Do I Need a Financial Order After Divorce? Your Most Common Questions Answered

You have applied for your divorce, dealt with the paperwork, and perhaps even received your Final Order. So, that means everything is finished between you and your ex financially too… right?

Not necessarily.

One of the most common misconceptions we come across is that getting divorced automatically ends the financial relationship between you and your former spouse.

It doesn't.

Your divorce legally ends your marriage. It does not automatically dismiss the financial claims that you and your ex may have against one another.

This is where a financial order comes in.

So, do you actually need a financial order after divorce? What if you have already agreed how to divide everything? What if there are no assets to divide? And can your ex really make a financial claim years after your divorce?

Here are the answers to some of the questions we are asked most often.

What is a financial order in divorce?

A financial order is an order made by the Family Court dealing with the financial arrangements between you and your former spouse.

Depending upon your circumstances, a financial order can deal with things such as:

• The family home and other property;
• Savings and investments;
• Pensions;
• Lump sum payments;
• Spousal maintenance; and
• The dismissal of future financial claims.

The important point is that your divorce and your finances are two separate legal processes.

Receiving your Final Order in the divorce does not, by itself, prevent either of you from bringing financial claims against the other in the future.

Do I need a financial order if we have already agreed everything?

In most cases, yes, it is sensible to have your agreement made legally binding.

You and your ex may have separated amicably. You may have sold the house, divided your savings and agreed who keeps what. You may both be perfectly happy with the arrangement.

The problem is that an informal agreement between you does not necessarily provide the same protection as a court order.

Where an agreement has been reached, a solicitor can prepare a financial consent order setting out the terms you have agreed. This is then submitted to the Family Court for approval.

You do not ordinarily need to attend court simply because you want the agreement made legally binding.

Once approved, the consent order gives both parties much greater certainty about their financial position going forward.

What is a clean break order?

You may have heard people talking about getting a clean break after divorce.

A clean break means that financial claims between former spouses are dismissed so that, so far as possible, neither can return in the future and seek further financial provision from the other.

A clean break can therefore provide valuable certainty.

For example, imagine that you divorce today and, several years later, your financial circumstances look completely different. You might have built up significant savings, grown a successful business, received an inheritance or simply be earning considerably more than you were during the marriage.

Without an appropriate financial order dismissing future claims, you may not have achieved the financial finality you thought you had.

Whether an immediate clean break is appropriate depends on your individual circumstances. In some cases, particularly where ongoing spousal maintenance is required, an immediate clean break may not be possible.

Do I need a clean break order if we have no assets?

This is a question we hear all the time.

"We don't own a house, and there's nothing to split, so surely we don't need a financial order?"

It's still worth considering one.

The fact that there is little or nothing to divide now does not necessarily mean that financial claims between you have automatically disappeared.

Your financial circumstances can change significantly over time.

You might buy a property, build up savings, increase your pension or earn substantially more in the future.

A clean break order can formally dismiss the relevant financial claims between you and give you certainty moving forward.

Does divorce automatically give me a clean break?

No.

This is perhaps the most important takeaway from this article.

A Final Order legally ends your marriage.

It does not automatically provide a financial clean break.

We regularly speak to people who divorced years ago and believed that because the divorce was final, their financial relationship with their former spouse had ended too.

The divorce itself and the resolution of matrimonial finances are separate issues.

Can my ex make a financial claim after we are divorced?

Potentially, yes.

Simply obtaining a divorce does not necessarily end all financial claims.

This is one reason obtaining an appropriate financial order can be so important. It provides clarity about what has been agreed or ordered and, where appropriate, dismisses future claims.

If you divorced some time ago but never obtained a financial order, it is worth taking legal advice about your position rather than assuming that everything was dealt with when the divorce was finalised.

Can my ex claim my pension after divorce?

Pensions are often overlooked when couples separate, particularly where one person has a much larger pension than the other.

However, pensions can be an important matrimonial asset and may be taken into account when resolving finances following divorce.

