Divorce or dissolution financial consent order: Your complete guide

Divorce or dissolution of a civil partnership is rarely straightforward. Beyond the emotional strain, the financial implications can be profound and far-reaching. This is where a financial consent order becomes invaluable. It’s a legally binding document that ensures both parties adhere to agreed financial terms, safeguarding assets and preventing future disputes. But what exactly is a financial consent order, and why is it so crucial? Let’s break it down.

What is a financial consent order?

A financial consent order is a legal document that formalises the financial agreement between divorcing spouses or those dissolving a civil partnership. It outlines how assets, income, and debts will be divided and ensures that both parties understand their financial obligations moving forward. The court must approve this document to give it legal standing.

Why you need a financial consent order

Without a consent order, your ex-partner could make financial claims against you years after the divorce or dissolution. This could involve assets you acquire post-divorce or dissolution, such as inheritance or lottery winnings. A consent order provides an end to the financial claims each person has, giving you peace of mind that your financial affairs are settled.

Different types of financial consent orders

When navigating the financial aspects of divorce or dissolution, it’s essential to understand the different types of financial consent orders available. Each type addresses specific financial matters and ensures that the settlement is comprehensive and legally binding. Here are the primary types of financial consent orders:

Clean break order

A clean break order is designed to sever all financial ties between the divorcing parties or those dissolving their civil partnership, meaning that after the order is approved, neither party can make any future financial claims against the other. This type of order is ideal for couples who want to achieve complete financial independence from each other post-divorce or dissolution. It usually applies when there are no ongoing financial commitments, such as spousal maintenance.

Periodical payments order

Also known as a maintenance order, this type of consent order mandates regular payments from one party to the other. These payments can be spousal maintenance or child maintenance and are typically set for a defined period or until specific conditions are met, such as the receiving party remarrying or the children reaching adulthood. Periodical payments orders ensure that the financial needs of the lower-earning partner or the children are met over time.

Lump sum order

A lump sum order requires one party to pay a specific amount of money to the other, either as a one-off payment or in several instalments. This type of order is often used to settle financial obligations without the need for ongoing payments. It can be beneficial for the receiving party as it provides immediate financial support, allowing them to make significant purchases, for example a property, or investments.

Property adjustment order

A property adjustment order deals with the transfer or sale of property owned by the parties. This can include the family home, investment properties, or other real estate assets. The order specifies how the property is to be divided, whether through sale and division of proceeds, transfer of ownership to one party, or other arrangements. This ensures that property matters are resolved efficiently taking into account any tax or costs that may be involved in selling or transferring properties that are not the former family home.

Pension sharing order

A pension sharing order is used to divide pension assets between the divorcing parties or those dissolving their civil partnership. Given that pensions can be substantial assets, this type of order ensures that both parties receive a fair share of pension benefits, contributing to their financial security in retirement and ensuring they will have an income. The order involves splitting existing pension funds.

Understanding the different types of financial consent orders is crucial for achieving a fair and comprehensive financial settlement in divorce or dissolution. Each type serves a specific purpose, addressing various financial aspects and ensuring that both parties can move forward with clarity and financial security. A specialist family lawyer will ensure the appropriate consent order is drafted, ensuring that your financial interests are protected and that the settlement is tailored to your unique circumstances.

Components of a financial consent order

A comprehensive financial consent order encompasses various critical aspects, ensuring both parties reach a fair and legally binding agreement that meets the needs of both parties. Here’s a detailed look at the primary components:

Division of assets

The division of assets includes all jointly and individually owned properties, such as the family home, savings accounts, investments, and personal possessions.

Maintenance payments

Maintenance payments, commonly known as spousal support, are designed to provide financial assistance from one party to the other. This is particularly important if there is a significant income disparity between the parties. Maintenance payments are usually temporary until a specific event occurs or for a specified time, to provide support immediately after a divorce or dissolution and allowing breathing space for one party to increase their income. , They ensure that the lower-earning partner can maintain a standard of living comparable to that experienced during the marriage.

Pension sharing

Pensions often represent one of the most substantial assets in a marriage or civil partnership. The consent order will specify how pensions are to be divided, ensuring both parties have a secure financial future. This division can be complex, involving the splitting of pension funds and the  goal is to achieve a fair distribution that considers the retirement needs of both individuals.

Debts and liabilities

Addressing joint debts and liabilities, such as mortgages, loans, and credit card debts, is crucial to prevent future financial disputes. The consent order will outline how these debts are to be managed and divided. This might include selling joint property to pay off debts or one party taking over the liability and having it transferred directly to them.

Additional considerations

While the above components form the core of a financial consent order, there are additional factors that might need to be addressed depending on the specific circumstances of the divorce or dissolution:

Business interests

If either party owns a business, there needs to be consideration as to  how business interests are to be handled. This might include the valuation and division of business assets or agreements on future business operations, or it may be the business remains with the party who owns it, and the other party receives a higher proportion of other assets.

