When a marriage ends, most people focus heavily on child arrangements, property division, and immediate financial settlements. However, one crucial element often gets overlooked: finalizing a financial order. In the absence of one, former spouses may still be able to make financial claims against each other, even years after the divorce is finalized.
What Is a Financial Order?
A financial order is a legally binding document issued by the court that settles the division of finances between divorcing parties. It can cover various aspects, including lump sum payments, property division, pensions, and ongoing maintenance. Without a financial order, the financial ties between former spouses remain open—indefinitely.
Why Do Financial Claims Remain Open?
Many people don’t realize that even after a divorce is finalized, financial claims may still be open if no financial order has been made. In England and Wales, there is no time limit for bringing a financial claim if a financial order was never put in place. This means that a former spouse could potentially make a financial claim years or even decades later.
For example, if one spouse’s financial circumstances change dramatically—such as receiving an inheritance or building a successful business—this could trigger a claim from the former spouse. In essence, a financial order provides closure, giving both parties financial security and certainty that no further claims can arise in the future.
What Counts as a Material Change in Circumstances?
When considering financial claims after divorce, courts will look at whether there has been a “material change in circumstances.” This could include events such as one party’s financial situation improving substantially, a new business venture, or even retirement. Without a financial order, a former spouse could argue that this change entitles them to a portion of the newfound wealth. Thus, securing a financial order at the time of divorce helps prevent future disputes based on changing circumstances.
For further insight into how material changes may affect future claims, you can explore this resource on why there’s no time limit on making a claim when no financial order is in place.
The Case for a Clean Break
In many divorces, a “clean break” order is pursued. This type of financial order ends all financial obligations between former spouses, meaning neither party can make future claims against the other. Even if ongoing spousal maintenance is included, a financial order ensures that all parties understand their long-term financial responsibilities.
Without this “clean break” assurance, financial ties remain vulnerable to future claims.
How to Obtain a Financial Order
Securing a financial order requires both parties to agree on a financial settlement. If they can agree, a solicitor can draft a “consent order,” which is then submitted to the court for approval. If no agreement can be reached, either party may apply to the court for a financial order, and the court will decide based on the case presented.
While it may seem simpler to part ways without formalizing finances, the peace of mind a financial order