Aroundtown Magazine May June 2023 edition

FAMILY
Legal
talk
With Elmhirst Parker Solicitors
The importance of financial
Consent Orders in divorce
When choosing to divorce,
former couples may be under
the impression that all ties are
automatically severed upon a
Final Order (formerly known as
a Decree Absolute) being made.
But this is incorrect. Financial ties are not
automatically severed and parties are at risk of
future financial claims being made by their exspouse
if they fail to put a financial agreement in
place by way of a Consent Order.
A Final Order on divorce only ends the legal
contract of marriage. A financial Consent Order
is an essential part of divorce proceedings to
ensure matrimonial finances are divided as fairly
as possible. The Consent Order can detail any
spousal maintenance or lump sums that are to be
paid, or it can ensure a clean break (where each
party retains what they have).
The important part is that it dismisses future
claims against each other, thereby protecting
each party from any financial claims on property,
inheritance or pensions that they may own at a
later date.
Simply having a verbal agreement about how
you decide to divide combined matrimonial assets
is not enough. People can, of course, change their
minds over the years and go back on their word. A
financial Consent Order is legally binding and can
be enforced by the Court if terms are breached.
How is the matrimonial
pot divided?
What a party might be entitled to on divorce
depends on the length of the marriage and the
factors that are set out under section 25 of the
Matrimonial Causes Act 1973. This mainly looks
at earning capacity versus financial needs. Other
aspects are considered, such as age and health
of both parties, contributions both have made to
the marriage, and the standard of living enjoyed
by the family before the marriage breakdown.
Assets are split into two categories: matrimonial
property, that which you acquired during the
marriage, and non-matrimonial property, anything
you owned before the marriage. A financial
Consent Order usually just shares out the
matrimonial assets, but if this is not sufficient to
meet both parties’ needs then it can include nonmatrimonial
assets.
There are no concrete rules regarding
the division of assets. It should be fair and
reasonable, but this does not have to mean both
parties receive an equal share.
For marriages longer than ten years, the first
question asked will be why shouldn’t the pot be
split 50/50? Is this because one spouse has a
bigger future earnings potential and has made
a higher contribution over the years? Or does
one person have large debts, such as a credit
card or overdraft? Perhaps one party has been a
stay-at-home parent or cannot work full-time due
to childcare commitments, so half of the capital
won’t cover their housing needs.
For marriages less than five years where there
are no children, and limited (or zero) joint assets, it
may be advised to seek a ‘clean break’ order.
If either party re-marries, then certain claims
that the person could have had against their exspouse
are automatically dismissed. This does
not include pension sharing provisions which are
only dismissed via a Consent Order. This is known
as the ‘remarriage trap’.
What about the family home?
Regardless of who legally owns the property,
the family home is usually considered a
matrimonial asset and both parties have a right
to live there. If the property is owned by just one
of the parties, then the other party will need legal
advice to ensure that their rights in the property
can be protected.
If neither party can buy the other out or agree
what is to happen with the property, then it may
need to be sold. The courts will consider the
needs of any dependant children and aim to
keep them in the house where possible until
they are 18.
Is a pension protected?
Pensions can be shared like any other asset
such as savings etc. How they are shared
depends on the individual circumstances of
the case, but any pension – whether joint or
solo – can be included. If a chunk of a pension
was acquired pre-marriage, it won’t stop it being
considered a matrimonial asset.
Do I need a solicitor’s help with a
financial Consent Order?
As the name suggests, a financial Consent
Order needs both parties to consent to the
agreement reached. If a marriage ended
acrimoniously, choosing to correspond via a
solicitor may avoid confrontation and a ‘power
imbalance’ when trying to reach such agreement.
The courts are very particular about how a
financial Consent Order should be drawn up and
what should be included. It can be rejected if a
Judge thinks the terms are unfair.
If one party is in a stronger financial position
than the other, it is best to seek legal advice as
it helps ‘level the playing field’ and reduces the
possibility of an unfair outcome.
To reiterate, without a financial Consent Order
dismissing future claims, an ex-spouse could
make a future financial claim against the other
party and it wouldn’t matter whether you’d been
divorced five years or 55 years! If you are already
divorced but don’t currently have a Consent Order
in place, it is never too late to make one.
*This is not legal advice; it is intended to provide
information of general interest about current legal issues.
• Civil litigation
• Residential conveyancing
• Family and matrimonial
• Probate and estates
• Wills • Lifetime planning
Speak to one of our experts on
01226 282238
17/19 Regent Street, Barnsley, S70 2HP
(also in Royston, Selby and Sherburn-in-Elmet)
www.elmhirstparker.com
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