Does Divorce Mean a Financial Clean Break?
Many people assume that once they are divorced, by way of a final order (formerly known as a decree absolute) their financial ties with their ex-spouse are automatically severed. However, this is a common misconception.
There are two immediate financial consequences following the final order of a divorce:
- Inheritance Rights: In the event of your ex-spouse’s death, you will no longer inherit from their estate under the terms of their will (if it still names you) or under the intestacy rules (if there is no will), as you are no longer legally their spouse.
- Pension Rights: You will likely no longer be entitled to receive a widow’s or widower’s pension under any occupational or personal pension scheme.
Beyond these points, your financial relationship with your ex-spouse generally remains open-ended. This means either party could potentially make a financial claim against the other in the future, even years down the line. For example, if you were to come into money through inheritance, a lottery win, or a successful business venture, your ex-spouse could seek a share.
What is a Financial Consent Order?
The only way to achieve a full and final financial separation is through a financial consent order. This is a legally binding document, approved by the court, that sets out how assets, property, pensions, and other finances are to be divided, or simply confirms that neither party will make any future claims.
Even if you have no assets to divide, you can still apply for a clean break consent order to protect against future claims. This offers peace of mind and finality.
A well-known case highlights the importance of this. A separated couple who had lived modestly went their separate ways, and decades later, the husband became a successful entrepreneur in the renewable energy sector. The wife later brought a financial claim, which was settled for £300,000 plus legal costs. Despite the lengthy time since the separation, over 30 years, the court allowed the claim, showing that without a financial order, former spouses may still pursue claims in future.
How to Obtain a Consent Order
Both parties must agree to the terms of the clean break consent order. It can only be submitted to the court after a conditional order (formerly decree nisi) has been granted in the divorce process. The application involves submitting a short financial summary (Form D81) and the draft consent order, which a judge will review to ensure it is fair before approval.
If you would like to discuss your personal circumstances or need assistance preparing a consent order, please contact Rebecca Smith.
Rebecca Smith
Rebecca joined Bates Wells and Braithwaite in February 2019. Rebecca initially qualified as a legal executive and later as a solicitor. She has over twenty years’ experience in a wide range of family disputes having previously trained and worked as a family solicitor in Bury St Edmunds.
Rebecca is a member of Resolution.
In her spare time, Rebecca enjoys horse-riding, walking and cooking with family and friends.