Many clients, when divorcing, assume that when the Decree Absolute is granted, that it brings an end to not only the marriage but also to any financial claims that each spouse has against the other. This is not the case. Only a clean break can end the financial claims that divorcing spouses have against each other
A clean break means the severing of financial ties arising from a marriage. The only way for it to be obtained is through a Court Order. Usually this is agreed, and so a Consent Order can be entered into.
If matters can't be agreed, the Court can make a clean break as part of an overall financial application. The Court don’t have a duty to make a clean break, but the court must consider if it is appropriate.
Long after the divorce is completed, if a clean break was not obtained, then either party can ask the court to make financial orders against their former spouse. This can have dramatic consequences, because those financial claims are not restricted just to wealth that accrued during the marriage. The former spouse’s claims will include claims in respect of wealth accrued after the divorce. That can include an inheritance received after the marriage, savings that had accrued since separation, or anything else.
There is no time-limit on making the application. There are many cases which have been reported in the news which highlight the importance of a clean break, where divorcing couples had no assets on divorce, but would later be required to make payments to their former spouses. Two examples are as follows:-
- Nigel Page won £56 million in the EuroMillions 10 years after he divorced. His former wife successfully obtained a settlement of £2 million.
- In 2015, 20 years after their divorce, Kathleen Wyatt successfully argued that she was entitled to maintenance from her ex-husband. During the 20 years they had been divorced, he had built up a hugely successful business and had accumulated vast wealth. His ex-wife received an undisclosed sum from this post-divorce wealth.
If the Court had made a clean break Consent Order as part of their divorces, then these claims would not have been possible, and their post-divorce wealth would have been protected.
These are exceptional cases, which is why they were reported, however there are many cases where a party receives an inheritance post-divorce. Without a clean break, their ex-spouse would be able to make a claim against this inheritance.
It is therefore important to consider whether a clean break Consent Order is right for you, and to be aware of the risks of concluding the divorce without addressing financial matters.
If you would like advice about whether a clean break Consent Order is right for you, please contact a member of our Divorce and Finance Team who can assist.