Do I need a financial order on divorce?

When should you apply for a financial order on divorce and do you actually need one?

Following the introduction of no-fault divorce in April 2022, many couples have found themselves applying for a divorce using the now streamlined, modern and efficient divorce portal, MyHMCTS. As part of the application process, the applicant(s) will be asked if they want to apply for a financial order on divorce, whether by consent or through contested court proceedings. The response required is simply a tick in the relevant box to say yes or no.

When it comes to sorting out a financial settlement on divorce, it’s important for everyone to obtain legal advice from an experienced family lawyer. However, the guidance on obtaining a financial order on divorce is extremely lacking within the divorce application process itself.

What is the difference between a final divorce order and a financial order?

A final divorce order – previously called a ‘decree absolute’ – confirms the end of a marriage, however it does not mean that all of the financial claims have been severed between the ex-spouses. As financial claims on a divorce can be pursued against one another’s income, pensions, property and other capital assets at any point after a divorce has concluded, it is imperative to resolve this formally by getting a court approved financial order in place for protection and peace of mind.

Some people might be of the view that their matrimonial assets are nominal at the point of separation, and so it is not worth applying for an order to confirm the arrangements and to achieve a clean break.

Case law example

The well-known 2015 case of Vince v Wyatt demonstrates why this is a mistake. This couple had very modest assets at the point of separation and no financial order was sought when the parties divorced in 1992. After the divorce, Mr Vince achieved remarkable success with his green energy business and became a multi-millionaire. In 2011, Ms Wyatt applied to the court for financial provision in the form of a lump sum and for interim payments to fund her legal costs.

Ultimately, the supreme court determined that Ms Wyatt’s application could proceed despite 19 years having passed since the divorce was finalised. She received a £300,000 lump sum plus significant payments towards her legal costs.

While no-fault divorce was introduced to enable couples to go through this difficult process as easily and amicably as possible, the financial arrangements can be complex and legal advice at the outset is certainly recommended – whether the matrimonial pot is significant or not.

If you have any questions or queries, please don’t hesitate to get in touch with our friendly team of family law experts.