Divorce: 'Clean Break Orders' can stop a future claim for pension or wealth
Importance of a financial order and the perils of not having one
Many people understandably think that once their final divorce order is made, that also brings an end to the financial claims that the husband and wife can make against each other.
The reality is that the financial claims a married couple have against each other live on long after the divorce has ended.
The court has the power, on application by either spouse, to make orders for lump sums, property transfer or sale, spousal maintenance, and pension sharing. Most of those claims are extinguished when the spouse making the claim remarries but otherwise, it is open to either one to make an application to court.
Example - a financial claim after 27 years of separation
Delay will affect the way the court views the application. For example, where a wife makes a claim out of the blue, many years after the divorce finishes on discovering their ex-husband has made his fortune, the court is bound to think carefully about awarding a lump sum. This situation arose in the case of Wyatt v Vince [2015]. The couple had been together for 2 years, living on benefits. There was one child of the relationship. Years later, the husband developed a successful eco energy company and the business was worth millions at the time of the wife’s claim some 27 years after separation. The claim was originally struck out by the court, but on appeal to the Supreme Court that decision was overturned. The court found that the standard of living enjoyed by the parties before the breakdown could not have been lower. The wife made no contribution, direct or indirect, to the creation of the husband's wealth.
The delay in bringing the claim may eliminate the claim altogether, but the couple agreed in the end that the wife should have a lump sum of £300,000.
Example - pensions could be at risk
Another situation where claims may arise is where pensions have not been dealt with after divorce. They may not seem important at the time but as the couple approaches retirement, the partner with less pension rights may reflect on this, and consider claiming a pension sharing order or lump sum to compensate them for their loss of pension rights. Their claims will still stand, even if they have remarried.
Example - lump sum payments
A further risk is that claims for spousal maintenance are not dismissed on divorce and if the parties’ financial circumstances change for instance if one spouse becomes unable to work or the other earns considerably more than before, they may wish to claim maintenance. The court can “capitalise” this by awarding a lump sum instead of ongoing maintenance payments.
It is always a good idea to seek expert legal advice on divorce. The divorce itself is a simple process but it is a mistake to think that the divorce ends financial claims arising from the marriage, and serious consequences can arise if these are not properly dealt with.
A Clean Break order, dismissing all the remaining financial claims a couple has against the other is often easy to obtain. Here at Lawson-West we have a highly experienced team of family lawyers who can help you achieve the outcome you need. Contact Us.
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