If you’ve applied for a no-fault divorce already or read the worrying news about pensions and divorce, you might be asking – what is a financial order?
The no-fault divorce process goes into much greater detail about dividing your money and property, which might seem confusing or a bit daunting if it’s the first time you’ve heard of it. This article will explain exactly what a financial order is, if you need one (spoiler alert – a financial order is for people without assets to split too), and how to get one.
What is a financial order?
A financial consent order is a very important and powerful document. It’s a common misconception that your finances are dealt with as part of your divorce proceedings. However, this isn’t the case at all. Your divorce or dissolution is only the legal ending of your marriage or partnership. Even after divorce, your former spouse can make a financial claim against you. This is non more evident than the EuroMillions winner who had to give his ex-wife of ten years a £2million settlement or the new-age traveller turned windfarm millionaire who had to pay his ex-wife of twenty years £325,000 and pay £325k in legal costs.
The only way you can protect your finances now and in the future is by getting a financial consent order.
A financial consent order is a legal order made by the court. A court order is an instruction from the court. It makes the financial agreement that you have already reached legally binding for you both. The order can describe how you will deal with property, pensions and other assets when you divorce and even how you will deal with liabilities such as loans and credit card debt. It can also detail how ongoing payments such as spousal or child maintenance may work between you.
What is a clean break order?
Even if you haven’t heard of a consent order, you might have heard the term ‘clean break’ used. A clean break is the simplest type of consent order that will cut any financial ties between you and your ex-spouse. Without such an order, either of you could claim against the other many years after your divorce, as described earlier. Lottery wins, inheritances, and the proceeds of building a successful business or career, are all at risk without a clean break consent order.
What do I need? A clean break or a consent order?
It is quite possible to get a divorce without legally agreeing on any financial arrangements, although that’s not recommended. It’s a positive step forward that the new no-fault divorce process shines more of a light on financial orders to increase awareness.
Our view is that every couple who divorces should have a financial consent order in place, even those with no assets to split. A clean break order is so inexpensive at £299 that we like to think of it as an insurance policy that gives you lifetime protection.
The added benefit of a consent order is that it also makes any financial agreement legally binding, in addition to the clean break protection. This means that an agreement such as selling the former marital home and splitting the proceeds 50/50 becomes enforceable by a court so that neither party can change their mind and renege on the agreement. Relationships between separating partners can go up and down, so having this level of certainty gives you peace of mind.
How do I get a financial consent order?
To get a financial consent order, you must agree on your financial arrangements with your spouse and ask the court to make them legally binding. The consent order has to be written in a very specific way and contain the necessary wording to ensure that there is no ambiguity to ensure that it is legally watertight and achieves the financial objectives you seek.
A clean break order with Easy Online Divorce costs £299, a financial consent order is £499, and a consent and pension sharing order is £599. These fees include an experienced solicitor drafting the order and completing the statement of information, submitting the order to the court, and answering and dealing with any questions the judge may raise.
In addition, the court charges £53 to review and approve the application.
How does the financial order process work?
Once you’ve ordered one of our services, you will be sent an online questionnaire to complete. We will ask for you and your spouse’s current financial positions and the agreement that you have reached. You must provide full final disclosure, even if you have no assets to share. We use this information to complete the statement of information and the consent order. Once complete, we send the documents to you both to sign digitally and then we send the signed copies to the court for approval.
You can only ask the court to approve a consent order if you have started divorce proceedings and the court has agreed that you can get divorced. This is known as being granted a conditional order (decree nisi under the old law). The court takes around four weeks to approve a financial consent order, and the order comes into effect once the final order (old law decree absolute) is pronounced by the court, which is a minimum of six weeks after the conditional order.
The ideal situation is to be able to have your financial consent order ready for signing once you have your conditional order or decree nisi so that your finances and divorce conclude in the same timeframe.
Save £250 in less than a minute
We have devised a 50-second test to advise you of the type of divorce and financial order you need based on your circumstances. A high street solicitor will charge you £250 for an hour’s consultation for the same information. If you would like to take the test, you can do it here.
What do the new no-fault divorce laws say about dividing your money and property?
It is more straightforward and less expensive if you agree
The no-fault system says that it’s ‘usually more straightforward and less expensive if you agree with your wife or husband on how to divide your savings, property, pension and assets. In terms of legal costs, I’d argue that it is always more straightforward and less expensive if you agree with your partner.
If you agree, it will cost between £299 and £599, depending on your circumstances, to make your financial agreement legally binding with an online provider such as Easy Online Divorce. The same service with a traditional high street solicitor will cost £1,000 – £4,000 each (more on costs later).
