Do I Need a Financial Order during Divorce even if My Ex and I Have No Assets?
- broadlegal
- Oct 12, 2024
- 4 min read
Updated: Oct 14, 2024
This is a very common question we get from people going through a divorce.
“A crucial element of a financial order is to prevent any future claims from being made against you by your ex-spouse. Until all claims related to the marriage are formally resolved by a court order, they will continue to exist, and your ex-spouse could bring a claim against you in the future. For instance, should your financial situation improve due to an inheritance or a lottery win, your ex-spouse could try to claim a share of your money. A divorce ends your marriage; however, it will not safeguard any wealth or assets you may acquire In the future.”
What is a financial order?
The first point to make is that getting a divorce and obtaining a financial order or dividing your assets (money, properties, business interest, pension, etc) are two different things, and require separate procedures.
Finalising a divorce requires two essential documents. The first document is the final order in the divorce, signifying the conclusion of the marriage. The second document is the financial order, detailing how your assets are to be divided if you have any, but more importantly preventing an ex-spouse from attempting to make a claim against you in the future, if you have no assets at the time of your divorce. Most financial orders result from a mutual agreement between the parties, making it a 'by consent' order. Obtaining a financial order in divorce is crucial as this document severs the financial ties between you and your partner, as explained further below.
Why should I consider a financial order?
If you are going through a divorce, there is no legal requirement for you to also get a financial order. However, we strongly advise that you do, as this will give you peace of mind for the future, especially if you are moving on with a new partner and building a new life with them. People with assets tend to obtain a financial order, but people without assets tend to see no need in obtaining one with a misconception that a final divorce order settles everything. What they do not realise is that the law is designed in such a way that your ex-spouse could attempt to seek a share of your assets years after your divorce, and it may cost you more to defend, if you find yourself in that situation.
A crucial element of a financial order is to prevent any future claims from being made against you by your ex-spouse. Until all claims related to the marriage are formally resolved by a court order, they will continue to exist, and your ex-spouse could bring a claim against you in the future. For instance, should your financial situation improve due to an inheritance or a lottery win, your ex-spouse could try to claim a share of your money. A divorce ends your marriage; however, it will not safeguard any wealth or assets you may acquire in the future.
What type of Financial Order should I get?
There are different types of financial orders depending on the circumstance. There are various factors to consider, such as the type of assets in the marriage, whether there are children and their ages, the income of the parties, and so on. The most common type of financial order where there are no assets in the marriage is a ‘clean break’ order.
Having a clean break order means from the date the order is made, neither party in the marriage will be allowed to pursue additional financial claims against the other person. This includes claims such as maintenance, lump sums, pension orders, or property.
How do I get a Financial Order?
A financial order can only be obtained through the courts. At Broadlegal, we have a two-stage strategy in helping our clients obtain a financial order. The first stage involves negotiations where we seek to put in place a mutual agreement between the parties on how the assets are to be divided. The agreement is then recorded in a consent order and sent to the court for approval. If negotiations fail, an application will be made to the court for a decision to be made.
The common reasons why an application will need to be made is where one party is not cooperating, for instance, where they are not responding to correspondence, not forthcoming with information or they are hiding assets.
What are the costs involved?
This will depend entirely on the circumstances. The costs will obviously be significantly less where there are no assets or the matter is straightforward, and court proceedings are not required. We offer a fixed fee in such cases.
The more complex and highly contentious matters, such as where a party is hiding assets in the UK or abroad, or a party is not cooperating in some other way and the matter is being unnecessarily protracted in court, then there would be more costs. In such cases, an hourly rate would be more appropriate.
In all cases, we can offer a pricing structure that works for you and allows you to proceed with your case. This includes a deferred payment agreement where our fees are paid at the end of the case. If you require more information on costs and our pricing structure, please get in touch.
How Broadlegal Can Help You
If you are going through a divorce, it is normal to have concerns and several unanswered questions. Our family law experts are here to help. We offer an initial free consultation designed to cover any questions you may have and guide you in the right direction.
Telephone +44 (0)208 090 8363
