Financial Order Divorce: Do I Need One When Divorcing?
March 21st 2024
We know that going through the divorce process is challenging, not just emotionally but also financially.
Learning that divorce and finances are separate legal procedures can add additional stress to your situation.
This comprehensive guide will walk you through everything you need to know about securing a Financial Order after divorce in the UK.
What is a Financial Order in divorce UK?
A financial order is a legal document issued by the court that sets out how your financial assets, such as property, savings, pensions, and capital, will be divided following a divorce. These orders can cover a wide range of issues, including the division of assets, child maintenance, and spousal support.
Do I need a Financial Order when divorcing?
Yes, in the UK, if you are getting a divorce or ending a civil partnership, it’s important to consider a financial order.
Without a financial order, any financial agreement you reach with your ex-partner is not legally enforceable.
It protects both parties from future financial claims.
Without it, your ex-partner could claim against your finances in the future, even years after the divorce, potentially impacting any new assets or wealth you have accumulated since the divorce.
It clearly outlines the financial arrangements, so both parties know what they are entitled to and responsible for. This helps to prevent future disputes and misunderstandings.
Ultimately, a financial order provides certainty and closure.
Divorce and finances are separate legal procedures. A financial order is not automatically granted upon divorce. Regardless of whether you have no assets to divide or significant wealth, the same law applies.
The court process begins with filing a claim in the family court. You’ll need to provide details of your finances, including bank accounts, investments, and any other relevant assets.
This step requires full disclosure, meaning you must share copies of financial documents and evidence of ownership or value. Paying the required court fee of £58 is also part of the initial filing.
Can I get a financial order after the decree absolute?
Yes, you can apply for a financial order after the decree absolute (final order) has been granted in the UK.
However, it is generally advisable to reach a financial settlement before the decree absolute is issued, as the finalisation of a divorce can have implications for certain rights, such as pension entitlements.
Despite this, there is no legal time limit for applying for a financial order after the decree absolute is granted.
Without a court-approved financial order, former spouses can potentially make financial claims against each other in the future, so it is important to have this legally binding agreement in place.
What Can be Included in a Financial Order?
Divorce asset division encompasses the allocation of various assets acquired during the marriage, including property, savings, investments, and pensions.
Identifying and valuing marital assets is a critical step in negotiating fair and equitable settlements that uphold the financial interests of both parties involved.
A financial consent order covers various aspects of asset division and financial arrangements. It can include:
1. Property Division
The agreement can outline how properties, including the marital home, will be divided between the parties. It may specify the sale of a property and the distribution of proceeds or the transfer of ownership to one party.
2. Pension Division
Pensions are significant assets that need to be considered when dividing the matrimonial pot. The order can specify how pensions will be divided, whether through a pension sharing arrangement or a lump sum payment.
3. Savings and Investments
You can also address the division of savings accounts, investments, and other financial assets. It ensures a fair allocation of these resources between the parties.
4. Debts and Liabilities
The order may include provisions for the division of debts and liabilities, such as loans or credit card debt. It outlines the responsibility of each party in managing and repaying these financial obligations.
5. Maintenance Payments
Financial support, such as spousal maintenance or child maintenance are often key elements of a divorce settlement. It establishes the terms and conditions for these payments, ensuring financial stability for both parties and any dependent children.
Types of Financial Court Orders
Different types of court orders can be obtained depending on the specific circumstances of the couple.
Here are the most common types of court orders:
| Types of Orders | |
|---|---|
| Financial Consent Order | If an agreement on asset divorce can be reached, it can be made into a Consent Order and submitted to the court for approval. This order is for couples with more complex financial settlements. |
| Property Adjustment | These orders redistribute property ownership between the parties. |
| Lump Sum Order | A lump sum order involves a one-time payment, usually to balance the division of assets. |
| Periodical Payments | These orders require one party to make regular payments to the other, typically for spousal maintenance. |
| Pension Sharing Order | They split pension assets between spouses or civil partners. |
| Clean Break Order | A clean break order is a specific type of court order that aims to sever financial ties between the parties completely. It is often sought by couples who have no ongoing financial obligations towards each other, meaning parties have financial independence. |
When Should I Apply For a Financial Order?
In most cases, it is recommended to apply for a financial order after the Conditional Order (previously ‘Decree Nisi’) has been granted.
This is because the conditional order sets out the terms of the divorce, including the date when the marriage will end. Once this has been established, it is easier to determine the financial arrangements that need to be made.
However, it’s important to note that a financial order cannot be made by a Judge until the final order (previously ‘decree absolute’) is granted.
Seeking legal advice is important to ensure the application is made at the appropriate time.
You can, of course, get a divorce without making your divorce settlement legally binding, however, there are dangers to doing that.
In summary, it is typically best to apply for a financial order after the conditional order has been granted but before the final order is made.
Delaying the application can in some cases have serious consequences.
Quick question
The role of prenuptial agreements in divorce
Prenuptial agreements, or prenups, are legal documents that couples can use to outline asset division and financial arrangements in the event of divorce.
While not legally binding in England and Wales, prenuptial agreements can provide valuable guidance and mitigate disputes during divorce proceedings.
Divorce without financial orders
While obtaining a financial order is recommended for ensuring legal clarity and protection, some couples may opt for divorce without a formal financial settlement. However, proceeding without a financial order leaves parties vulnerable to future claims and uncertainties regarding asset division and financial responsibilities.
