Financial matters on divorce
What is a Consent Order and can I get a Clean Break?
The family team at Herrington Carmichael is experienced in dealing with all matters in relation to financial matters following the breakdown of a marriage. We pride ourselves on being highly approachable, sensitive, and supportive during what can be a difficult and emotional time.
When it comes to financial claims, these arise automatically between married couples when divorce proceedings are issued. They are not always pursued at the time of the divorce but always recommend that they are at least considered. We encourage couples to agree terms of financial settlement and wherever possible, to have their settlement made into a legally binding document called a “Consent Order”.
How to agree a Consent Order with your spouse
If possible, do try and sit down with your partner and agree a way forward.
If this is not an option, we would recommend that you try and agree to see a mediator, who will help you both to sit talk through the issues.
Whether or not you opt for either or both of the above options, we would recommend that you also come and see us for an initial advice as to the options available to you, to ensure that your financial best interests are properly considered.
The process of disclosure must always come first. Both of you need to be fully open as to what you own and earn. Once you, and your husband or wife are entirely clear about what is in the “pot”, you can start discussing how to share it.
The pot should be reviewed in specie:
Each of the above will need to be considered separately but also as a whole.
If you and your partner can agree what is to become of your assets and income, with or without the assistance of a mediator or ourselves, we can then review your agreement and cross check it against the legal test of “fairness”.
If we consider that your agreement will pass the legal test of fairness – about which we will fully advise you – we can then draft a Consent Order, in the same terms as your agreement, and file it court for the approval of a Judge. Only if the Judge considers it fair, will he/she approve it.
Once approved, the Consent Order will be binding on both of you.
What is a clean break dismissal?
A Consent Order can include provision for the dismissal of your and your spouse’s further financial claims against each other for capital, pension and income. This is called a full and final clean break. This means that whatever the future holds for both parties – perhaps they receive an inheritance or a lottery win – neither can seek further financial redress from the other. This cuts all financial ties which, if retained, might be cause for anxiety.
A clean break income dismissal is not always going to be the right outcome and will not often be appropriate where there are young children and the main carer of the children earns less than the other parent. In these situations, it is rarely fair or appropriate for the main carer’s income claims against the other parent to be dismissed and they may instead need to secure an order that provides for them to receive a monthly payment from their former spouse: known as “periodical payments” or “spousal maintenance”. Such orders are always variable and in certain circumstances can be capitalised such that the monthly payments are replaced with a lump sum. Where this happens, a clean break dismissal can then follow.
We will review all the circumstances of your case and advise on how best to secure a bespoke outcome for you, that addresses how best to fairly redistribute the family capital, pension and income.
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Herrington Carmichael offers legal advice to UK and International businesses as well as individuals and families. Rated as a ‘Leading Firm 2023’ by the legal directory Legal 500 and listed in The Times ‘Best Law Firms 2023’. Herrington Carmichael has offices in London, Farnborough, Reading, and Ascot.