Aug 24
It is a common misconception that once parties are divorced or their civil partnership is dissolved this automatically ends all respective financial claims against one another.
But is this true? Do you need to get a court order if you both agree at the time to walk away without making any financial claims?
Clean break orders are important to prevent potential costly disputes in the future. A clean break order made by consent (agreed by the parties) is a good way for separating spouses to divide their assets fairly without the cost of court proceedings.
Claire Hunter, an Associate Solicitor in the Family Law team at Raworths highlights more details about when a clean break order could be suitable.
With the advent of online divorce in 2022 there is an increase in parties “doing it themselves”, saving the cost of lawyers advice and walking away. In doing this, however, you may not be getting what is fair and reasonable after what could be a very long marriage. Are you taking into account all of the assets? Do you even know what the true value of those assets are? In cases where women still lag behind their male counterparts in both income and pension it is crucial that everything is considered in the round and then tailored to meet needs and priorities.
The divorce and dissolution process, although linked to the finances, is dealt with under a separate application. Therefore parties can be divorced or have their partnership dissolved but their respective financial claims remain open. In reality this can mean that years after a marriage or partnership ending one party may be able to make a financial claim against the other. This includes, for example, for income such as maintenance and/or capital like the transfer of property, lump sums or pension shares.
This is likely to be an unwelcome surprise especially if one party’s financial circumstances have changed, for example they are remarried, started a new family, have come into an inheritance or retiring banking on a full pension and a claim arrives for that to be now shared.
Why consider a clean break order even if you do not intend on making a financial claim?
A clean break order is an order which simply terminates future financial claims during the parties’ lives or on their estate in death. This can be made either by consent (by the parties agreeing to sign a clean break order) or by the court if there is a dispute over the financial arrangements.
A clean break order is an enforceable court order which essentially ties up any financial loose ends that you may have as spouses and provides the security of knowing that there can be no claim made against you in future.
In the salutary case of Vince v Wyatt 2015 a claim was brought by the wife over 20 years after the divorce. The court heard that during their marriage the parties had no money at all, however, 3 years after their divorce the husband formed a successful energy company which was now worth millions of pounds. The wife successfully persuaded the court that despite the very lengthy period of separation she was entitled to a lump sum payment from the husband. Had the parties applied at the time of the divorce to enter into a formal clean break that reflected their financial position at the end of the marriage she could not have succeeded – a true reflection of the old proverb “a stitch in time saves nine”
Raworths’ Family Law team can help you make sure that you understand the nature of the matrimonial assets and advise that any financial agreement is fair and right for you in your particular circumstances. Not all cases are suitable for a clean break and it is therefore important that you take legal advice. If the plan is just to simply share the assets and walk away, we can prepare an order that makes sure that you can bank on those arrangements for your future and, should your financial positions change, that is properly protected from a future claim
Claire Hunter is a specialist family lawyer at Raworths based in Harrogate, North Yorkshire.
The Family Law team at Raworths is ranked in Chambers UK (Band 1) and Legal 500 UK, the leading guides to the legal profession.
Published on 22 August 2024
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