Many people assume that once the final divorce order has been made, their financial ties to their former spouse are automatically ended.
Unfortunately, that is not the case.
A divorce legally ends the marriage, but it does not automatically dismiss financial claims between spouses. Without a financial order approved by the court, claims may remain open. This can include claims against income, property, savings, pensions, investments, businesses or even future assets.
This is why it is important to deal with the finances separately from the divorce itself.
A financial order is an order made by the court which records how finances are to be dealt with following divorce or dissolution of a civil partnership.
It can deal with issues such as:
If you and your former spouse have reached an agreement, the order is usually prepared as a consent order and sent to the court for approval.
A clean break order prevents future financial claims between former spouses, where appropriate. It can be particularly important where there are no ongoing maintenance arrangements.
Even if there are no assets to divide, a clean break order may still be sensible. Otherwise, financial claims may remain technically open.
An informal agreement is not the same as a binding court order.
You may have agreed who keeps the house, how savings are divided, or that neither of you will claim anything from the other. However, unless that agreement is approved by the court, it may not provide the protection you think it does.
This can create problems later if:
Before a financial agreement is approved, both parties should usually provide financial disclosure.
This allows each person to understand the other’s financial position before reaching an agreement.
Disclosure may include:
The court will want to know that the proposed order is fair in all the circumstances.
Yes. A financial order can still be made after the final order in the divorce. However, delaying can create practical difficulties, especially if assets have changed, documents are harder to obtain, or one person has already taken steps based on an informal agreement.
It is usually better to resolve finances before or around the time the divorce is finalised.
Recent commentary has highlighted that financial remedy applications remain significant, with many separating couples needing court assistance to resolve finances. The Law Commission has also concluded that the current law on financial remedies lacks certainty and accessibility and has presented possible models for reform.
That does not mean every case has to go to a contested final hearing. Many cases settle through negotiation, mediation, solicitor correspondence or at an early stage of court proceedings.
The key point is that the agreement should be properly documented and approved.
If you do not obtain a financial order, there may be uncertainty. In some cases, former spouses can bring financial claims years after the divorce.
This can be particularly worrying if one person later buys a property, receives inheritance, builds up a pension, sells a business, or experiences a significant change in income.
A properly drafted financial order can provide certainty and help both parties move forward.
At PCB Solicitors, we can advise you on financial arrangements following divorce or separation. We can help with consent orders, clean break orders, financial disclosure, negotiations and financial remedy proceedings.
Whether your finances are straightforward or more complex, early advice can help avoid uncertainty and reduce the risk of future disputes.
If you are divorced, divorcing, or separating and have not yet resolved the finances, contact our Family Law team today. You can contact us here, by email or by phone on 01743 598044.
