Do You Need a Financial Order in Divorce or Dissolution? | Kew Law

Do You Need a Financial Order in Divorce or Dissolution?

In England and Wales, divorce and dissolution is the legal ending of a marriage or civil partnership, respectively. The granting of a final order by the Family Court dissolves the marriage or civil partnership. However, a commonly asked question is whether a financial order is also needed as part of that process.

What is a Financial Order?

A financial order in divorce is an order made by the Family Court as part of the legal process. Such an order deals with the division of a divorcing couple’s finances, such as the former matrimonial home, pensions, maintenance, and other assets. As part of a divorce financial settlement, a clean break financial order is usually included (subject to the parties’ circumstances).

A financial order can be entered into by agreement between the parties or ordered by the Court at a final hearing if the proceedings are contested. Only the Court, whether by agreement or contested, can grant a clean break regarding the parties’ finances.

What Is a Clean Break?

A clean break order in divorce means, once ordered by the Court, that no further financial claims can arise between parties following a divorce or dissolution. It therefore also means that the parties’ financial connection to each other is severed.

Why Do I Need a Financial Order and a Clean Break?

If parties do not obtain a financial order with a clean break, the divorce itself does not end the financial links between them. Therefore, it is possible that you may obtain a final order of divorce or dissolution, thereby legally ending your marriage or civil partnership, but you may still have outstanding future financial claims. Only a financial order can bring this certainty.

A risk that can arise, as a result, is that a person can remarry following a divorce without having obtained a financial order regarding that same divorce. This is known as ‘the remarriage trap.’ If this happens, the remarried party will no longer be able to bring any financial claims against their former spouse; however, the former spouse still retains their right to bring a claim. This can cause worry and uncertainty about how the assets of the parties should be dealt with if they are not resolved at the time of the original divorce financial settlement.

What Should I Do?

It is usually advisable to obtain a financial order to prevent future problems and financial claims arising from a divorce. It is always best to speak to a family solicitor who can advise you on your specific circumstances and guide you through obtaining the right order for your case.

Frequently Asked Questions

Do I need a Financial Order if my divorce is uncontested?

Yes. Even if you and your spouse agree on how assets should be divided, a Financial Order is the only way to make the agreement legally binding and protect against future financial claims.

What happens if I do not get a Financial Order?

Without a Financial Order, financial claims between spouses/former spouses can remain open indefinitely, even after a Final Order (formerly Decree Absolute) has been granted.

What is a Clean Break Order?

A Clean Break Order legally ends the financial relationship between spouses, preventing either party from making future financial claims against the other, subject to the terms of the order.

Can we apply for a Financial Order if we have already agreed on finances?

Yes. If an agreement has been reached, a solicitor can help prepare a Consent Order for approval by the Family Court, making the agreement legally binding.

Does a divorce automatically include a Clean Break Order?

No. A divorce legally ends the marriage, but it does not automatically end financial obligations or potential claims. A separate Financial Order is required.

Examples

Example A: Amicable divorce with no court order

Hannah and Mark separate after 12 years of marriage and agree between themselves how to divide their savings and household belongings. They obtain a divorce but never formalise their financial agreement through the Court. Five years later, Mark receives a significant inheritance, and Hannah discovers she may still be able to bring a financial claim against him because there was no Financial Order or Clean Break in place.

Example B: Pension assets overlooked

Emma and Tom agree that each will keep the assets in their own name. They divorce without obtaining a Financial Order. Years later, Emma learns that Tom’s pension has significantly increased in value and seeks advice regarding a potential financial claim, creating unexpected legal uncertainty for both parties.

How can we help?

If you are considering divorce or dissolution, it is important to understand your options regarding a financial order and a clean break. Our family solicitors can provide tailored advice to protect your future. Contact Kew Law today on 0800 987 8156.