What is a Financial Court Order in Divorce Proceedings?
When you are separating or getting divorced one of your priorities is to sort out how and where you will live after your divorce. The likelihood is that you will need a financial court order as part of the divorce process. In this blog our specialist London family solicitors take a look at what a financial court order is and why you need one.
Online and London Family Law Solicitors
What is a financial court order?
A financial court order is an order made by a family judge to distribute your assets after your divorce. You may see reference to a financial court order or financial consent order. They are very similar.
If you are able to reach a financial settlement with your husband or wife you can apply to court for a financial consent order. The judge has discretion over whether to approve the requested consent order. In most cases, a judge will approve the order and it will not be necessary to attend a court hearing to get your consent order.
If you cannot reach a financial settlement then either you or your spouse can apply to the family court for a financial court order. After a series of court hearings, the judge can hold a final hearing and decide, after hearing evidence, what financial settlement to order. The order is referred to as a financial court order. During the financial settlement proceedings, a husband and wife are encouraged to reach a financial settlement and, if you are able to do so, you can ask the court to make an agreed financial consent order.
Whether a financial court order is agreed between you (a financial consent order) or decided by the family judge after a contested court hearing, the judge has the same powers to make a range of family law orders.
Does the court make a financial court order in every divorce?
A court does not make a financial court order unless you or your husband or wife request a financial court order. This can be an agreed application to secure a financial consent order or an application made by one of you because you are not able to reach a financial settlement with your spouse and want a court order so you can move on with your life.
What financial orders can a court make?
A court has the power to make a wide variety of financial court orders, including orders for:
- Temporary financial support or short term spousal maintenance – this can be referred to as ‘maintenance pending suit’ by divorce solicitors.
- The sale of the family home.
- The transfer of the family home from joint names to one name or transfer of the family home from one spouse to the other spouse.
- Payment of a lump sum.
- Transfer of shares in a family business.
- Payment of spousal maintenance on a short term or long term basis.
- Sharing pensions by a pension sharing order.
- Payment of costs connected with the financial settlement proceedings.
The court also has limited powers to make orders for children, such as top up child support or school fee orders. The court only has limited jurisdiction to make child support orders because of the operation of the Child Maintenance Service, the government body that calculates child support for children.
Financial disclosure and financial court orders
The court will not make a financial court order without financial disclosure. The amount of financial disclosure needed is less if you are asking the court to make an agreed financial consent order. The court still needs financial information even if you have an agreed financial settlement because a judge cannot approve an order without first knowing if the order being requested is fair and reasonable. To secure a financial consent order you will need to fill in a financial statement of information summarising your financial and personal circumstances. You will not need to provide supporting documents.
If you are asking the court to make a financial court order because you cannot reach a financial settlement by agreement then court rules provide for full financial disclosure. This means you and your spouse will need to fill out a Form E document and provide standard supporting paperwork, such as three months of pay slips and twelve months of bank statements. The court will give a date by which time form E must be filed at court and exchanged with your spouse.
In some situations, you may not be satisfied with your spouse’s financial disclosure and you may want to ask questions or ask for valuations of assets, such as the family home, family business or pension asserts. At the first appointment hearing of a financial application the court can make orders for questionnaires to be answered and can also order valuation reports. Failure to comply with financial disclosure orders can lead to cost and other penalties.
If you are concerned about financial disclosure, it is best to take early legal advice from a specialist family solicitor. Call us on 0203 959 9123 for an appointment.
What is a clean break financial order?
You may hear family solicitors and judges refer to ‘clean break financial court orders’. A financial settlement can be a clean break settlement or a non-clean break financial settlement.
A capital and income clean break order means a spouse cannot apply back to the family court for additional money or further financial court orders unless the application is to enforce the existing financial court order. For example, if a husband or wife is refusing to cooperate with an order for the sale of the family home.
A capital clean break means a husband or wife cannot apply back to court for more assets (such as another lump sum or pension or more money from the sale of the family home) but they can apply back to court for more spousal maintenance or to ask the court to order that spousal maintenance is paid if the option of spousal maintenance was left open at the time the financial court order was made . An application for spousal maintenance may be justified if one spouse has now lost their job or is unable to work because of the ill-health of one of the children.
Ideally, a husband and wife will agree a capital and income clean break order or the court will make this type of order. That is because a clean break gives financial certainty and security going forward. However, it is not always possible to achieve an immediate capital and income clean break order because of your financial or personal circumstances.
Why do I need a financial court order?
You may not think that you need a financial court order for a whole variety of reasons, such as:
- You reached a financial settlement in family mediation.
- You signed a separation agreement.
- You signed a prenuptial agreement and you think that protects you.
- You have reached a financial settlement by agreement and have already divided your assets.
- You have a good relationship with your former spouse and do not see the need for a court order.
- You do not have any assets.
- You plan to move overseas after your divorce.
None of those reasons justify not getting a financial court order.
Even if there is a financial agreement recorded in a solicitors letter, separation agreement, prenuptial agreement or in a family mediation memorandum of understanding, you still need a financial court order so there is no prospect of your former spouse trying to re-negotiate the financial settlement. You may think that is unlikely but people and circumstances change.
If you have reached a financial settlement or you don’t have assets or you move overseas, this does not stop your spouse from making an application for a financial court order at a later date. For example, if you divorce in your twenties and you have no assets but you set up a highly successful business or you inherit money, a husband or wife could ‘come after you’ and make a financial claim for a share of your assets. Securing a financial court order now therefore gives you peace of mind and financial security for the future.
Do I need family law legal advice on a financial court order?
It is best to get specialist family law legal advice on a financial court order to make sure the order you are agreeing to is in your best interests. If financial proceedings have been started the likelihood is that you will need help, support and guidance through the financial disclosure and court process to help ensure that you achieve a financial settlement that meets your needs and is in your best interests.
Online and London Family Law Solicitors