When divorcing, there are two paths to go down. The first path is to issue the divorce petition which will end the relationship between both parties. The second path is the financial order, this will end the financial ties between the parties. The financial order is often made ‘by consent’ and therefore known as a consent order.

The importance of a financial order in divorce is often not known by parties, and therefore some parties fail to do this part, often just divorcing and ending their marriage, rather than ending the financial ties between them.

What is a financial order?

A financial order sets out the agreement between parties about what will happen with matrimonial assets (i.e assets of the marriage).

How does it work?

A financial order is legally binding and therefore can be called upon if either party fails to carry out their obligations as a part of the order. Once the agreement is sealed (approved) by the court, it is very difficult to change and neither party can make a claim against the other. If one party was to breach the order, then the other party could take them back to court for enforcement.

When should I apply for a financial order?

The ideal time to apply for a financial order is during the divorce process. Once you have received the conditional order within the divorce petition, you can then submit the consent order to the court. The ideal starting point to initiate a conversation about finances is at the very beginning of the divorce process. Ideally, within the first 20 week holding period as mandated by the court.

How can I initiate conversation about a financial order?

You can enter negotiations directly with the other party or alternatively, you can go to mediation. Naturally, divorce is an emotive event and therefore it may be easier to go through solicitors who can negotiate on your behalf to come to an agreement.

What is put into a financial order?

The best financial orders consist of assets within the marriage and how they are to be dealt with, an example of this would be that the matrimonial home be put on the market and sold, therefore creating what is known as ‘an order for sale’. It will then deal with once the property has sold, where the net proceeds will go. The net proceeds are what is left after the mortgage (if there is one) has been paid off, the conveyancers fees, the estate agency fees and any other applicable fees. Once these have all been settled, the order will state ow the remaining funds are to be divided, such as : “the net proceeds to be divided as to 50% to the applicant and 50% to the respondent” in this scenario, the applicant and respondent will both come away with 50% of the properties net proceeds. The court does not always divide the net proceeds equally and will take into consideration all assets of the marriage, not just property, before coming to a decision.

What is the starting point to leaving a marriage?

The starting point of leaving a marriage financially, is always equality. The only deviation from this is if one party will be at a serious detriment by having to leave the marriage. For example if one party had no borrowing capacity and a low paid job with children to care for, which meant they were unable to increase their salary and in turn increase their borrowing capacity. This party would have to argue that it is in their best interest that the court allow a deviation from equality and it would be down to their solicitor to negotiate this with the other party’s solicitor.

Equality will always be the starting point, and this is across the board of all assets within the marriage. For example, where fair the court would like to see both parties come out of the marriage with an equal amount of money, savings, assets, investments and pensions.

Can you make a financial order after a final order of divorce (formally known as decree absolute) ?

Yes you can make a financial order after this time. The courts prefer you to do so within the time frame, as this is the best way to protect yourself for the future. However, it is never too late and can be applied for to stop either party having a claim on the other party.

What is meant by ‘a claim on the other party’?

If a couple divorced in 2020 and did not make a financial order at the time then either party could make a claim on the other party even though the marriage had ended. Imagine the wife won the lottery and the husband found out about this, and decided well, I want some of her wealth! He would be well within his right to make a claim on this amount, as they never agreed a financial order, this is why it is important to make a financial order as soon as possible.

What would a financial order stop from happening?

A financial order would cancel out either parties ability to make a claim against the other party at all in the future. This would include if they were to come into any money of any sort, whether it be by winnings, redundancy, inheritance or otherwise. This also includes making a claim on their estate if they were to pass away.

What is the Remarriage trap?

In your divorce application, the applicant can apply to open a financial claim by confirming that they wish to apply for a financial order. However, the court do not act at this stage and to formally start proceedings the applicant would need to complete a separate application for a financial order. If the applicant does not open a financial claim in their initial application, they can still make an application for a financial order, but this right will only exist to the point that they remarry or form another civil partnership.

Once the divorce or dissolution application is issued, the respondent can formally apply for a financial order but again, this is only until they remarry or form another civil partnership.

If you were to remarry before resolving financial matters, it is possible that you will be prevented from applying for a financial order through the court. If no application has been made and you remarry then you will be barred from making an application to the court for a financial provision order.

You would not be able to apply to the court for periodical payments, a lump sum order or an order in relation to property.

It is important to note that any claims for spousal maintenance will not be preserved following remarriage and therefore, if your spousal maintenance claim has been left open or if there is a spousal maintenance order in force, upon remarriage your claim for spousal maintenance will automatically be dismissed by the courts.

This is known as the ‘remarriage trap’ and once the final order of divorce (or dissolution) is granted by the court, if a party remarries or forms another civil partnership, they cannot apply for a financial order or property adjustment order against the other party.