Family law myths number 2: does my Final Order in the divorce mean I am protected financially?
The introduction of no‑fault divorce has meant that the divorce process is now more simplified and user-friendly for clients. Couples can initiate the divorce process using the court’s online platform for this, without the need to instruct solicitors.
However, when getting divorced there are two strands of the legal process that must be considered. The first is to dissolve the marriage and second resolve the division of the matrimonial finances. We look at what a final order in a divorce means for your finances. In addition to this if a couple have children together they would also need to consider how the children spend their time after separation.
What is a final order?
What was previously called decree absolute, which is now the final order in the divorce application, is the final step that dissolves a marriage. This terminates the marriage. However, pronouncement of the final order does not mean that the parties are immune from potential financial claims from the other party. Instead the court will need to dismiss financial claims for the parties as part of a specific separate court order to resolve the financial remedies.
If a couple divorce and obtain their final order but have not resolved the division of the matrimonial finances, there is potential for the other party to make financial claims for income, capital and property as well as pensions against the other party.
Deciding matrimonial finances
Couples should take advice and should try to agree the division of the matrimonial finances part of the divorce process. They should record their financial arrangements in a consent order prepared by a solicitor for the court to consider.
Judges do not simply rubber stamp their approval on financial remedy orders filed by the parties, but they will need to consider that the order satisfies the criteria under section 25 of the Matrimonial Causes Act 1973 and case law. When the judge approves the parties’ financial remedies the parties claims for capital and pensions will be dismissed immediately. In cases where there is a clean break, the parties’ income claims are dismissed too or where spousal maintenance has been ordered there will be a specified term for the maintenance payments.
There is not a limitation period for the timeframe for a former spouse to make claims although remarriage can limit the newly married spouse’s financial claims and the provision that will be paid to them.
Therefore, if clients are getting divorced it is essential to have a good understanding as to how the finances should be divided, the potential for financial claims and how to properly record the division of matrimonial finances so that financial claims can be dismissed as part of the process.
Otherwise there is a risk of couples being divorced but still bearing the risk of financial remedy claims being made against them. There have been cautionary tales whereby ex‑spouses have gone on to create significant wealth, sometimes millions of pounds, which whilst is has not been shared has not been immune from matrimonial claims from marriages many years before, where the financial remedies were not resolved with the Court’s approval. For peace of mind parties should take independent advice at the outset to be protected for the future.
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