Financial Remedy Orders are an essential and integral step in all divorce or civil partnership dissolution
Even when a couple have reached a financial agreement, setting out what will happen to the house, savings, pensions, maintenance etc on the breakdown of their relationship, the Financial Remedy Order is a must, setting that agreement in stone.
What Is a Financial Remedy Order?
A financial remedy order whether made by the parties agreement or by determination of the court, is a legally binding court decision that determines how a couple’s finances will be divided after separation. It can include:
Property adjustment orders i.e the sale or transfer of any property owned
Pension sharing orders i.e which of the parties will receive what pension and when
Maintenance orders i.e will one spouse be paying maintenance to the other, if so how much, when and for how long.
Lump sum payments for and savings, investments etc
Clean break orders to sever financial ties completely.
Why Are They Important?
Legal Finality: Once approved by the court, the order becomes legally binding, protecting both parties from future financial claims in both life and in death.
Fairness and Equity: The court considers factors like income, earning capacity, contributions, and the needs of any children to ensure a fair division.
Protection of Assets: Without a financial remedy order, one party could make future claims—even years after the divorce.
Clean Break Option: Enables both parties to move on financially and emotionally, especially when no ongoing support is needed.
Enforceability: If one party fails to comply, the other can enforce the order through the courts.
The order will extinguish claims on death.
A True Life Example
Example 1:
Mrs S had instructed solicitors in respect of her divorce. She was rightfully advised by the solicitors acting, to place the financial agreement which she and her ex-husband had reached into a court order. Mrs S did not think that there was any need for that. Mrs S’ mother died and Mrs S received a significant inheritance. Mr S, who had “promised” he would never make a financial claim did exactly that. Mr S received a share of the inheritance.
Example 2:
Mr T had a significant shareholding. Mrs T had no real asset base. It had been a long marriage. Mr T issued the divorce petition. Mr T had agreed that “no matter what”, Mrs T would receive half of his shareholding on retirement, to provide her with an income. No order was made setting out the financial agreement. Unfortunately, Mr T had an untimely death and by which time, Mrs T had remarried. Notwithstanding the verbal agreement, Mrs T was unable to make the claim and she lost a significant lump sum.
If you need assistance with Financial Remedy Orders, please do not hesitate to contact Lawson West Solicitors.
