We’re separating. Why do we need a Financial Remedy Order?July 18, 2017
If your marriage or civil partnership is ending, you both have the right to make financial claims against each other. Our Family Law specialists explain how dealing with your marital finances could benefit you.
It is a commonly held belief that these financial claims cannot be made if you have divorced already, and particularly if you have remarried. However in most cases, this is not accurate.
Whether you make financial agreements between yourselves directly, with help from a solicitor or with assistance from the Court, the most common financial settlements often involve:
- Maintenance for you or your children, or both;
- Transferring property, such as your family home from joint ownership to the sole ownership of one of you;
- The payment of a lump sum, for example to share savings you have or to ‘off-set’ one asset against another;
- An order that you will share your pension.
However the right to bring financial claims is not automatically bought to an end when you divorce, nor when you remarry.
This is why it is important that you formally bring your financial relationship to an end using what is known as a Financial Remedy Order. Without this, the ‘door’ to a financial claim is left open.
Some may prefer to take the chance that administrative technicalities prevent their ex-partner from making a Financial Remedy Order against them; however our advice is that it isn’t worth the risk.
What can I do to protect my position?
If legally separating from a partner, ensure that a financial settlement is obtained before you bring your marriage to an end, and preferably before tying the knot again!
A Financial Remedy Order can be achieved in a number of ways, and at any stage after a Divorce Petition has been issued, even if the divorce has already been finalised. Where possible, it is advisable to include a claim for a Financial Order in the initial divorce application.
Are Court proceedings necessary?
It is possible to reach an agreement with your ex-spouse about capital, income and pensions which would be incorporated in a Financial Remedy Order by Consent. This would then be approved by the Court to become a legally binding Order.
However, if a separating couple is unable to reach an agreement; an application to the Court can be made for a Judge to make the decision. This can be a costly process so lots of couples try to compromise or seek the assistance of a mediator and/or solicitor.
If my spouse and I want to financially separate, but don’t want to divorce is there anything we can do?
Absolutely - you could choose to enter into a Separation Agreement which would set out the agreed financial arrangements for the separation period and what may come after divorce.
It is a very useful interim solution for addressing your long term matrimonial finances.