In this blog post I take a look at what a Clean Break Order is and answer some of the most commonly asked questions about them.
What is a Clean Break Order?
A Clean Break Order is a form of order that can be made by the court when assessing the parties’ financial settlement following divorce, enabling the parties to separate their finances from their ex-spouse.
This means that a party would no longer be required to financially support them, and they would have no legal entitlement to claim any money in the future. In short, any financial commitments or obligations that the parties may currently have with one another would end.
Why is a Clean Break Order important?
Separating parties frequently misunderstand their financial obligations to their ex-spouses following divorce proceedings, with many incorrectly believing that once Decree Absolute is pronounced, this ends the marriage and the potential financial relationship between them both too.
This is wrong, and if the situation is not addressed properly, can lead to a very distressing and costly dispute with an ex-spouse about money – irrespective of how long ago the parties may have separated. Even if the marriage has formally ended, separating spouses have the potential to pursue financial claims against one another until court orders closing the channels of claim are made – the clean break.
This means that even many years down the line, a party could be legally entitled to a share of their ex-spouse’s wealth. This could happen even if the parties do not have children together, have not spoken or interacted at all since separation, or even if the wealth has been acquired by inheritance received after separation.
Who should get a Clean Break Order and who should not?
The suitability of a Clean Break Order will be an important consideration for every divorcing couple, even if they feel they have already informally agreed on how to settle their assets or perhaps, feel that the total value of their assets does not warrant any discussion on separation.
Separating couples might feel that obtaining a Clean Break Order is an unnecessary expense or added stress when they have either informally agreed on how to separate the family finances, or perhaps have no significant financial matters to resolve.
However, it is important to see a Clean Break Order as a valuable investment to protect each person’s finances in the future.
The history of matrimonial finances is littered with cases where the parties’ failure to properly address their financial relationship has resulted in costly litigation many years after separation, including entrepreneur, Dale Vince, and lottery winner, Nigel Page.
However, there are situations where a spouse has given up a career to bring up the family’s children and may still have childcare responsibilities that prevent them returning to their career in a full capacity, following separation. Whilst in such circumstances, a clean break is still possible, it may be prudent to defer it for a period of time, e.g. until the children reach a certain age or finish their education.
In some situations, a party that has spent many years looking after the family home and children may never be able to return to their career in quite the same way and, ultimately, may not be able to achieve the income levels required to maintain the standard of living enjoyed throughout the marriage. In these circumstances, it may not be in the best interests of that party to have a complete clean break at any stage, but it is still vitally important to get the terms of a financial settlement properly concluded so that it is binding on the parties.
What are the advantages of a Clean Break Order?
Once the court has made a Clean Break Order, it would not be possible for either party to make any further claims or have the terms of the order altered.
The effect of a Clean Break Order is to terminate the financial obligations of each party towards the other and to bring the financial proceedings between the parties to a final conclusion. Understandably, this is often an attractive proposition to parties looking to move on following their separation.
How do I get a Clean Break Order?
To obtain a Clean Break Order, the terms of your settlement must be approved by a Judge as being “fair and reasonable”.
The terms of a Clean Break Order should be drafted by your solicitor. The solicitor will review the terms of the settlement you have reached with your ex-spouse, to ensure that the terms are likely to be considered “fair and reasonable” by the Judge approving the settlement.
This may require some additional disclosure regarding the parties’ financial circumstances, to ensure that all aspects of the financial settlement are suitably addressed.
How much will a Clean Break Order cost?
This really will depend on the complexity of your financial circumstances – the simpler the financial relationship, the simpler the terms of any order, which is reflected in the overall cost.
For processing the application for a Clean Break Order, the court will also charge an administration fee of £50.
The costs for the order are often shared equally between the parties.
Can I get a Clean Break Order after Decree Absolute has been pronounced?
Whilst you can still obtain a Clean Break Order after Decree Absolute has been pronounced, it is prudent to ensure that the matrimonial finances are settled before an application for Decree Absolute is made.
Practically speaking, if one party obtains a Decree Absolute and then remarries, they may lose some of their rights in any subsequent attempt to claim from their former spouse. So, whatever else happens, clients should not remarry (at least not without careful thought!) until a financial settlement has been finalised by way of a sealed order of the court and having allowed time for an appeal and service of an appeal to elapse – in reality, a further 28 days.
Furthermore, there are some circumstances where particular assets, e.g. trust funds, pension funds and other complex assets, cannot be transferred except to a spouse, and so in those circumstances it would again be prudent to delay the application for Decree Absolute until the terms of financial settlement (with or without a Clean Break order) are concluded.
The most important thing to understand is that it is okay to ask. Your solicitor should provide you with tailored, bespoke advice on your personal circumstances and set out the risks or concerns that you should be considering when making your decision about Decree Absolute and Clean Break Orders.
My Ex won't agree to a Clean Break Order, what can I do?
If a party does not agree to the proposed terms of a Clean Break Order, whether following independent legal advice or not, it may be helpful to consider if the point of dispute can be settled via mediation or some other form of alternative dispute resolution.
Ultimately, a party always can avail themselves of the court for assistance by applying for financial remedy proceedings. Through a series of up to three court hearings, the court will consider the suitability of the proposed clean break terms and if “fair and reasonable”, will impose the clean break on both parties.
If you are going through a divorce, or are already divorced, and would like to discuss a Clean Break Order with one of our solicitors, then please contact us to arrange an appointment.
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