Divorce or dissolution without financial settlement

Understanding divorce or dissolution without a financial settlement

What is a financial settlement?

A financial settlement refers to the financial arrangements made between divorcing spouses or those dissolving a civil partnership to distribute assets, income, and responsibilities. It ensures a fair agreement on financial matters post-divorce or dissolution. However, sometimes couples choose to divorce or dissolve a civil partnership without finalising a financial settlement, leaving financial matters unresolved.

Why might couples divorce or dissolve a civil partnership without a financial settlement?

Some couples may opt to divorce or dissolve a civil partnership without a financial settlement for various reasons, such as believing they can amicably resolve financial issues later or assuming that separation alone is sufficient to sever financial ties. Others may not be aware of the implications of leaving financial matters unsettled.

Legal implications of not having a financial settlement

Ongoing financial ties

Without a financial settlement, financial ties between ex-spouses or ex-civil partners remain. This means either party can potentially make financial claims against the other in the future, even years after the divorce or dissolution. These unresolved financial matters can lead to uncertainty and ongoing disputes.

Impact on future relationships

Entering into new relationships without a financial settlement from a previous marriage or civil partnership can complicate matters. New partners may become entangled in financial disputes, and the lack of a clean break can affect financial planning and stability in new relationships.

Potential risks and complications of divorcing or dissolving a civil partnership without financial settlement

Future financial claims

One of the significant risks of divorcing or dissolving a civil partnership without a financial settlement is the potential for future financial claims. An ex-spouse or ex-civil partner can initiate financial proceedings at any time, which can be disruptive and financially draining. This risk remains until a formal financial settlement is reached.

Changes in financial circumstances

Over time, the financial circumstances of either party can change significantly. Without a financial settlement, these changes can complicate any future financial claims and make it harder to achieve a fair division of assets. It’s essential to address financial matters promptly to avoid such complications.

Steps to take if divorced or dissolved a civil partnership without a financial settlement

Seek legal advice

If you have divorced or dissolved a civil partnership without a financial settlement, seeking legal advice is crucial. A solicitor can help you understand your rights and options for resolving financial matters. They can guide you through the process of obtaining a financial settlement, even post-divorce or post-dissolution.

Apply for a financial settlement

Even after divorce or dissolution, it is possible to apply for a financial settlement. Acting promptly is important to address unresolved financial issues and secure your financial future. A financial settlement provides clarity and finality, allowing both parties to move forward independently.

Importance of a clean break order

What is a clean break order?

A clean break order is a type of financial settlement that completely severs financial ties between ex-spouses or ex-civil partners. It ensures that neither party can make future financial claims against the other, providing finality and financial independence for both parties.

Benefits of a clean break order

A clean break order offers several benefits, including eliminating the risk of future financial claims and providing certainty and peace of mind. It allows both parties to rebuild their lives without the fear of unexpected financial disputes arising in the future.

Divorcing or dissolving a civil partnership without a financial settlement can lead to ongoing financial ties and potential disputes. It is crucial to address financial matters promptly and seek legal advice to secure a fair and final financial settlement. Whether through negotiation, mediation, or court proceedings, achieving a financial settlement ensures clarity, stability, and financial independence for both parties.

Other types of financial orders

In addition to clean break orders, there are several other types of financial orders that can be issued to ensure a fair distribution of assets and support.

Lump-Sum orders

A one-time payment from one spouse or civil partnership to another, often used to settle debts or buy out the other party’s share of a property.

Property adjustment orders

These orders can require the transfer or sale of property to divide assets equitably.

Pension sharing orders

These orders divide pension assets between spouses or civil partners, ensuring that both parties have financial security in retirement.

Maintenance orders

Also known as spousal support, these orders require regular payments from one spouse or civil partner to another to support their living expenses.