Types of financial orders in divorce explained
If you are going through a divorce, you may have been advised to consider putting a financial order in place, which outlines financial arrangements between you and your spouse. In this article, Partner and Head of Family Law Noelle Heath explains financial orders and why you may need one.
What is a financial order?
A financial order is a document which outlines the financial arrangements for division of the matrimonial assets between spouses. The terms of a financial order can be reached by agreement (known as a financial consent order) or if agreement cannot be reached and court proceedings are necessary, the court will make a financial order at the end of those proceedings. When the court has approved terms of an agreed order or made a financial order, the arrangements set out in it are legally binding in England and Wales.
When divorcing, the decree absolute document signifies the legal end of the marriage but it will not end any financial obligation between you and your ex-spouse. To formalise your financial agreement with your ex-spouse you need to apply to the court for a financial order made by consent.
Types of financial orders in divorce
There are several types of financial orders in divorce, but which one(s) is most suitable for you depends on your circumstances. Before you consider a financial order, it is recommended you speak to one of our experienced divorce solicitors to find out which one is most appropriate.
Types of financial orders you may come across are:
- Pension sharing order
- Property adjustment order, e.g. , sale of transfer of the family home
- Maintenance order
- Lump sum order
The types of financial orders explained
The type of financial order you will need depends on your circumstances. Below we explain the different types of financial orders:
- Pension sharing order – Divorcing couples may be entitled to a share of each other’s pensions. If so, a pension sharing order should be obtained to outline what percentage of a pension is to be shared ex-spouse. There are various factors that affect how much pension you are entitled to. It is advisable to speak to one of our divorce and family law solicitors who can explain your pension rights to you.
- Property adjustment order – These orders detail what should happen to any property and can refer to the sale or transfer of any property.
- Maintenance order – In circumstances where one spouse has financially supported the other, they can be ordered by the court to make spousal maintenance payments to their spouse or agreement can be reached between the parties. Not everyone is entitled to receive maintenance payments from their ex-spouse. Who is entitled to maintenance payments depends on numerous factors, such as the length of the marriage, the earning capacity of each person and the financial needs of each person. The maintenance payment can be set for a limited time or until one of the ex-spouses dies, remarries, or enters a new civil partnership. Maintenance payments can also be made or agreed on an interim basis during the divorce process and until the time of any final financial order is made.
- Lump sum order – This is an order that requires one spouse to pay a lump sum of money to the other spouse. Although the order is known as lump sum the money can be paid in instalments
For advice on divorce and financial orders please contact us on 033 3344 9600 or email [email protected].
Author: Noelle Heath, family law.
