Deciding how assets will be split in divorce can either be achieved voluntarily by the divorcing couple through a divorce settlement or by a court through a financial order.
Securing the right division of assets can make a huge difference to separating couples’ future financial security and standard of living, so it is essential to get the right advice and take the best approach for your situation.
While a voluntary settlement is often the best solution as it tends to be faster, less costly and less stressful, there are situations where a court-ordered division of assets will be in your best interests. On top of this, a voluntary settlement should always be made legally binding with a consent order issued by a court.
Our family law experts can advise on the division of assets in divorce, including through negotiated settlements and financial orders. To find out more about financial orders for divorce and our answers to some of the most common questions on this subject, please read on.
What is a financial order in divorce in the UK?
A financial order is a legally binding court order that specifies how a divorcing couple’s assets should be divided between them. It can cover all types of financial assets, including the family home, savings and investments, and pensions. They are also sometimes referred to as ‘divorce financial orders’ or ‘financial court orders’.
The exact details of a financial order in divorce will depend on the circumstances, but it can include a one-off division of assets as well as provisions for ongoing payments from one party to the other.
Examples of matters that might be covered in a financial order include:
- Spousal maintenance – where one party makes ongoing payments to the other to assist with their reasonable living costs.
- Child maintenance – to provide for the upbringing of children (however, child maintenance is often handled separately by the Child Maintenance Service).
- Property adjustment – determining how a property, such as the family home, should be dealt with
- Pensions – where one spouse has greater pension wealth than the other, the court might order them to split the pension pot with their spouse, give their spouse a greater share of other assets to offset the pension’s value, or, in rare cases, require the pension income to be shared between the spouses on an ongoing basis.
What does the court take into account when it makes a decision?
A court will consider various factors when deciding what a fair division of assets would be, including both financial and non-financial contributions to the family. The court will consider:
- The income, earning capacity and any other financial resources of both parties
- The reasonable needs, obligations and responsibilities of each party
- The needs of any children (this will always be prioritised by a court)
- The standard of living the couple enjoyed during the marriage
- The age of the parties and their current standard of health
- The duration of the marriage
- Any non-financial contributions each party made to the marriage
- Any potential loss of benefits either spouse will experience (e.g. a share of the other party’s pension)
Ultimately, the goal of a court is to achieve a fair division of assets that reflects each spouse’s reasonable needs and, where relevant, the needs of any children.
Do you need a financial order when divorcing?
Most divorcing couples will not need a financial order to decide how their assets should be divided, as this can instead be decided voluntarily between them. This is often achieved with the assistance of alternative dispute resolution methods, such as mediation.
With that said, even where a voluntary agreement has been reached, it is strongly advised that the parties apply to a court for a consent order and a clean break order.
A consent order (sometimes called a ‘financial consent order’) records the agreed division of assets and makes this legally binding. Without such an order, either party can simply change their mind and the other would have no option except to seek a financial order.
A clean break order severs the financial link between a divorcing couple. This prevents either person from making a claim against the other’s assets in future, so this should not be overlooked.
While we would always recommend securing a court order to make the division of assets legally binding, there are situations where this is particularly important e.g. where there are children to consider and if there are significant assets that must be accounted for, including pension wealth.
How to get a financial order
For most divorcing couples, applying to a court for a financial order to decide the division of assets will be a last resort, only required if an amicable agreement cannot be reached. However, there may be circumstances where a financial order is the most appropriate option, such as if there has been domestic abuse in the relationship and it is not reasonable for the couple to work together to agree the division of assets. A financial order application is also advisable where one party is secretive about finances or attempting to dispose of assets.
In most cases, the first step will be to negotiate the terms of a settlement. This can be through a simple agreement between the spouses, round-the-table negotiations with the spouses and their lawyers, or through a process such as mediation. Mediation involves the spouses working with a third-party mediator to agree on the terms of the settlement.
Before you can apply for a financial order, you will need to at least consider mediation by attending a Mediation Information and Assessment Meeting (MIAM). If you choose not to pursue mediation, you will be issued a certificate to show that you attended the meeting and the court will need to see this before starting proceedings.
