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Clean Break Orders Explained

When married couples separate, there are usually financial matters that need to be resolved.  This can include whether or not to sell the house, whether there should be a share of either party’s pension or whether one party should pay ongoing spousal maintenance to the other.

Divorce finances: legally dividing a couple’s assets

The first step is to obtain full and frank financial disclosure of both parties’ financial circumstances.  The extent of the matrimonial pot to be divided is then known.  The next step is then to negotiate how it may be divided.

Often a starting point is a 50/50 split of capital assets.  It then has to be considered if there is a reason to deviate from such a split.  One of the most common reasons for deviating from an equal split is that the person who will be caring for minor children may need more than 50% to house or rehouse themselves.

Many people try to resolve matters themselves but usually do require legal advice for assistance with this, particularly as it can involve some complex issues. Couples can negotiate themselves or attend mediation or negotiation through solicitors to reach an agreement which can then be embodied in a legal document.

Deed of Separation – for couples not divorcing

If an agreement is reached and the parties are not divorcing then the financial agreement can be embodied in what is known as a Deed of Separation.  Courts tend to uphold Deeds of Separation if they have been reached without duress, are reasonable in all the circumstances and if each party has received legal advice.

Consent Orders – for couples that divorce

If the parties are divorced then they can embody any agreement they reach in a Consent Order.  This is sent with accompanying documentation (including a summary of their current financial circumstances which both parties will have seen) for the court to consider.  If the court approves the Order then that governs the arrangements for the financial settlement.  It is very difficult to later challenge a Consent Order.

Divorce financial applications to court

If the parties cannot reach an agreement then a financial application can be made to the court.  Disclosure is then given within a court document called a Form E and the matter is listed for a Financial Dispute Appointment [“FDA”] whereby the court timetable the case through to the next stage e.g. ordering the valuation of the matrimonial home etc.

Financial Dispute Resolution Hearings

The next hearing is usually a Financial Dispute Resolution Hearing [“FDR”] where the Judge assists the parties in trying to reach an agreement, but cannot impose an order upon the parties at that stage.  If that does not result in an agreement then the matter is listed for a Final Hearing, where a different Judge will hear evidence from both parties and decide what financial order should be made.

Reaching a clean break divorce

Often parties are seeking for there to be a clean break, whereby there are no ongoing financial claims against one another following the financial order being made.  There are certain circumstances where there will not be a full clean break, for example when it is appropriate for there to be spousal maintenance.  This is usually paid in circumstances where there is a large difference between the parties’ income and therefore one party makes a payment to the other (which is additional to any child maintenance).  It can be paid for as long as both parties live or for a term which is specified.  It will automatically come to an end should the receiving party remarry or die.

When the court considers a financial settlement, it takes into consideration the following factors:-

  • Income, earning capacity, property and other financial resources which each of the parties have or are likely to have in the foreseeable future, including any potential increases in earning capacity.
  • The financial needs, obligations and responsibilities that each of the parties have or are likely to have in the foreseeable future.
  • The standard of living enjoyed by the family before the breakdown of the marriage.
  • The age of the parties and the duration of the marriage.
  • Any physical or mental disability of either party.
  • The contributions which each of the parties have made or are likely to make in the foreseeable future, including any contribution by looking after the home or caring for the family.
  • The conduct of the parties within the marriage (if the court believes that it would be inequitable to disregard the conduct).  It is rare though for conduct to be taken into consideration.
  • The value to each of the parties within the marriage of any benefit which they would lose by ending the marriage.

When considering these matters, first consideration will be given to the welfare of any child who is under the age of 18; in which case the court shall have particular regard to:-

  • The financial needs of the child.
  • The income and earning capacity of any property and other financial resources of the child.
  • Any physical or mental disability of the child.
  • The manner to which the child was being educated or trained.

When dealing with a case where one person is not the mother or father of the child, the court will take the following into consideration:

  • Whether the person had assumed any responsibility for the child’s maintenance and if so to what extent and the basis on which the person had assumed such responsibility, and the length of time for which they discharged such responsibility.
  • Whether in assuming and discharging such responsibility, that person did so knowing that the child was not his or her child.
  • The liability of any other person to maintain that child.

Overview of orders a divorce court can make

The court can make the following Orders:-

  • A Lump Sum Order
  • A Property Adjustment Order where the property is transferred from one person’s name to another.
  • A Pension Sharing Order, where part of a pension is transferred to the other spouse.
  • Spousal Maintenance
  • Child Maintenance is generally dealt with either by agreement or through the Child Maintenance Service (CMS) if there is no agreement.  The Court do not generally have the power to deal with child support if there is a disagreement over this.

Sometimes claims for Spousal Maintenance can be capitalised which means that one person receives a capital lump sum in lieu of ongoing maintenance and likewise claims for pensions can be offset against other assets if appropriate.

Legal advice about financial claims when separating or divorcing

If you would like some advice from a family law expert, call us for a free initial conversation over the phone and we will help as much as we can.  If it is that you would like to come and see one of our family lawyers (or if we aren’t able to answer your questions because we need more time and detail) then we have a fixed fee price for a 1 hour meeting with any of our expert family lawyers.

Call to speak to our family law team to arrange an appointment at one of our offices using the telephone numbers below:

Leicester call us on 0116 254 8871.

Hinckley call us on 01455 639 900.

Market Harborough call us on 01858 467 181.

Corby call us on 01536 851050.