Why you should always have a financial consent order in place following your divorce

It is important that your agreement is detailed within a legally binding court order with a clean break clause to ensure that you are both protected from future claims from your ex.

What is a financial consent order?

A financial order is an order made by the court which turns your financial agreement into a legally binding order. It will specify how matrimonial assets will be divided upon divorce (such as property, money, pensions and investments) and whether there are to be any ongoing payments between the parties such as spousal maintenance or child maintenance.

A financial consent order will also contain a ‘clean break clause’ which prevents either party from making any future claims on the others capital, income, pensions or inheritance. A clean break clause is important to have in place especially if you are worried your ex may try to make a claim on your future assets after you have separated.

Please note that should you and your spouse reach an agreement through mediation, this agreement is not legally binding, and you would need to have this drafted into a financial consent order to be approved by the court.

Remarriage trap

The ‘remarriage trap’ arises when one party remarries after the divorce is finalised but before resolving the finances from their former spouse through a financial order. This will result in the individual who has remarried being barred from applying for financial provisions in relation to their ex-spouses’ assets.

In the case of E v E, the husband’s solicitor did not file the financial agreement with the court until three days after the husband remarried. In this case, the wife held the bulk of the wealth between the parties and was to pay the husband a lump sum of £250,000. Despite this only being a short time after the remarriage, the court refused to approve the order, and the wife was not required to share any of her assets.

However, if your ex has remarried but you have not, you are able to make a financial claim against their assets.

If you have not been able to reach an agreement in relation to your finances prior to remarrying, you should at the very least make an application for financial relief before you remarry. This will ensure that your financial claims against your former spouse are protected, other than the right to receive spousal maintenance which ends on the recipient’s remarriage.

The easiest way to avoid falling into the remarriage trap is to make sure that you have a financial agreement in place addressing the division of the matrimonial finances. Please be aware that the agreement must be approved by the court in order to be legally binding.

Why do I need a financial consent order?

It is important that you have a legally binding financial order in place upon finalising your divorce to protect yourself from any future claims from your ex-spouse. By having an order in place, the agreement you have reached is set out clearly to avoid any confusion later.

If you wish to remarry after your divorce is finalised, having a financial consent order in place will also protect you and your new spouse from any future claims from your ex-spouse.

Having a financial consent order in place will give both parties peace of mind that their financial ties with their ex-spouse are cut upon divorce and there is no risk of any surprise future claims later down the line!