Health and special needs

If either party has health issues or special needs, or if any children of the family do, the consent order can reflect these considerations, ensuring appropriate financial support and accommodations are made.

By addressing these comprehensive components, a financial consent order provides a clear, legally binding framework that facilitates a fair and amicable financial settlement, meeting the needs of both parties and allowing them  to move forward with confidence and financial security.

The legal process for obtaining a consent order

Navigating the legal process for obtaining a financial consent order is crucial to ensuring a fair and binding financial settlement post-divorce or dissolution. Here’s a detailed look at each step involved in this process:

Agreement between parties

The first step in obtaining a consent order is for both parties to agree on the financial settlement. This agreement can be reached through direct negotiations or, if necessary, with the help of mediation, arbitration or collaborative law. Mediation provides a neutral environment where a trained mediator assists both parties in discussing their financial arrangements and reaching a mutually acceptable agreement. This step is critical, as the consent order can only be drafted once an agreement has been reached.

Drafting the order

Once an agreement is reached, the next step is drafting the consent order. A solicitor will ensure the order meets all legal standards and accurately reflects the agreed terms. The solicitor’s expertise is invaluable in avoiding common pitfalls and ensuring that all aspects of the financial settlement are clearly and comprehensively detailed. This includes the division of assets, maintenance payments, pension sharing, and any debts and liabilities.

Submission to the court

After the consent order is drafted, it must be submitted to the court for approval. This submission includes the consent order itself and a D81 statement of information form together with any other necessary documents. The D81 form provides the court with detailed information about both parties’ financial circumstances, ensuring that the judge has a complete picture when reviewing the order. Along with these documents, a court fee is required.

Court approval

The final step in the process is obtaining the court’s approval. The court will review the consent order to ensure that it is fair and reasonable to both parties alongside meeting their needs. This involves scrutinising the financial information provided. If the court is satisfied, the judge will grant approval, making the consent order legally binding. If the court has concerns about the fairness of the order, it may request further information.

By understanding and carefully following these steps, both parties can secure a fair and legally binding financial consent order, ensuring financial clarity and stability as they move forward post-divorce or dissolution.

Drafting a financial consent order

Creating a financial consent order requires careful attention to detail and legal expertise to ensure it accurately reflects the agreement between the parties and complies with legal standards. Here’s an enhanced guide to drafting a financial consent order, with additional steps and considerations:

Hiring a solicitor

A solicitor brings legal expertise, ensuring the consent order is comprehensive, watertight, and compliant with all relevant legal standards. Their knowledge can help prevent potential issues that could lead to court rejection or future disputes. A solicitor also provides guidance on legal rights and obligations, ensuring both parties understand the implications of the agreement.

Initial consultation and information gathering

The process begins with an initial consultation with the solicitor, and later full and frank disclosure will be required to understand the financial landscape. This includes disclosure relating to assets, income, liabilities, and future financial needs. Accurate and thorough information is crucial for allowing negotiations to take place.

Drafting the order

The solicitor drafts the consent order based on the agreed terms. This involves outlining the division of assets, such as the family home, savings, investments, and personal possessions. It also includes detailing maintenance payments (spousal support), pension sharing arrangements, and the handling of debts and liabilities. The draft must be clear, precise, and free from ambiguities to avoid any misunderstandings or disputes.

Key elements to include

When drafting a financial consent order, ensure the following elements are comprehensively covered:

• Division of assets: Clearly specify how properties, savings, investments, and personal possessions are to be divided.
• Maintenance payments: Outline any spousal support arrangements, including the amount and duration of payments.
• Pension sharing: Detail how pension assets are to be divided or shared.
• Debts and liabilities: Address the responsibility for any joint debts, such as mortgages, loans, and credit card balances.
• Child maintenance (if applicable): Include provisions for child maintenance to ensure the children’s financial needs are met.

Review and revisions

Both parties should review the draft consent order carefully. This step ensures that all details are accurate and that both parties fully understand and agree to the terms. Any discrepancies or concerns should be addressed and resolved with a specialist family solicitor before finalising and signing the document.

Common pitfalls to avoid

Avoiding common pitfalls can ensure the consent order is robust and legally sound:

• Vague terms: Ensure all terms and conditions are explicitly stated and clearly defined. Ambiguities can lead to disputes and potential rejection by the court.
• Incomplete information: Provide comprehensive details of all financial aspects. Omissions can result in an unfair agreement and legal challenges, or a judge requesting further information before they will consider approving the draft order.
• Lack of legal advice: Skipping professional legal advice can lead to errors and a lack of legal protection. Always consult with a qualified family solicitor.

Finalising the order

Once both parties are satisfied with the draft, the solicitor finalises the consent order. This includes ensuring all necessary documentation is complete and that the order is ready for submission to the court.

The solicitor will also prepare the D81 statement of information form, which provides the court with a detailed overview of the financial circumstances and the agreement reached.

