If nothing is done to protect the bank of mum and dad, there is no guarantee that monies will not be treated as a shared asset in divorce and split with the child’s partner.
Financial orders: What are they and why are they important?
When couples part, there are two separate elements that need to be taken care of.
The legal element
This involves a divorce (of a marriage) and a dissolution (of a civil partnership).
The financial element
This is the separation of your finances and agreement on how your assets will be divided. The legal document that outlines this settlement is called a financial consent order, or financial remedy order, but is commonly referred to as a financial order, or consent order.
This article answers a lot of the most frequently asked questions about financial orders, and explains why they are so important.
If you want to skip to the relevant section, you can follow the links below:
- How financial orders work
- Enforcement of financial orders
- Divorce without a financial order
- Clean break orders
What is a financial order?
A Financial Consent Order, now known as a Financial Remedy Order, sets out the financial agreement between parties who are separating or divorcing. I look at what can be awarded in a financial order in my article Divorce - what am I entitled to? here.
A Financial Consent Order creates a legally binding financial agreement between parties that can be enforced in the event that a party breaches a term set out in the Order.
Once it is approved, it can be very difficult to change and neither party can make a new claim against the other.
Either party can take the agreement back to Solicitors/Court in order to enforce any of the terms under the agreement in the event that they are not fulfilled.
It creates a financial separation between the parties.
What is the difference between a financial order and a consent order?
A Financial Order and a Consent Order are essentially the same – we use the term Financial Remedy order although in contested proceedings a Financial order may be made without consent.
How long does a consent order take?
Orders must now be submitted to the Court using the online system. We are now seeing Orders being granted by the Court within 2 weeks of it being submitted.
Can I apply for a consent order without a solicitor?
Yes – but the Courts are very particular for how the Order should be set out and what it is to include. If all the relevant information regarding finances and claims that could be made is not included, this may not prevent a further application being made later on based on something that was not included in the original order.
How much does a solicitor charge for a consent order?
Most Solicitors will charge on a time basis based on the Solicitors hourly rate. It is difficult to say how much drafting and securing an Order may cost, it entirely depends on whether the parties are agreed on a financial settlement, how much is going into the Order, and the complexity of it.
Can a court reject a consent order?
Yes the Court can reject Orders that are sent to them. It is at the Court’s discretion as to whether they approve of an Order, the Court will not support an Order if they feel that it is unfair.
If a term of the Order is broken by a party, the other party should seek legal advice.
The method of enforcing an Order will depend on each particular case and what method of enforcing would be the most effective. However, it is important to not that the entirety of the Order will not be enforceable.
Enforceable terms are those that are ‘Ordered’, and usually involve payments being made or transfers of property.
However, a party to the Order could apply for it to be varied if the terms allow them to do so. Whilst any provisions relating to lump sum orders or transfers of property cannot be varied, if the Order sets out maintenance, or periodical payments, either party could apply to have the terms of these varied.
Can I get a financial order after decree absolute?
Yes. Getting Decree Absolute does not put a stop on a Financial Order being made – until there is a Financial Consent Order in place, either party can make a financial claim against the other – there is not time on making a financial claim.
Unfortunately, not – the divorce does need to be up and running, and you cannot send any financial paperwork to Court for them to approve until you have reached the first stage in divorce proceedings, which is Decree Nisi.
You can of course come to an agreement between yourselves on the finances, but it will not be legally binding or enforceable until it is in the format of a Financial Consent Order and approved by the Court
Can finances be sorted before divorce?
You can start discussing and negotiating on the finances as and when you are ready to. You can get the paperwork drafted, agreed and signed, however, it cannot be sent to Court for approval until Decree Nisi is granted
Can I get divorced without a consent order?
Yes - although not getting a Financial Consent Order in place is unsatisfactory as it leaves both parties open to the potential of a financial claim being made by the other later on.
The financial of the parties at the time the claim is made will be looked at, which could impact a financial agreement if one party’s financial position has increased since separation.
Whilst a party could argue that anything received post separation should not be taken into account, the Court can only work with current financial positions and they cannot make an order based on finances at the time of divorce.
So, do I need a financial order?
Until there is a Financial Consent Order in place that has been approved by the Court, either party could make a financial claim against the other, although claims are restricted if the person making the claim has remarried.
Even many years after the Decree Absolute is granted, claims can still be made.
This was essentially what happened in Vince v Wyatt, a high-profile case that gained a lot of media coverage at the time.
What if you don’t get a financial order after divorce?
You can read the details here, but essentially, a former partner made a claim 18 years after a decree absolute, and no financial order had been but in place.
Mr Vince’s business had taken off many years after separation (his company was now worth £57million).
He ended up having to pay a significant settlement and Ms Wyatt’s legal costs after a lengthy court battle that went to the Supreme Court.
Clean break orders
The object of making a clean break order is to fully settle and resolve the financial issues between parties, so no ongoing periodical payments from one party to another are required. Simon Immins explains all about periodical payments in his article 'Does 'maintenance for life' really mean just that?' that you can read here.
It enables parties to gain financial independence from each other so that they can both move forward separately from each other.
Whether a Clean Break Order is granted by the Court depends on each particular case and their facts and whether it would be appropriate in the circumstances.
Is a clean break order the same as a consent order?
Generally, a Clean Break Order will set out the financial agreement between the parties and dismiss all other claims that the parties may be able to make against each other.
It often entails a lump sum being given to one party by the other, or ordered that the property be sold or transferred into the sole name of one of the parties, and no further actions are to be done by either party, for example periodical payments or lump sums.
A Financial Consent Order may set out that payments are to be made over a certain period continuing after the date of the Order – this means that although the finances are resolved between the parties, there is ongoing payments between the parties.
Can I get a clean break order if we have children?
Clean Break Orders may be possible between parties where there are children to the marriage, but it is important to note that a Clean Break Order cannot be achieved between a parents and a child as a parent cannot put an end to their responsibility to their children.
Head of our family team, Andrew Stynes explains some complicated issues around parental responsibility in his article here.
Financial orders: Advice from a specialist solicitor
Hopefully you’ve found the information here useful. I’ve summarised a few key points below:
- Financial orders are an essential part of a divorce or separation process.
- Clean break orders are preferable where possible, as they give financial independence to the separating parties.
- You can get divorced without a financial order, however if you don’t have one in place, there is no time limit.
Divorce solicitors in Bournemouth, Christchurch and Ringwood
If you would like to discuss any of the issues raised around separation, please don’t hesitate to get in touch. Our bright lawyers offer well-rounded advice in plain English.
Initial meetings for all new clients are free of charge and will usually take place over a cup of tea or coffee at our modern, town-centre offices, however we are currently having these over the phone or video conference.