On the other hand, the costs to divide your money and property if you disagree, which requires a judge to make a ruling, will cost each party an eyewatering £15,000 – £35,000. Hopefully, you can see that the latter option is best avoided, although there are circumstances, thankfully rare, where this option is needed. Examples would be where large fortunes are at stake, and a spouse was refusing to cooperate or disposing of assets.
Applying for a financial order – what should I tick on my divorce application?
When applying for a divorce, there is the question – Do you want to apply for a financial order? It then states, if you want to apply for either a ‘financial order by consent or a ‘contested financial order’ then select yes.
Our recommendation is that you tick Yes, and here’s why. Firstly, we believe that everyone should have a consent order’s financial protection. Even if you currently have no assets to split, we live a very long life, and a lot can happen, so protect yourself with a clean break order.
Secondly, ticking the box doesn’t obligate you to get a financial order. So, if you are still undecided and need more time to think, or if you and your spouse aren’t currently in agreement, you can still indicate that you want one, but you don’t have to proceed with the application for a financial order.
As outlined above, a financial order by consent requires a solicitor to draft the agreement and submit it to the court for approval.
Similarly, if you have a contested financial order, you will need to speak to a solicitor and pay £275 to the court to start the process.
I hope this article has helped explain what a financial order is, its importance, and how to get one. If you have any questions about this article or divorce in general, you can email or schedule a free consultation here.
We have devised a 50-second test that will advise you of the type of divorce and financial order you need based on your circumstances. This is the information a high street solicitor will charge you £250 for an hour’s consultation. If you would like to take the test, you can do it here.
Financial Consent Order Frequently Asked Questions – FAQ
Do I get a financial order automatically with my divorce?
No, you need to make a separate application for the financial order, whether this is by way of a consent order or through a court hearing with a judge making a decision. It is possible to get a divorce without a financial order, though this is not recommended.
Unless you buy a specific divorce and consent order package, a consent order is never included in a fixed fee divorce – it is a separate service.
We have no financial assets. Do we need a financial consent order?
Yes, you should, 110%. Even if you have nothing, if you were married for a very short time or if you both get on great and would never claim against each other, you should still get a financial order. Anything can happen in the future, and you get lifetime protection and peace of mind for such a small cost.
Can I get a financial order without being divorced?
No, you can’t. To get a financial order, you must have at least been given permission to divorce. This is known as a conditional order or a decree nisi under the old law. To get permission to divorce, you must have started divorce proceedings. The new law allows for individual and joint divorce applications.
When should I apply for a financial consent order?
You can only apply to the court to approve a consent order once you have started the divorce and got to the conditional order stage. Financial disclosure from you and your ex-spouse and your financial agreement is needed to start the consent order process. It then takes three to four weeks to draft your consent order ready for submission to the court. Ideally, you want to start the consent order process about a month after filing for divorce to ensure that all documents are ready for signing so that they can be submitted to the court when your conditional order is given.
Do we really have to provide full financial disclosure if we aren’t splitting any assets?
To get a consent or clean break order, a document known as a D81 Statement of Information must be completed and submitted to the court. This document shows your current financial positions and your financial position when your financial agreements have been implemented. The court uses this information to support their decision on if your financial consent order is fair, even if this is a clean break.
The minimum information needed is:
- Equity in properties
- Total savings and investments
- Total liabilities (not mortgage debt)
- Total pension valuations
- Monthly income, broken into income from employment, benefits, child maintenance payments, pension or other income.
You cannot get a consent order without this information being disclosed.
You don’t need to provide bank statements, property valuations, and other evidence. However, if the court found that a party had been deliberately withholding information to deceive the other party or the court, the consent order could be voided, and the perpetrator could face prosecution for fraud.
A consent order submitted to the court without any financial information raises questions for the court, so we ask our clients to sign a document if they don’t have any assets or liabilities.
Can I get a consent order without my ex’s agreement?
No, you can’t. You must both agree, and your spouse must provide their financial information. We cannot apply for a consent order if your spouse is unwilling to provide financial disclosure, and we can’t apply for a consent order if they refuse to sign the statement of information and consent order.
How long does it take for a financial order to be approved?
Once you’ve both signed the statement and information and consent order and you have your conditional order, we can submit them to the court for approval. An Easy Online Divorce drafted and submitted consent order typically takes around four weeks to approve.
How much does a financial consent order cost?
The court fee for submitting a consent order is £53. However, you will need a solicitor to draft your order, and the cost of this will depend on the complexity of the order and whether you use an online provider like Easy Online Divorce or a traditional high street solicitor.
Let’s start with the bad news first. Going to a high street solicitor can feel like the wild west. We speak to people every day, and the costs vary wildly from the expected circa £1,500 for a simple consent order to what can only be described as daylight robbery – £6,000 for the same simple financial order. Have a call around and get a feel for prices based on your specific requirement. Make sure to ask if there are any other costs and under what circumstances these extra costs would arise.