Submitting the Consent Order to Court

Once the financial consent order is drafted and agreed upon, the next critical step is submitting it to the court for approval. This process involves several key components and requirements to ensure that the order is accepted and legally binding.

Required documentation

To submit the consent order to the court, you will need to provide the following documentation:

• Consent order: The finalised document outlining the agreed financial settlement between both parties.
• D81 statement of information form: This form details the financial circumstances of both parties, including assets, income and liabilities.
• A copy of the conditional order
• Any other relevant documents, for example a pension sharing annex

Ensure that all documents are accurately completed and include all necessary details to prevent any delays in the approval process.

Court fees

A court fee is required when submitting the consent order and your solicitor can confirm this fee for you.

Submission process

The submission process typically involves the following steps:

1. Preparation: Ensure that all required documents, including the consent order and D81 form, are complete and accurate.
2. Submission: Submit the documents online.
3. Fee payment: Pay the required court fee.

Timeline for approval

The timeline for court approval can vary, and it can take a week or it can take several weeks to review and approve a consent order. The exact duration depends on several factors, including the complexity of the financial arrangements and the court’s workload.

Court review and approval

During the review process, a judge will examine the consent order and the D81 form, along with any other documents submitted, to ensure that the agreement is fair and reasonable for both parties, as well as meeting their needs. The judge’s considerations include:

• Equity: Ensuring that the division of assets and financial arrangements are equitable.
• Adequacy of information: Verifying that all relevant financial information has been disclosed.
• Protection of interests: Considering the needs and interests of both parties, including any dependent children.

If the judge is satisfied that the consent order is fair and meets the needs of the parties, they will grant approval, making the order legally binding. If there are concerns or if the order appears unfair, the judge may request additional information.

What Happens if the Court Rejects the Consent Order?

Common Reasons for Rejection

The court may reject an order if it deems the agreement unfair, it does not meet the parties needs or if there’s insufficient information about financial circumstances.

Next Steps and Revisions

You may need to provide additional information or revise the terms of the agreement. Consulting with a solicitor can help navigate this process.

Enforcing a financial consent order

Ensuring compliance with a financial consent order is crucial to maintaining financial stability and fairness post-divorce or dissolution. Here’s how enforcement works and the potential consequences of non-compliance.

Legal mechanisms for enforcement

If one party fails to comply with the terms of a financial consent order, legal action can be taken to enforce it. This typically involves the following steps:

Application to the court

An application to the court for enforcement measures is made. This application requires demonstrating that the other party has failed to adhere to the agreed terms. The court has various enforcement tools at its disposal, including:

• Attachment of earnings order: This directs the non-compliant party’s employer to deduct the owed amount directly from their salary.
• Charging order: This secures the debt against the non-compliant party’s property, such as their home.
• Third-party debt order: This freezes the debtor’s bank account and allows the owed money to be paid directly to the aggrieved party.
• Signing: a judge can sign documentation to facilitate the implementation of a sealed consent order.
• Order for sale: an order to sell a property can be made.

It is important to consult a family lawyer to understand the options available is one person fails to comply with the sealed financial consent order.

Consequences of non-compliance

Non-compliance of a financial consent order can result in significant penalties, highlighting the importance of adhering to the agreed terms. Consequences may include

• the non-compliant party being ordered to pay the legal costs incurred as a result of pursuing enforcement.

Variations and changes to consent orders

Life circumstances can change, necessitating modifications to the original financial consent order. Understanding when and how to seek a variation is essential.

Circumstances for variation

Certain changes in financial or personal circumstances may warrant a variation of the consent order. A common is job loss resulting in A significant reduction in income due to unemployment, which can justify a modification of maintenance payments.

Process for modifying the order

To modify a financial consent order, the following steps are typically involved:

Application to the court

The party seeking the variation must apply to the court, providing evidence of the changed circumstances. This application should detail why the variation is necessary and how the new circumstances impact the original agreement.

Court assessment

The court will assess the application, which will including attendance at a court hearing and they will consider the evidence provided and the fairness of the proposed changes. The court aims to ensure that any variation remains equitable and reasonable for both parties.

Approval and implementation

If the court approves the variation, the consent order is amended accordingly. Both parties must adhere to the modified terms, and failure to comply can lead to enforcement actions as described earlier.

How our solicitors can help

A financial consent order is a crucial element in the divorce or dissolution process, providing both clarity and legal security for both parties. By comprehensively understanding the process and the key components involved, you can ensure a fair and legally binding financial settlement. This not only protects your current interests but also safeguards your future financial stability, allowing both parties to move forward with confidence and peace of mind.

If you need expert assistance in drafting or enforcing a financial consent order, or if you have any questions about the process, Moore Barlow solicitors are here to help. Our experienced legal team specialises in family law and can guide you through every step, ensuring that your financial interests are protected.

Our dedicated team is ready to assist you with compassionate and expert legal advice. Reach out to us now to take the first step towards a fair financial resolution.