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Divorce and money: the financial order explained

Fiona Wood

02.10.2019

In some countries, when you get divorced you have to sort out your finances before that divorce can be finalised - but in England and Wales, this is not the case. Here you can be divorced without having agreed a financial settlement or having that agreement made into a court order.  

Do I need a financial order?

Good question. Some couples agree a financial settlement, but do not have it made into a court order. It is important to note that until you have a court order confirming your financial settlement, either you, or your former spouse, can usually make a financial claim against the other. These claims can be made until a financial order is made.

This means that if your financial circumstances improve after you agree a financial settlement with your ex, but this agreement is not made into a court order, your ex can at a later date try to claim more money from you, (and vice versa). Ex-spouses have made such claims many years after separation and in some circumstances have been successful. It is therefore important that you protect your position by getting a court order containing your financial agreement.

Another reason for getting a financial order is that if you reach a financial agreement with your ex, but they later renege upon the agreement, you have no way of forcing them to comply with the agreement unless the agreement has been made into a financial order. If there is a financial court order the court can force your ex to comply with it and even make them pay any legal costs you incur applying to court to enforce the order. Again, it is important to protect your financial position by getting a court order containing your financial agreement.

should I have a financial order 

How do I get a financial order?

When divorce proceedings are issued, the couple should try to negotiate a financial settlement at the same time. Discussions can take place directly between the couple, at meditation or through solicitors. If none of these routes produces a financial settlement, one of the couple will have to issue court proceedings, asking the court to help them agree a financial settlement. In most cases where court proceedings are issued, a financial settlement is agreed between the couple without the need for a contested final hearing before a judge, who imposes a settlement upon the couple.

Once a financial settlement is agreed, one of the couple’s lawyers will draft a proposed financial order containing the agreement reached. This document will be considered by the other spouse’s lawyer. When there is a final version of the proposed order that the couple are happy with, it is signed by them both and their lawyers and then sent to court for a judge’s approval. When it is sent to court it must be accompanied by a Statement of Information form completed by both spouses, which gives brief details of their assets, liabilities, pensions, incomes and their general circumstances, such as their ages, the length of the marriage and if there are any dependent children. This is to help the judge decide if the financial settlement reached is a fair settlement.

Having a financial agreement approved by a judge is not a rubber-stamping exercise. A judge can refuse to make a financial agreement into a court order. If a judge has concerns that a financial agreement is unfair or unworkable, they may request further information from the couple or ask the couple to attend court, so the judge can discuss their concerns with them. It is therefore important that you obtain legal advice upon your financial settlement and have a lawyer prepare the legal paperwork that is sent to court for a judge to approve. Not only will this give you a greater chance of having the financial  agreement made into a financial order by a judge, but it will also make sure that the financial order properly contains the agreement reached and provides you with the appropriate legal protection.

If you think a financial order is something you would like to explore, or if you have any questions, please get in touch today.

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