The Importance of a Financial Order in Your Divorce

When navigating the emotional and logistical challenges of divorce, it is easy to overlook the crucial step of securing a financial order. However, under the law of England and Wales, failing to obtain this legal agreement can have long-term financial and emotional consequences for both parties. A financial order is a court document that formalises the division of financial assets and obligations between divorcing spouses. Here, we delve into why it is essential to include this step in your divorce settlement process.

What Is a Financial Order?

A financial order is a legally binding agreement that resolves financial matters between you and your ex-spouse following a divorce. It can cover a wide range of financial issues, including:

• Division of property, such as the family home

• Splitting savings, pensions, and investments

• Determining spousal or child maintenance payments

• Handling debts and liabilities

• Arranging for a clean break, where neither party has future financial claims against the other

Without a financial order, your financial ties remain unresolved, leaving you vulnerable to future claims.

Why Is a Financial Order Necessary?

A decree absolute (the final legal document in a divorce) does not automatically sever financial ties between ex-spouses. This means either party could make financial claims against the other years after the divorce is finalised. A financial order protects you by:

• Providing Certainty: It ensures clarity regarding the division of assets and prevents future disputes.

• Preventing Future Claims: Without a clean break order, your ex-spouse could potentially claim a share of your assets even years later.

• Protecting Inheritances: A financial order can safeguard any future inheritance or windfall from being subject to claims by your ex-partner.

  
  

Types of Financial Orders

There are several types of financial orders, depending on your circumstances and needs:

• Consent Order: This is an agreement reached by both parties, approved by the court, and legally binding. It often includes a clean break clause.

• Financial Remedy Order: If parties cannot agree, the court decides how to divide assets fairly.

• Maintenance Orders: These address ongoing financial support, such as spousal or child maintenance payments.

The Risks of Not Having a Financial Order

Failure to secure a financial order can result in:

• Unresolved Financial Ties: Without a clean break, your ex-spouse can claim against your future earnings, property, or inheritance.

• Increased Costs: Disputes over financial matters years after the divorce can lead to costly legal battles.

• Emotional Stress: Lingering financial uncertainty can exacerbate the emotional toll of divorce.

How to Obtain a Financial Order

To obtain a financial order, you must:

1. Agree on Terms: Attempt to reach an amicable agreement with your ex-spouse through negotiation or mediation.

2. Apply to the Court: Submit a draft order to the court, alongside the necessary financial disclosure forms.

3. Seek Legal Advice: Engage a solicitor specialising in family law to ensure your rights are protected and the agreement is fair.

Conclusion

While it may seem like an additional step in an already challenging process, obtaining a financial order is essential for securing your financial future and achieving peace of mind. By formalising your financial settlement, you can avoid future disputes and move forward with confidence. If you are going through a divorce, consult with a professional to ensure that your financial interests are protected, and your settlement is legally binding.