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Financial Orders in Divorce: Understanding Your Options

Our People - Loretta Orsi-Barzanti
25 April, 2024

Divorce can involve complex financial considerations. Financial orders are legally binding agreements that determine how assets, property, finances, and ongoing financial obligations will be divided between divorcing or separating couples.

Even with the streamlined process of no-fault divorces, it’s crucial to address financial matters through a financial order to ensure a clear and fair division of assets and debts.

Financial orders can be established through mutual agreement, referred to as a financial consent order, or, in cases where agreement remains elusive and court proceedings become essential, the court will issue a financial final order upon the conclusion of those proceedings.

What is a Financial Consent Order?

A Financial Consent Order is a legal agreement between divorcing or separating couples that outlines how they will divide their finances and assets.  It covers things like splitting of property (house, car, etc.), division of financial accounts (savings, investments), and any ongoing financial obligations such as spousal maintenance or child support (if applicable).

Both parties must agree to the terms of the Financial Consent Order, and it needs to be approved by a court to become legally binding. This makes it a faster and less expensive option compared to going to trial.

What is a Final Order?

A Final Order is a court decision on financial and property matters in a divorce when a couple cannot reach an agreement on their own.  If you can’t agree on a Financial Consent Order, the court will hold hearings, consider evidence, and then issue a Final Order that dictates how your finances and assets will be split.  This order is legally binding on both parties.

Here’s a table summarising the key differences between a financial consent order and a final order:

FeatureFinancial Consent OrderFinal Order
Created ByDivorcing coupleCourt
Requires AgreementYesNo
Court Approval NeededYesYes
Faster and Less ExpensiveYesNo

7 Common Types of Financial Orders

Here are 7 common types of financial orders:

  • Lump Sum Order
  • Property Adjustment Order
  • Spousal Maintenance Order
  • Pension Sharing Order
  • Pension Attachment Order
  • Child Maintenance Order
  • Clean Break Order

Lump Sum Order

A Lump Sum Order is a one-time payment from one party to the other. This can be used to equalise the financial situation or compensate one party for contributions made during the marriage (e.g., stay-at-home parent). This can be agreed upon by both parties and included in a consent order. If no agreement is reached, the court can order a lump sum payment from one party to the other in a final order.

Property Adjustment Order

A Property Adjustment Order deals with transferring or selling property, dividing the proceeds. This could involve the family home, cars, or other property or assets. This can be settled through a consent order outlining how property is divided or sold. If there’s no agreement, the court will issue a final order specifying the property allocation.

Spousal Maintenance Order

A Spousal Maintenance Order sets out ongoing financial support from one party to the other after separation. This is typically awarded when there’s a significant disparity in income or one party needs financial assistance to adjust to life post-divorce. Both parties can agree on the amount and duration of spousal support in a consent order. If they disagree, the court will determine the terms in a final order.

Pension Sharing Order

A Pension Sharing Order divides pension assets between the parties. This ensures a fair distribution of retirement benefits accumulated during the marriage. These can be included in a consent order if both parties agree on how to divide pension assets. If not, the court can issue a pension sharing order in a final order.

Pension Attachment Order

A Pension Attachment Order earmarks a portion of one party’s pension for the other. The recipient receives a share of the pension benefits when they become payable. This can be an alternative to a pension sharing order, especially if one party is nearing retirement. These can be included in a consent order if both parties agree on how to divide pension assets. If not, the court can issue a pension attachment order in a final order.

Child Maintenance Order

A Child Maintenance Order determines any financial support for children from one parent to the other. This is calculated based on the child’s needs and the paying parent’s income. Parents can agree on child support arrangements in a consent order. If they can’t agree, the court will determine the amount and frequency of payments in a final order.

Clean Break Order

A Clean Break Order Aims to sever all financial ties between the parties, eliminating ongoing obligations. This is often used when both parties have a secure financial future and no desire for future claims on each other’s assets. This can be part of a consent order if both parties want to sever all financial ties. If there’s no agreement, a clean break order is unlikely in a final order, as the court might still award spousal support or child maintenance.

Can you apply for all multiple types of financial orders?

You can apply for multiple financial orders depending on your situation. However, some orders may overlap or conflict:

  • A clean break order might negate the need for spousal maintenance or pension orders, as it severs all financial ties.
  • A settled lump sum order might eliminate the need for further asset division through a property adjustment order.

What happens if I don’t have a financial order?

If you don’t have a financial order in place during a divorce or separation, it can leave both parties vulnerable to potential future financial disputes or claims. Without a formalised financial order, there is no legally binding agreement that outlines the division of assets, property, finances, or ongoing financial obligations. This lack of clarity can lead to uncertainties and potential conflicts down the line.

How long does it take to get a financial order in the UK?

The timeframe and cost for obtaining a financial order in the UK can vary depending on the complexity, level of agreement, and court workload.

How much does a financial order cost in the UK?

The cost of obtaining a financial order in the UK can vary significantly depending on the complexity of your case, the level of agreement between you and your former partner, and the chosen legal route. 

For instance, simpler cases with a high level of agreement typically involve less legal work and lower costs. Conversely, complex cases with significant assets, disagreements, or the need for court appearances will incur higher fees. It’s worth noting that many family law solicitors operate on an hourly rate basis and the experience of the solicitor will also influence the cost. Also, reaching a financial consent order through negotiation and mediation is generally faster and less expensive than going to court for a final order.

Due to these factors, it’s challenging to give a specific cost upfront. The best course of action is to consult with a family law solicitor as they can assess your situation, provide an estimated cost based on your specific circumstances, and explain the various fee structures. 

What is the process for drafting a financial order?

  1. Negotiation and Agreement: Reach an agreement with your former partner, potentially involving family lawyers, financial advisors, or mediation.
  2. Drafting a Consent Order: A divorce lawyer can help draft a legally binding document reflecting your agreement.
  3. Court Approval: The court reviews the order for fairness and reasonableness. This can take weeks or months.
  4. Order Issued: Once approved, the court issues the order, finalising the financial settlement.

Consulting a specialist family lawyer is crucial for navigating the process, understanding your options, and ensuring a fair outcome. They can also provide a more accurate time frame based on your specific circumstances.

In some cases, seeking a consent order alongside divorce proceedings can expedite the financial settlement process. By understanding the different types of financial orders and the process involved, you can make informed decisions about your financial future during divorce.

Contact a specialist divorce lawyer

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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