Article written by Mandeep Clair, Family Solicitor
A financial order sets out the financial arrangement for a divorcing couple or those dissolving a civil partnership. It is only valid if it has been drafted correctly and approved by the Family Court. The contents of the document will vary to reflect the individual financial circumstances of the couple and nature of the agreement. The financial order could provide for the family home to be sold and detail the share of the proceeds to which each party is entitled. It can also detail the payment of child maintenance or the transfer of shares in a family business.
Financial orders are very important, and we would suggest that all divorcing couples or those dissolving a civil partnership look to obtain one. Anyone who gets divorced or dissolves their civil partnership is potentially entitled to make financial claims against their ex-spouse/ex-partner and these claims can effectively live forever, even against the other’s estate upon death. A simple consent order that is drafted by a solicitor and approved by the Court can ensure that settlement terms are legally binding and full and final, and do not cause problems in the future.
A financial order that is entered into at the time of the divorce or dissolution is the best legal protection from unexpected and/or unfounded financial claims in the future and therefore certainly a worthwhile investment. If, say, a divorcee/ex-civil partner agrees to purchase the other spouse’s/partner’s share of a property, even after ownership has been transferred, without a financial order, the couple’s claims against one another do not come to an end. A financial order that records the transfer of the property, correctly drafted, would terminate financial claims, and ensure the couple receive a “clean break” as appropriate. A clean break refers to a financial settlement upon divorce/dissolution where neither party has an ongoing financial obligation to the other.
If the terms of the financial settlement can be agreed by the parties, there is no need for messy contested Court proceedings to determine settlement terms. It should then be straightforward, provided that the Court documentation has been properly drafted, to obtain what is known as a consent order from the Court. This can be an online process where a solicitor is acting. A financial order can also protection should one party later become bankrupt.