The good news is online providers such as Easy Online Divorce has transparent fixed prices.
A clean break consent order is £299
A standard consent order which includes a clean break, the sale or transfer of property, lump-sum payments, child and spousal maintenance and splitting savings and debt, is £499.
And our premium consent order which includes multiply properties and pension sharing orders, is £599.
Can I get a financial consent order after we have divorced?
Yes, you can get a financial consent order after a divorce. Although, the best practice is to finalise your financial arrangements before your final order or decree absolute.
Just remember that either party can make a financial claim against the other at any point after divorce unless you have a court-approved consent order. Some couples part on very good terms, sure that neither will make a claim, only to find themselves in a very hostile situation when one of them meets a new partner.
What is the difference between a financial consent order and a separation agreement?
A financial consent order is a legally binding agreement approved by a judge. If your ex-spouse doesn’t meet their obligations as agreed in your consent order, the courts have the power to enforce it.
A separation agreement, on the other hand is usually drafted by a solicitor and signed by both parties but is not legally binding. To enforce it, you would have to go to court and apply for a contested financial order (which costs tens of thousands of pounds), so arguably, a separation agreement from a legal point of view isn’t worth the paper (or rather the solicitor costs) it’s written on.
A separation agreement can be helpful for some couples, especially those needing help to set boundaries in the early days of separation. If you feel like you need a separation agreement, it is probably more helpful to go to a mediator who will take a more holistic approach and be much more cost-effective.
How do we reach an agreement on our financial consent order?
You can agree on the details of your consent order between yourselves, through mediation or by solicitor-led negotiation. If you can’t agree, you can ask the court to decide for you.
Deciding between yourselves is the least expensive option, but it does require openness and a willingness to cooperate. For couples having difficulties with the whole thing or specific elements, mediation is a very effective way to reach an agreement. Although mediation is likely to cost somewhere in the region of £500, it is still less expensive than using a solicitor or going to court.
In some situations, a solicitor or court is needed. However, be aware that a court will expect you to have at least tried mediation. Solicitors are very useful in some situations but be mindful that their business model is to charge by the minute, usually in 15-minute blocks – this means there is a natural conflict of interest between making money for the firm and resolving issues quickly. If you do have to go down a solicitor route, make sure that you are clear on what you want your outcome to be. If that is to resolve your divorce and finances quickly and as smoothly as possible, be cautious if your solicitor displays an overly aggressive approach to negotiation.
Does who was to blame for the divorce impact our financial agreement?
No, except in rare circumstances, such as murder or gambling addiction, the grounds for the divorce and who was to blame for its breakdown do not affect the division of assets. Divorce and financial orders are two separate cases. And now, with the new no-fault divorce law, neither party has to blame the other, instead a statement is made that the marriage has irretrievably broken down.
Is Child Maintenance included in a financial consent order?
Many spouses want to include child maintenance in a financial consent order to demonstrate proof of income to help them get a mortgage or a rental agreement.
Child maintenance can be included in a financial consent order, but it is only legally binding for 12 months. After this time, the Child Maintenance Service (CMS) has jurisdiction for the enforcement of child maintenance, including calculating the amount due. Decisions by the CMS override any agreement that you previously made between you.
I’m divorced/I’m divorcing under the old law – do I need to apply for a financial order under the new law?
Fundamentally, the law regarding financial orders has not changed. What has changed is the trigger to allow you to submit your financial order to the court. To get a financial order, you must have at least been given permission to divorce. This is known as a conditional order under the new no-fault divorce system (decree nisi under the old law). As soon as you have either of these, you can apply for a financial order.
What is a Form A and Form A1?
One of the most confusing parts of the new no-fault divorce process is the page after being asked if you want a financial order. Titled ‘How to apply for a financial order’, it says you need to complete another form (Form A or Form A1) and pay the additional fee.
This is misleading. A Form A (notice of intention to proceed with an application for a financial order) is for a couple in agreement, but if you are using a service such as Easy Online Divorce that files directly into the court department’s systems, you don’t need to complete a Form A.
Similarly, if you have a contested financial agreement, you need to complete a Form A1 (notice of intention to proceed with an application for a financial remedy), but again, if you have to go down this route, you will need a solicitor to help you, and they will complete the form A1 for you.
Will the court always agree with our financial consent order?
No, the court doesn’t blindly approve consent orders, and they can question the fairness of your agreement. The consent order process is voluntary between a couple, so the court won’t force you to do something if they disagree with your order. But they will ask questions or ask you to consider certain agreements to make sure that a person in a perceived weaker position is fully aware of the implications of the order.