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Why do you need a financial order in your divorce?

Our People - Loretta Orsi-Barzanti
11 March, 2024

Divorce is a challenging journey, and untangling finances can add significant stress. A financial order acts as a roadmap, guiding you through the division of assets, debts, and ongoing financial obligations. While emotions naturally run high during this time, a financial order offers a crucial step towards achieving clarity, security, and a clean break.

What is the difference between a financial order and a financial consent order?

A financial order is the umbrella term for the final outcome regarding finances in a divorce, while a financial consent order is a specific type of financial order achieved through mutual agreement and requires court approval to become legally binding.

In essence, both financial orders and financial consent orders deal with dividing finances during a divorce or separation, but the key difference in how they come about.

What is a financial order?

This is a broader term encompassing both negotiated agreements and court-ordered decisions.

A financial order can be the result of a consent order, where you and your ex-partner reach an agreement on how to divide assets, debts, and ongoing financial obligations. It can also be a final order issued by the court if you can’t agree and require a judge to determine the financial settlement.

What is a financial consent order?

This is a specific type of financial order where you and your ex-partner reach a mutual agreement on the financial aspects of the divorce.

Here’s a table summarising the key differences:

FeatureFinancial OrderFinancial Consent Order (Financial Remedy Order)
How it’s reachedAgreement or court decisionMutual agreement between spouses
Legal StatusLegally bindingLegally binding after court approval
ExampleCourt decides who keeps the houseSpouses agree to sell the house and split the proceeds

Should you include a clean break clause in your financial order?

If you and your ex-partner are aiming for a clean financial break and want to minimise the chances of revisiting financial matters in the future, including a clean break clause in your financial order is recommended. This clause severs most future financial ties, preventing claims on each other’s income or future assets (except pre-existing obligations like child support). This can provide significant security and peace of mind, allowing you both to move forward with greater financial certainty.

5 key benefits of a financial order:

  • Provides clarity and certainty
  • Is a legally binding agreement
  • Acts as a final resolution
  • Allows for financial planning and stability
  • Prevents any future claims (with clean break clause)

Provides Clarity and Certainty

A financial order clearly outlines the division of assets (house, cars, investments), property (marital home), and ongoing financial responsibilities (spousal support, child support). This detailed breakdown reduces uncertainty and prevents future disputes. Imagine avoiding disagreements about who keeps the lake cabin or who inherits responsibility for the joint credit card debt.

Is a Legally Binding Agreement

Financial orders can be reached through mutual agreement (Consent Order) or determined by court (Final Order).  Both options are legally binding, ensuring both parties uphold the terms. This provides peace of mind, knowing you have a legally enforceable agreement you can rely on.

Acts as a Final Resolution

A financial order acts as a final and conclusive resolution to the current financial aspects of divorce. This finality allows you to move forward with your life with greater clarity and reduced likelihood of revisiting financial disputes. However, in some cases (without a clean break clause), significant changes in circumstances or assets acquired after the divorce might necessitate revisiting the agreement.

Allows for Financial Planning and Stability

With a clear picture of your post-divorce finances, you can make informed decisions and create a financial plan for the future. This empowers you to budget effectively and work towards greater financial stability.  Financial orders with a clean break clause might offer additional security for long-term financial planning by eliminating the possibility of most future financial claims.

Prevents Any Future Claims (with Clean Break Clause)

A financial order with a clean break clause acts as a legal barrier against most future claims on each other’s income or assets acquired after the divorce. This offers significant security and stability, allowing you to plan for the future with greater confidence. (Exceptions might include existing child support obligations.)

It is important to note that there are still occasions where a person can bring the case back to court to vary the terms of a financial order even if there is a clean break clause.

Do we need a financial consent order if we have no financial assets?

The best advice would be yes, as a financial consent order acts as a legal closure on any potential financial claims between you and your ex-partner.  This means even if you inherit money, win the lottery, or experience a significant increase in income in the future, your ex-partner wouldn’t be able to make a claim on those assets.

A financial order is an essential component of a healthy divorce process.  It provides a framework for a fair and final resolution to the financial aspects of your separation.  By promoting clarity, certainty, and enforceability, a financial order allows you to move forward with peace of mind and focus on building a secure future.

Is court approval guaranteed for our financial consent order?

The court is likely to approve your financial consent order if it meets several key criteria. First, the agreement itself must be fair and reasonable, taking into account factors like income, any assets (no matter how small), the needs of children (if applicable), and the length of the marriage.

Additionally, both parties must have provided full and accurate financial disclosure. This transparency allows the court to assess the agreement’s fairness for both individuals.

Finally, independent legal advice for each party is crucial. This ensures everyone involved understands the terms and potential consequences of the financial consent order, and eliminates any concerns about pressure or coercion during the negotiation process.

How much does a financial order cost?

At GN Law, obtaining a financial order typically involves our solicitor fees based on an hourly rate. This allows for flexibility in handling the complexities of your situation. Fixed fees for financial orders, with or without a clean break clause, are uncommon  because most cases require some level of tailoring.

Every divorce is unique, and the complexity of your financial situation and agreements will influence the time and effort required from your divorce solicitor. Unforeseen issues can arise during negotiations, and an hourly rate ensures you’re only charged for the work done to address them.

When might a fixed fee financial order be possible?

While uncommon, very straightforward cases with minimal assets and full agreement between spouses might be eligible for a fixed fee. However, consulting with a divorce lawyer is crucial to determine if your situation qualifies for a fixed fee option.

How long does it take to get a financial order approved?

Getting your financial order approved can take anywhere from a few weeks to over a year. If you and your ex-partner reach an amicable agreement and submit an uncontested order (consent order), court approval is typically quick, within 2-4 weeks. However, disagreements requiring court involvement can significantly extend the wait time, ranging from several months to a year or more in complex cases, depending on court workload and case specifics.

How can we speed up the process?

To expedite the process, open communication with your ex-partner and seeking guidance from a divorce solicitor specialising in family law are key. Family mediation can also be a faster alternative to reach a settlement outside of court.

If you need any help or advice on obtaining a financial order in your divorce or on any matter relating to divorce proceedings, please feel free to contact our specialist Divorce Lawyers or call us on 020 8492 2290.

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