A Financial Order sets out the financial arrangements between you and your former partner on Divorce. The Financial Order is approved and issued by a Judge and is legally binding in England and Wales.
Many people believe that reaching an informal agreement about the separation of their finances is enough, and whilst this is often the quickest and most cost-efficient way of resolving any issues, the agreement is not legally binding.
This means that the agreement can be ignored or broken and there are no legal consequences. This could leave you in financial difficulty both in the immediate future and long term.
It’s best to get a divorce and a Divorce Financial Order at the same time so that when both the Decree Absolute and the Financial Order have been issued by the Court, you are divorced and your finances are protected.
For initial advice get in touch with our Divorce Solicitors.
We're rated‘Excellent’If you don’t get a Financial Order before your Divorce is finalised, this could result in either:
There is no specific time limit for you to make an application for a financial remedy against your former partner.
If you decide to remarry before you make a Financial Order, you may lose any ability to claim any financial relief from your former partner. This is also reversed, so if your partner was the respondent in the divorce proceedings and they remarry and you don’t have a Financial Order, they cannot now make an application for financial relief. This again is known as the remarriage trap.
The only exception to this is possibly an application for a Pension Sharing Order.
You can get a Financial Order from the Court in one of two ways. You can make an application for:
If you and your former partner can reach an agreement, it’s really important that you both provide full disclosure of your financial circumstances. This will make sure that both you and your former partner are aware of what assets form part of the “matrimonial pot”. It also means you can both get independent legal advice about the financial settlement to make sure you are protected.
Once this happens, a Consent Order is prepared and signed by both of you. Providing the Decree Nisi has been pronounced in the Divorce proceedings, the Consent Order can be lodged at Court for a Judge to consider.
If an agreement cannot be reached, financial proceedings must be issued at Court. The Court will provide various directions. These will include asking for disclosure of each person’s financial position and to help you both try to reach an agreement. If an agreement still cannot be reached, the matter will be listed for a final determination and the Court will impose a Financial Order on both of you.
In other words, a Judge will decide and you are both legally bound to abide by the terms of the Financial Order. The Judge will consider all of the financial information provided, and work to produce an agreement which is fair to both parties.
In the divorce case of Wyatt v Vince (2015), a wife and husband divorced 22 years before an application for financial relief was issued. In the intervening years, Mr Vince made millions of pounds in his green energy wind farm business. His ex-wife sought payment of £1.9 million from him.
Because Mr Vince did not create his wealth until 13 years after the breakdown of the relationship, he sought to have his ex-wife’s application dismissed on the basis that it was an abuse of the Courts process.
However, the Court confirmed, “there is no time limit for seeking an order for financial provision or property adjustment for the benefit of a spouse following divorce”. That meant that Mr Vince’s ex-wife did have a right to proceed with her claim. The delay in issuing the application was a significant factor in considering her award, which was greatly reduced from the amount she was requesting.
This demonstrates that no matter how long ago you were divorced if you didn’t get a Financial Order or a Consent Order, you could be exposed to a claim at any point in the future.
You may hear about all the different ways that one person tries to reduce or defeat the other’s financial claim in separation or divorce. While it’s natural to feel protective over your assets, it’s vital that you disclose all of your finances and assets in divorce or you could face hefty fines or even imprisonment by the Court.
If you’re in a marriage or civil partnership, you’re automatically entitled to your former partner’s pension if you decide to divorce. Pensions are treated like any other martial asset in divorce, and so there’s a possibility that any pension funds will be divided between you and your ex, just like your home and any joint savings.
Often, the older you get, the more money you’ll have in your pension pot and when getting a divorce in later life this may be your biggest asset.
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