financial Order therefore gives you peace of mind and financial security for the future.
Do I Need Legal Advice To Get A Financial Order?
The Court will only make a Financial Order that it considers to be fair and reasonable in all the circumstances. There are a number of factors in Law which are taken into account to determine what is fair and reasonable and any Financial Order will need to be drafted in a particular format with careful attention being given to make sure it accurately reflects the agreement reached.
We would strongly advise anyone seeking a divorce or dissolution to seek legal advice and to obtain a Financial Order. Our expert Family Lawyers are on hand to help guide you through this process to make sure the Financial Order you agree to is in your best interests and helps protect you and your family for the future. You can get in touch with us by contacting us at enquiries@ejcoombs.co.uk or by telephoning any of our offices. (click here for our contact page)
