Making a clean break after divorce

Divorce is a difficult time and with the emotions involved, you will need to consider how you and your soon-to-be ex-spouse will separate your financial obligations.

While your Decree Absolute will end your marriage and any associated obligations that were part of your marriage, your finances may still be entangled. A Financial Remedy Order (also known as a Consent Order) can set out the financial agreement reached and if appropriate provide you with a Clean Break Order.  The idea of a Financial Remedy Order is to help make sure both of you know where you stand.

A Clean Break Order is a mutually agreed financial Court Order which means you can separate and protect your current and future finances from your ex-spouse with a legally binding document.

This will mean you are no longer financially connected, neither of you is required to financially support the other, and neither of you will be able to make a claim over any future finances at any time.

The last point is particularly important. If you do not have a Clean Break Order, your ex-spouse can make a claim for any of finances, at any time in the future, even if those finances do not yet exist.

If for example you inherit something valuable from a wealthy relative, or won the lottery, or even if your financial circumstances changed for the better upon re-marrying, they could make a claim for some of your new-found finances.

A claim could even be made after you have passed away.

Case Study A:

Fielder-Civil v Winehouse

Blake Fielder-Civil, who divorced Amy Winehouse in 2009, launched a legal battle in 2019 to claim money from her estate. This comes eight years after her death which in itself occurred two years after their divorce. Blake Fielder-Civil received a £250,000 pay out at the time of the divorce, but now feels he is entitled to a further claim on her estate. This case is yet to be decided.

Of course, you may well try and keep the costs of your divorce to a minimum, but the seemingly added expense of a Financial Remedy Order could ultimately end up protecting your future finances.

You also do not necessarily have to wait until you commence divorce or dissolution proceedings until you have at least the foundation of a Financial Remedy Order in place.  But the document cannot be endorsed by the Court until you have reached a certain stage in the divorce/dissolution proceedings.

Case Study B:

Anonymous Vs Anonymous

Mr and Mrs Anonymous decided to separate amicably but would defer their divorce for two-years rather than force one or the other to accept a claim of unreasonable behaviour. To keep their finances in check, and also know what each of them was entitled to, they created a financial agreement in lieu of a consent order at divorce stage.

This financial agreement then helped form the basis of the Financial Remedy Order ahead of receiving their Decree Absolute. Each party knew what was expected of them at the time of divorce and it helped keep financial matters amicable throughout the process.

However, it is possible to challenge financial agreements of this sort. So do not think of them as a replacement for a Financial Remedy Order. If you do put one in place prior to divorce, they do serve as a strong guide to how your finances will be managed, but only a Financial Remedy Order will be considered legally binding and hold anyone who breaches the Order in contempt of Court.

Of course, like with the above case study, things may well be amicable at divorce/dissolution stage, but anything can change, and emotions may well get the better of you or your ex-spouse.

You should take steps now to ensure you safeguard your future, because when you meet someone else, get a better job, or come into unexpected wealth, any vocal agreement you may have had isn’t worth the paper it’s printed on.  For peace of mind it is always beneficial to tie up all the loose ends.

For further advice regarding Financial Remedy Orders, divorce and any other aspect of Family Law, please contact a member of our team at familylaw@woodfines.co.uk

-Eloise Wilson

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