A pension can sometimes be dealt with through a Pension Sharing Order, which provides for a percentage of one person's pension to be transferred into a pension in the other person's name.

Whether a pension should be shared — and by how much — depends upon the circumstances of the individual case.

It is therefore important not to agree a financial settlement simply by looking at the money you can see in your bank accounts or the equity in the family home.

Can we write our agreement down ourselves?

You can reach an agreement between yourselves, and many separating couples do.

However, simply writing down what you have agreed does not automatically turn that agreement into a court order or necessarily dismiss future financial claims.

If you have already reached an agreement, getting legal advice does not mean that you suddenly have to start arguing about it.

Quite the opposite.

A solicitor can advise you on whether the agreement appears appropriate, prepare the necessary documentation and help you obtain a court-approved financial consent order.

Do we have to go to court to get a financial order?

Not necessarily.

If you have reached an agreement, the financial order can usually be dealt with by consent and submitted to the Family Court for approval.

A judge will consider the proposed order alongside information about your respective financial circumstances.

If the judge considers the agreement fair and appropriate, the order can usually be approved without either of you attending a hearing.

Court proceedings are generally required where an agreement cannot be reached, and one party asks the court to determine how the finances should be divided.

When should I deal with finances during a divorce?

Ideally, you should think about your financial arrangements before your divorce is completely finalised.

There can be important legal and practical reasons to consider the timing of the Final Order alongside the financial settlement, particularly where pensions, property, or other significant assets are involved.

Every case is different, so it is sensible to take advice about your finances before simply progressing the divorce to its conclusion.

What if we cannot agree on the finances?

If you cannot reach an agreement directly, that does not automatically mean you will end up having a contested final hearing.

There are several ways of trying to resolve matrimonial finances, including:

• Negotiations between solicitors;
• Mediation;
• Private Financial Dispute Resolution hearings; and
• Court proceedings where necessary.

The right approach will depend upon the issues in your case, the assets involved and whether both parties are willing to negotiate.

Before settling, both parties will also usually need to provide full and frank financial disclosure so that everyone understands the true financial position.

How much does a financial order cost?

The cost will depend significantly upon whether you and your former spouse are already in agreement.

If you have agreed the division of your finances and need that agreement formalised into a consent order, the process is generally much simpler than contested financial remedy proceedings.

Where there is disagreement over property, pensions, maintenance or other assets, further negotiations or court proceedings may be necessary.

Speaking to a family law solicitor at an early stage can help you understand your options and, importantly, whether there is a realistic opportunity to resolve matters without lengthy proceedings.

I am already divorced but don't have a financial order – is it too late?

Not necessarily.

If your divorce has already been finalised but you never dealt formally with your finances, you should not panic — but you should consider obtaining legal advice.

We regularly advise clients whose divorces were finalised months or even years ago but who never obtained a financial order.

What can be done depends on your particular circumstances, including what happened financially when you separated and whether either of you has remarried.

So, do I need a financial order after divorce?

For many separating couples, obtaining an appropriate financial order is an extremely important part of achieving financial certainty after divorce.

Even if you and your former spouse have agreed everything amicably, it is worth considering whether that agreement should be formally recorded in a court order.

And even if you currently have very few assets, you should not simply assume that your Final Order has ended all financial ties between you.

Divorce ends the marriage. A financial order deals with the money.

They are not the same thing.

Need Advice About a Financial Order After Divorce?

At Harrington Family Law, we regularly advise clients on divorce and financial settlements, from straightforward clean break consent orders to more complex cases involving property, pensions, businesses and ongoing maintenance.

Whether you are currently going through a divorce, have already agreed a financial settlement, or were divorced some time ago without formally dealing with your finances, we can advise you on where you stand and the options available to you.

Getting advice early can help you understand what you are entitled to, protect your financial position and, where possible, achieve a clean financial break so that you can move forward with certainty.

Contact Harrington Family Law today to speak to one of our family law solicitors about divorce, financial consent orders and financial settlements.