Whilst divorce proceedings are necessary to legally dissolve a separating couples’ marriage, they do not deal with resolving the finances associated with the marriage. Unless there is a legally binding document known as a financial consent order in place, the financial ties which both parties have to each other are not severed even if their Decree Absolute within the divorce proceedings has been pronounced. This means that either party would be able to apply to Court and make a financial claim against the other at a later date.
What does it mean to achieve a financial “clean break”?
Many separating couples seek to achieve a financial “clean break” from one another upon their divorce and in fact the Court does favour parties achieving a clean break where possible. This means that neither party will have any ongoing financial obligation or ties to the other.
Whether a clean break is achievable will depend entirely on the parties’ respective financial circumstances and what each party will need to ensure that their future capital and income needs are met.
Even if a clean break is not achievable straight away, for example, if it is necessary for one party to pay spousal maintenance to the other party to financially support them and help meet their income needs, such provision is usually for a fixed term or has a long stop date so the financial obligation is not indefinite and there is an end date upon which the clean break will ultimately come into effect.
In order for a solicitor to advise as to what would be a fair and reasonable financial settlement, and whether a clean break is achievable, they need to know and have evidence of the parties’ assets and liabilities. This is usually provided by way of an exchange of full financial disclosure including but not limited to 12 months’ bank statements, latest 3 wage slips, latest P60/tax return and pension cash equivalent transfer values (CETV’s).
How can we discuss the finances and reach an agreement?
- Direct discussions – Some separating couples remain on fairly amicable terms and choose to reach an agreement by having direct discussions between themselves.
- Family mediation – If communication has become difficult with your spouse but you still wish to try to reach an agreement between yourselves, family mediation may be appropriate as the mediator will act as an independent third party and help facilitate constructive conversations between you with the aim of reaching an agreement. Mediation is also beneficial if you would like there to be an exchange of financial disclosure but do not wish to instruct a solicitor to do this for you in order to keep your costs down.
- Negotiations through solicitors – If you feel unable to communicate directly with your spouse to reach an agreement or you want legal advice on what would be a fair settlement, financial negotiations can be conducted through solicitors who will put forward proposals to your spouse or their solicitor on your behalf until an agreement is reached.
What happens after we reach an agreement?
Once you have reached a full and final financial agreement, the terms of the settlement need to be recorded in a legally binding document known as a Consent Order. The Consent Order is filed at Court along with a Statement of Information form which sets out the facts of your case and provides the Court with a snapshot of your respective financial circumstances. The Court requires this information from you when considering whether to approve the agreement you have reached. You will require a solicitor to prepare these documents and submit them to the Court.
If you would like any further advice or assistance in respect of resolving the finances associated with your marriage and achieving a financial clean break, please contact our expert family law team on 0113 322 9222 or enquiries@consilialegal.co.uk.