Any agreement reached through mediation will be recorded in a Memorandum of Understanding. This is not legally binding; it simply records what has been agreed. As covered above, you should apply for a consent order to make the agreed terms legally binding.
If you do wish to apply to a court to decide the division of assets with a financial order, then you will need to complete a form (Form A) to start an application for ‘Ancillary Relief’. You will also need to complete another form (Form E) providing details about all of your financial assets and any liabilities (such as debts) – this is known as ‘financial disclosure’. Our team can assist with the process of completing Form A and Form E where required.
The court will then consider your application and set a date for a first appointment. At this first appointment, which happens in private, the appointed judge will work through any procedural matters about how the case will be conducted and encourage the parties to negotiate a settlement (where appropriate).
There will then be a Financial Dispute Resolution appointment. The parties will need to have submitted all relevant information and each side will normally be expected to have made an offer of settlement. The judge will, again, encourage a settlement at this point.
Finally, if a settlement has not been reached, a final hearing will be held in which the judge will hear both sides’ cases and any witness testimony. The judge will then decide how the assets should be divided and set this out in a financial order.
How much is a financial order?
The cost of a financial order will depend very much on the circumstances. There is an application fee which is £303 as of 1 May 2024. However, the more significant costs will usually be the legal fees charged by the two parties’ lawyers.
The more complex a case is and the longer it takes to resolve, the more the legal fees are likely to add up. This is one of the key reasons why a negotiated settlement is generally preferable, as the legal costs involved tend to be much lower.
Can you get a financial order after divorce?
You can get a financial order at any point during or after a divorce has been finalised, however, it is very strongly recommended to have the order in place before the divorce is finalised. Resolving the division of assets before the divorce is completed helps to protect both parties against the risk of future financial claims and allows them to make a clean break so they can move on with their lives.
It is important to bear in mind that, once a clean break order has been secured, no further financial claim can be made by either party against the other, so all financial matters must be resolved before this.
How long does a financial order take in the UK?
There is no standard timeline to secure a financial order in the UK, but typically it takes somewhere in the region of six months to two years. The more complex the case, the longer it is likely to take but the availability of court dates is also a very significant factor.
In general, it will be much faster to agree a settlement and secure a consent order than to wait for a court to make a financial order. A settlement and consent order can often be achieved in a matter of months where both spouses are motivated to resolve the matter.
Key points to remember about financial orders
If you are in the process of getting divorced or considering it, some of the most important points to remember about financial orders are:
- They are a court-ordered division of financial assets in divorce
- Most people do not need a financial order decided by a judge as it is generally possible to agree a settlement amicably instead
- Any voluntary settlement should be made legally binding with a consent order
- A clean break order should be obtained to protect against future financial claims
- If a court is required to decide the division of assets, it will consider various factors, including the parties’ respective incomes, assets and reasonable needs
- The needs of any children will always be prioritised
- The cost of securing a financial order will depend on the complexity of the case and how long it takes to resolve
- It is generally much less costly and faster to agree a settlement voluntarily rather than to rely on a court to decide
- You can apply for a financial order at any point, but it is strongly recommended to do so before your divorce is finalised
On top of these points, we would also like to emphasise the importance of good legal advice. Having the right support can increase your chances of achieving a division of assets that is fair and meets your reasonable needs, as well as those of your loved ones. It can also help matters to be resolved faster and ensure you have the right personal support to avoid any unnecessary stress and worry.
Get expert help with your financial order today
If you need advice on negotiating the terms of a financial settlement for divorce or applying to a court for a financial order, our team is here to help.
Our expert family law solicitors recognise that the division of finances in divorce is often a sensitive issue, so we will be on hand to provide clear guidance and straightforward advice.
To take advantage of a free 30-minute consultation with an expert local family law solicitor, call 0800 321 3832 or complete our quick online form.
Richard England
Divorce and Family Solicitor Sutton Coldfield
