Financial orders in divorce – the information you need to know

Atifha Aftab

Article written by Atifha Aftab, Family Solicitor

Going through a divorce or dissolution can be an emotionally challenging experience. The process can also take its toll financially and it’s easy to think that once a final order in relation to the divorce or dissolution is in place, a couple can go their separate ways with all financial ties automatically being severed.

However, this is not true. Getting divorced ends a marriage but in order to sever financial ties, parties must enter into a financial order.

A financial order is a legally binding document issued by the Court which outlines the financial arrangements between married couples or civil partners after a divorce or dissolution, specifying how assets, income and pensions should be divided. It is essential to have a financial order to provide legal protection and clarity regarding financial matters after a divorce or dissolution and to prevent either party from making financial claims against the other in the future. Without a financial order, an ex- spouse can make a claim as much as 20 years (or more) later should they find themselves in a position of financial need.

What are the different types of financial order?

There are three types of financial order:

  1. Consent order – this is the legal document that confirms parties agreement, detailing how assets will be divided. Parties agree the terms by consent, they are encompassed within a draft order and must be approved by the court.
  2. Clean break order – this type of financial order ends all financial ties between spouses post-divorce. A clean break order can be made by consent or following a contested application for a financial remedy order.
  3. Financial remedy order– this is a Court order that sets out the financial arrangements between spouses. It is made by the Court, following an application for contested financial remedy proceedings.

What tends to be included in a financial order?

  1. Property – the financial order outlines how properties, including the marital home, will be divided between the parties with a focus on the sale of a property, distribution of the proceeds or transfer of ownership.
  2. Savings and investments – the financial order can address the division of savings accounts, investments and any other assets.
  3. Debts and liabilities – the financial order can also make provisions for debts and liabilities including loans or credit card debts, detailing responsibilities for these financial obligations.
  4. Maintenance payments – the financial order establishes the terms and conditions for any spousal maintenance payments to ensure financial stability for both parties.
  5. Pensions – pensions are significant assets that need to be considered in the event of a divorce or dissolution. The financial order can specify how pensions will be divided – whether it’s a pension sharing arrangement or offsetting, which would offset the value of any pensions against other assets of the same or similar value.

If you are going through a divorce or dissolution, it is essential to understand the process. Experienced family lawyers can support you and work with you to reach a financial settlement with your spouse amicably and cost effectively. Initial consultations for up to one hour are currently available at a fixed rate of £100 plus VAT. To discuss financial settlements following a divorce or dissolution or for advice on a specific family law matter, please feel free to email me or contact the Grant Saw family team on 020 8858 6971.