A divorce or the dissolution of a civil partnership is an incredibly stressful time with many issues for separating couples to resolve.
However, there is a common misconception that the matrimonial finances are automatically dealt with as part of the divorce or dissolution proceedings and that any financial ties a married couple have to each other are automatically cut once a decree absolute is issued.
This is not the case. A final divorce order is the legal end to your marriage, but separating couples also need to legally end their financial attachment by formalising a financial settlement by way of a consent order. Without one, an ex-spouse might be able to make a claim against you, even years after your divorce.
In this blog, our Divorce Law team looks at financial consent orders and explains why you need one.
What is a Financial Consent Order?
A financial consent order is a document that makes the financial arrangements made by a couple who are divorcing or dissolving a civil partnership legally binding.
It explains how a couple is going to divide up assets, including:
- Property, including the family home.
- Savings and Investments.
- Pensions
There may also be other considerations such as a family business, a farm or agricultural land, or rental properties. There might be children’s bank accounts to consider, vehicles or personal belongings.
It can also include arrangements for maintenance payments, including child maintenance.
How do I get a Financial Consent Order?
When you agree to divorce or dissolve a civil partnership, the first step that each party needs to take towards reaching a financial settlement is to provide full and frank financial disclosure.
Financial disclosure involves each party independently providing information about their finances (including income and any money in bank accounts or savings), assets (such as property, shares and investments, cars and pensions), and liabilities (for example, mortgages and other debts).
This information is then compiled in a financial statement (known as Form E), which is used as a starting point for couples to agree on how these assets should be divided so that it is ‘fair’.
Once a couple has decided on a fair financial settlement, a judge needs to approve it to make the agreement legally binding.
You do not need to attend court for this to happen. If a judge thinks that the terms of a consent order are ‘fair’, the Court will approve it, although if they do not think that it is fair, they can raise questions and ultimately ask you to review it.
Why is a Financial Consent Order important?
A financial consent order is a document that legally ends the financial relationship between former spouses or civil partners.
If you do not obtain a financial consent order, you leave yourself open to potential claims in the future.
Several cases have highlighted the perils of not legally ending the financial relationship between ex-partners in the form of a financial consent order. Lottery winners, successful businesspeople, and recipients of large inheritances have all had their fingers burnt by failing to put in place the appropriate financial orders following a divorce.
Even if you don’t have any assets to divide at the time of your divorce, it is still vital that separating spouses and civil partners end their financial commitment to each other. This can be done by way of a clean break order, a form of financial consent order that specifies neither person can make a financial claim against the other in the future.
How Can a Solicitor Help?
Conversations about money with an ex-partner can be extremely uncomfortable and, even for the most amicable of break-ups, discussions about the distribution of jointly accumulated wealth can cause disagreement and distress.
An experienced family solicitor can help parties reach an agreement in several ways, including negotiating with an ex-partner about the distribution of assets, advising on whether a proposed financial settlement is ‘fair’, and representing your interests in court if necessary.
Knowing what is ‘fair’ can be extremely difficult, particularly in cases where contributions during a marriage or civil partnership have been unequal, and a specialist divorce lawyer will be able to advise as to whether any agreement is in your best interests.
A solicitor will also be able to recognise any potential warning signs during the financial disclosure stage that might require early court intervention where necessary.
Sometimes it is necessary to instruct professionals known as experts to help in determining the net value of the marital assets, and solicitors are adept at drafting Letters of Instruction and organising reports from a list of experts.
This might include instructing a valuation expert to provide an independent valuation of the family home, a farm or land, a mortgage expert to provide a mortgage capacity report and, in the case of pensions, a pensions on divorce expert to provide a pensions report to determine how the pensions should be divided between the parties.
In the case of businesses, it might be a business valuation report that is required.
In addition, there are strict rules about transferring money or assets before a divorce. A solicitor can advise you on the best timings for the distribution of your assets, which can also affect how much tax you must pay.
Divorce Solicitors Near Me
At Onions & Davies, we understand that separating is hard, and it is not always easy to know the first steps to take when it comes to agreeing arrangements, determining children’s issues, or sorting out the finances when you are getting divorced or dissolving a civil partnership.
Resolving financial issues is crucial, and it is recommended that separating spouses should always take independent legal advice to resolve the financial matters on divorce.
We can help you to understand your options.
Even the most well-managed family cases can still be fraught with emotion and difficulty, but our aim is to provide support through that process so that proper decisions can be made for your and your children’s lives going forward.
Onions & Davies Solicitors provide legal services in Market Drayton and surrounding areas, Whitchurch, Telford, Shrewsbury, Loggerheads, Nantwich, Eccleshall and Newcastle.
We pride ourselves on having very competitive prices for divorce, for both applicants and respondents and we offer an initial non-obligation fixed fee appointment during which we will advise you comprehensively as to the expected costs of your case.
To speak to one of our family law solicitors, please call us on 01630 652405 or use our online contact form.
For more information about our Divorce Law service, please click here.
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