We’ve agreed to share the house, etc, What would the implications of doing this without a financial order be? We don’t want to do a financial order as we agree on this so don’t see it as necessary.
Your formal agreements on the house, savings, pensions, maintenance, etc cannot be enforced by the family court if one spouse fails to comply with the agreement in the future.
How do I know what I’m entitled to?
One common question during divorce proceedings is, “What am I entitled to in a divorce?” Understanding your rights and entitlements regarding property, finances, and other assets is essential for advocating for your interests during negotiations and achieving a fair settlement.
It’s difficult to reach an agreement that is fair if you don’t understand your specific divorce entitlements to money, property, and maintenance for example.
What does the court take into account when it decides on a financial order?
Before we look at the individual factors a judge will consider when deciding on a financial order, it’s important to stress the importance of knowing your divorce entitlements.
In most cases, a short legal advice call with a family law solicitor can provide you with the assurances and knowledge you need to reach a fair financial agreement.
When making financial orders in divorce proceedings, the court considers a range of factors, including:
- the income,
- the earning capacity,
- the property,
- and other financial resources of both parties.
As well as the financial needs, obligations, and responsibilities of both parties. This includes any financial obligations to children, as well as any debts or other financial responsibilities.
The court will also consider:
- the age of each party,
- the duration of the marriage,
- and the contributions made by each party to the welfare of the family.
This includes both financial and non-financial contributions, such as caring for children or maintaining the family home.
Both parties are required to provide open and honest financial disclosure to ensure a Judge has the full picture of the marital assets before making a decision.
This is usually done by completing Form E – a detailed document the court will require to establish the facts of your situation.
Ultimately, the court will look at all aspects of life and use Form E as an assessment to ensure that a fair settlement is reached.
If you’re at an early stage of negotiations, it’s useful to look at typical UK divorce settlements for inspiration on how financial settlements can look as not everything is always 50/50.
Financial Order or Clean Break Order – What’s The Difference?
A clean break order is a specific type of financial order that brings all financial ties between the parties to an end.
Once a clean break settlement is made and implemented by the court, parties will have no financial ties and they’ll be protected from future financial claims.
A clean break order is often desirable as it provides certainty and finality for both parties. However, it is important to note that not all divorces will be suitable for a clean break.
For example, if one party is financially dependent on the other, a clean break order may not be appropriate as it could leave the dependent party in financial hardship.
In these cases, a financial order that includes provisions for ongoing spousal maintenance may be more appropriate.
Unlike a clean break where parties have financial independence, a financial consent order outlines what happens to the matrimonial assets and debts after divorce. It can also, in some cases, include assets that are acquired by one spouse before marriage, such as inherited property or businesses they own.
Find out which court order is suitable for your circumstances by comparing clean break orders vs financial orders.
How much does it cost to get a Financial Order?
Many couples don’t obtain a court order to end financial ties with their former spouse because they believe that legal costs are going to be thousands and ‘what’s the point if we have already agreed?’
Almost daily we have clients telling us “My ex won’t stop paying maintenance, we’re on good terms so there’s no reason for us to get the court involved”.
In reality, new partners often enter the picture and the once amicable relationship can turn less so fairly quickly.
Financial orders do not need to cost you thousands. We help couples save thousands in legal fees by offering a low-cost alternative.
Our online consent order service costs £499. It’s a fixed fee and covers both parties.
The cost of having a local solicitors firm prepare your financial order could range between £900 – £5,000 depending on the complexity of your agreement and where you live.
| Category | Cost |
|---|---|
| Fee for a Solicitor to draft a Financial Order | £499 – £3,000 |
| Fee for Financial Order Applications (by consent) | £58 |
| Fee for Financial Order Applications (other than by consent) | £275 |
How long does it take to get a Financial Order?
With our online consent order service, you can receive a professionally drafted financial order within 7 – 31 working days, depending on how urgent it is.
How long does it take for a court to approve a divorce court order? If your financial order is straightforward and the Judge believes it to be fair and reasonable, the court will typically approve the application within 2 to 4 weeks depending on their specific workload.
This is of course, for couples who can reach a negotiated divorce financial settlement. For those who cannot reach an agreement, court proceedings can take between 12-18 months.
If you apply for a financial order alongside your divorce (after the Conditional Order), the financial agreement becomes legally binding on both parties.
How to get a financial order after divorce
It’s essential to understand the process, seek legal advice, and consider mediation to reach an amicable financial settlement with your ex-spouse whenever possible.
By doing so, you can navigate the complexities of divorce with greater confidence and clarity regarding your financial well-being.
During the court proceedings, you might need to attend multiple hearings where you will present evidence and answer questions about your financial situation.
It’s essential to have all your documents, including copies of bank statements, property deeds, and investment portfolios, to provide a complete picture.
Having experienced solicitors or lawyers can significantly help navigate the complexities of financial orders. They can provide help with preparing your case, ensuring full disclosure, and representing your interests in court.
An initial appointment with a solicitor can offer valuable guidance on your legal position and the best way to proceed.
If you are ready to take the next steps and put your formal agreement into a legally binding court order for one low-cost fee, get in touch with our team by calling 01793 384 029 or viewing our online service below.
Solicitor Drafted Consent Order Agreement – £499
If you have a formal agreement in place with your ex-partner and wish to formalise it into a legally binding court order without spending thousands, our online services are ideal for you.