The pronouncement of Decree Absolute legally ends a marriage in England and Wales, but unless you resolve the financial consequences of the marriage breakdown, your former spouse may be able to make a future financial claim against you, even if you acquire the asset after your divorce.
The most common way to resolve financial matters is by both parties entering into a Consent Order. This is a legally binding document which sets out the settlement that has been reached between the parties and usually deals with pensions, transfer or sale of the family home (and the division of the sale proceeds), lump sum orders and maintenance orders (Child Maintenance is dealt with separately by the Child Maintenance Service). A Consent Order also deals with pensions and by way of Pension Sharing Order as pensions are an asset of the marriage and need to be considered when dealing with finances.
A Consent Order often contains a ‘clean break’ clause which means that neither party shall have any claim against the other’s capital or income in respect of the marriage in life or death. Both parties sign the Consent Order (meaning it is done by consent) and the Order is then filed with the Court. Once a Judge has approved the Order and the Court have sealed it, the terms are legally binding upon both parties.
Even if there are no matrimonial assets to divide, it is vital to enter into a Clean Break Consent Order to ensure that financial ties are severed and neither party shall have any future claim against the other.
It’s important to note that even if you and your former spouse have reached an agreement about finances, unless this has been incorporated into a Consent Order and sealed by the Court, the parties are not legally bound by the terms.
If an agreement can’t be reached between you and your spouse, there are various methods of Alternative Dispute Resolution which can be utilised to assist parties reaching a resolution. The first stage is often Mediation, which is a process whereby both parties meet with an independent Mediator (individually at first) who aims to assist the parties, acting independently, in reaching an agreement which can then be incorporated into a Consent Order (as above).
If an agreement still cannot be reached between you, either party may issue financial proceedings at Court in order that a Judge shall make the final decision as to the division of the matrimonial assets. Once the application has been filed, the Court sets a timetable for parties to provide full and frank disclosure, before listing a First Directions Appointment hearing. If an agreement is not reached at this stage, then the Court list a further hearing, known as the Financial Dispute Resolution Appointment (FDR) whereby a Judge gives an indication as to how they think the assets should be divided, but this is not binding on the parties. If matters are still in dispute, the Court list a Final Hearing whereby a Judge shall make a Final Order as to how the matrimonial assets should be divided. The Court process takes a significant period of time (usually over 12 months) and parties are encouraged to negotiate and settle throughout the proceedings.
If a party re-marries prior to resolving the financial consequences of the marriage breakdown, the re-married party shall lose all financial claims except for pension sharing. An obligation to pay spousal maintenance also ends upon re-marriage. It is therefore important that finances are dealt with alongside the divorce proceedings as any delay can be costly and ultimately can result in financial loss.
If you would like to discuss the financial consequences of marriage breakdown, or any other family law matters, please get in touch with our family team to arrange a free, no obligation 30 minute telephone consultation. You can contact the team on 01484 821500 or send us an email to arrange your free consultation. We’re #HereToHelp.