This is a gentle reminder that the information on the site is not a replacement for legal advice and we do not accept any liability for it. Seek legal advice here.
Introduction
When you get divorced, it’s also necessary to sort out financial matters between you. This is for practical reasons, but also because you have the right to make financial claims against one another.
These claims can be for transferring or selling property, for a lump sum, for regular maintenance for a spouse and any children, establishing a trust, and/or deciding how debts are to be paid.
Your final divorce order does not end these. Only a financial remedy order can:
Decide who has what in a way that is enforceable against your ex. Agreements between you and your ex are not generally enforceable unless they have been turned into a court order
End your claims against one another permanently with something called a ‘clean break’. Without a clean break either of you could come back for money in the future, although the more time has passed the less valuable the claim
The best thing to do is to have a financial remedy order. Without this you cannot enforce any agreement between you, or end the risk of future claims against one another.
A financial remedy order sets out the financial arrangements between you. If you agree these arrangements between you, you can post the details to a judge (see our page on When You Agree) and ask the judge to consider whether they are fair. If the judge thinks the arrangement is fair then they will turn your agreement into a financial remedy order, known as a Consent Order because it is made with the consent of both of you. You won’t have to set foot in a court.
If you can’t agree, then either of you can ask the court to decide the case. You can apply to court and the court will hold a series of hearings to decide how your money should be split. In the end, the judge will decide who has what, although many couples reach agreement during or between these hearings.
Below, we have a summary of the law. It is just that - a summary, and there are exceptions, and special situations, and things we have omitted because this is just a website. Seek legal advice for tailored advice on your situation.
Deciding what is fair
When it comes to dividing up your assets, you have to follow the law.
The law is in Acts of Parliament and cases that have been decided by judges in our highest courts. These cases in the higher courts set out principles that all judges in the lower courts have to follow.
The law says that the outcome has to be fair.
Fairness is about:
Marriage as a joint partnership and this should be reflected by sharing the money
Prioritising the welfare of the children
Meeting both parties’ needs for somewhere to live and enough money to live on, and pension
Compensating one party for disadvantages caused by the relationship (however, this is very rare even where there is disadvantage)
Giving each party an equal start on the road to independent living
Allowing you both to move on and start afresh
Fairness is not a one-size-fits-all thing. It depends on your family’s unique situation. There is a list of things that the court has to look at to decide whether or not the outcome is fair. These are known as the ‘Section 25 Factors’.
That means that if you and your ex are negotiating you have to look at the Section 25 Factors too.
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Professor Polly says: “There are lots of different ways to divide things up to be fair. One party has the house, and the other cash. One has a business and the other the house. A bit more of this, a bit less of that. There are lots of different ways to split the different assets.
There is also a range of outcomes that might all be fair in your circumstances. Within that spectrum, an arrangement might be very generous to one spouse but still be fair if there are valid reasons for that. The main thing is that any outcome has to meet both of your needs for somewhere to live and money to live on.
The arrangement also has to be realistic and workable.
If a judge thinks the arrangement is fair, they will approve it and turn it into a court order. If the judge says the agreement is not fair, meaning that it is outside the range of fair outcomes, you and your ex will have to renegotiate.”
On the next page, we look at the section 25 factors - those things the court has to take into account when deciding what is fair.