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Why you need a Financial Order during divorce

Financial Order

Our latest Family Law blog by partner Paul Cobb discusses the importance of making a Financial Order to sever all financial ties upon divorce, and the repercussions of not doing so.

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The law on divorce in the UK recently changed, with the introduction of no-fault divorce in April 2022, which removes the need for an applicant to show a specific reason for divorce other than that the marriage has irretrievably broken down. Additionally, the other party can generally no longer object to a divorce application to end a marriage.

Whilst getting a divorce means you are no longer legally married to your former spouse, you will still have financial ties to them which if not addressed, could cause significant problems down the line.

Do I need to use a solicitor for a divorce?

Whilst an online application can be made for divorce, by either party or jointly, issues can often arise in separating matrimonial assets, making the process far from straightforward.

Also, it is a common misunderstanding that divorce automatically breaks the financial ties between former spouses or former civil partners. This is not the case legally and financial claims can be made long after parties go their separate ways.

To completely sever the financial ties between you and your ex-spouse, you will need to make a Financial Order.

What is a Financial Order?

A Financial Order is an Order obtained by the Court which details how both parties will deal with your finances upon divorce and creates a legally binding agreement that can be enforced if either party breaches the terms of the agreement.

What if I choose to not get a Financial Order?

Essentially, there is no clean break between the parties if there is no Financial Order in place. This means that either party can make a claim through the courts for financial orders in the future.

Additionally, if you decide to remarry before applying for a Financial Order, you may lose the ability to make an application for financial relief from your former spouse.

What is the Court Process for obtaining a Financial Order?

First Directions Appointment (FDA) Hearing

The First Appointment or FDA hearing is the first hearing in the court for financial proceedings and sets the agenda for the case going forward. The FDA is usually listed for 45 minutes.

Before the FDA hearing parties are expected to disclose preliminary information that will enable them to negotiate to reach settlement on an agreed basis if this is possible and to prepare the case for the Financial Dispute Resolution (FDR) hearing should this be necessary.

There are several documents that are required to be prepared by and exchanged between parties, in advance of the FDA hearing.

At every stage, parties are encouraged to reach their own settlement via negotiation, using mediation where appropriate.

Financial Dispute Resolution (FDR) Hearing

The FDR hearing aims to assist the parties to settle disputes over the assets and liabilities that make up the matrimonial finances. The FDR hearing is usually listed for 90 minutes.

At the FDR hearing, the judge will not make a final decision on the case, however they will encourage parties to reach an agreement and provide an indication as to the likely outcome if the matter were to proceed to trial in the absence of any agreement being made. The judge who hears the FDR cannot later act in the Final Hearing.

Essentially, the FDR Hearing provides parties with an opportunity to:

  • discuss their dispute in detail;
  • narrow the financial issues between them; and
  • seek expert guidance from a judge on the likely outcome of their case (to help them negotiate a fair and reasonable settlement).

In Rothera Bray’ experience, most financial remedy applications resolve at this stage (if not reaching agreement before), without requiring a final hearing.

Final Hearing

The Final Hearing allows each party to present their case (either in person or through their legal representative) and for the other party to cross examine their evidence and raise issues. The Final Hearing usually lasts between 1-3 days (dependent on the complexity of the case).

The judge hearing the case will consider all the oral evidence and the documentation provided by the parties, before making a final order in respect of the division of the matrimonial finances. In reaching judgment in the case, the judge will consider what is fair in all the circumstances, taking into account the factors in s25 of the Matrimonial Causes Act 1973:

  • the income, earning capacity, property and other financial resources which each of the parties to the marriage has or is likely to have in the foreseeable future
  • the financial needs, obligations and responsibilities which each of the parties to the marriage has or is likely to have in the foreseeable future;
  • the standard of living enjoyed by the family before the breakdown of the marriage;
  • the age of each party to the marriage and the duration of the marriage;
  • any physical or mental disability of either of the parties to the marriage;
  • the contributions which each of the parties has made or is likely in the foreseeable future to make to the welfare of the family, including any contribution by looking after the home or caring for the family;
  • the conduct of each of the parties, if that conduct is such that it would in the opinion of the court be inequitable to disregard it;
  • the value to each of the parties to the marriage of any benefit which, by reason of the dissolution or annulment of the marriage, that party will lose the chance of acquiring.
  • the financial needs of any child of the family;
  • the income, earning capacity (if any), property and other financial resources of the child;
  • any physical or mental disability of the child;
  • the way the child was being and in which the parties to the marriage expected him/her to be educated or trained.

Our Family Lawyers are highly experienced in financial remedy proceedings, working on behalf of both applicants and respondents in respect of financial claims. We also have Resolution accredited solicitors as well as specialists in collaborative law.

If you need advice on getting a divorce or making a Financial Order, please contact our Family Law Team on 03456 465 465 or email enquiries@rotherabray.co.uk

 

Disclaimer: This blog is for information only and does not constitute legal advice. If you need legal advice please contact us on 03456 465 465 or email enquiries@rotherabray.co.uk to get tailored advice specific to your circumstances from our qualified lawyers

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