What is ancillary relief?
Ancillary relief proceedings are the proceedings relating to financial matters upon divorce or dissolution. It is the legal term for saying “Financial Settlement”. They are called Ancillary Relief proceedings as they are “ancillary” to the divorce or dissolution and are viewed as supplementary or supporting the proceedings.
Today, the more common name is Financial Remedy Proceedings.
A financial settlement is separate from the divorce process but may run alongside each other. The process of getting a divorce or dissolution is separate from the process of dividing assets following the breakdown of your relationship. It is really important to understand that proceedings for divorce or dissolution DO NOT automatically deal with a couple’s finances.
A good way to view financial settlement is as shown in the image below as 2 separate sets of proceedings.
The purpose of Financial Remedy Proceedings is to divide the matrimonial assets following a breakdown of a marriage or civil partnership according to the needs and requirements of the couple. To divide your finances, you need a Financial Remedy Order in addition to your divorce Final Order. Many couples are able to reach an agreement on how to divide their finances during the proceedings for divorce (either by themselves, or with the help of a third party).
A financial settlement can be achieved several ways such as:
- Reaching an agreement directly with your spouse or partner.
- Negotiation and agreement using a method of non-court dispute resolution.
- As a last resort you could make an application to the Court for a Financial Remedy Order.
A financial settlement (agreement) can be drawn up at any point during divorce proceedings or civil partnership dissolution.
Do divorce proceedings automatically deal with financial matters?
A Final Order in divorce ONLY brings a marriage to an end. It does not deal with financial matters. Financial matters must be dealt with separately.
Is there a time limit for dealing with financial matters following divorce or dissolution?
There is no time limit set in law when it comes to making financial claims following divorce or dissolution, and only a Court can dismiss them. In the 2023 reported case of HAT v LAT, the former wife was allowed to pursue her financial claims 29 years after the marriage had ended.
Even where a couple have divorced many years earlier, if they have not had their financial claims dealt with by the Court either by way of an agreed Consent Order or a Court imposed Financial Remedy Order, they will still be able to bring claims at any time in the future, as long as they have not re-married.
Can I get divorced without dealing with financial matters?
It is possible to finalise your divorce, and then deal with the division of finances afterwards, or not at all.
However, we would always recommend that it is better to complete your financial arrangements before receiving the Final Order which ends your marriage or civil partnership, or very soon after.
Without a Court approved Financial Remedy Order, either party can make a financial application against the other at any time after divorce as long as they have not remarried. There is no time limit.
Who can apply for a financial settlement?
Either party to the divorce or dissolution of a civil partnership can apply for a financial remedy.
How do we make our financial agreement legally binding?
To make an agreement legally binding, you need to include the terms of the financial agreement into a formal legal document called a Consent Order. The Consent Order is then sent to the Court dealing with the divorce or dissolution. Once the Consent Order is reviewed and approved by a Judge, the agreement will become legally binding and enforceable in law.
A Judge will only approve a financial agreement if they consider it fair. If the Judge finds the agreement unfair, they may request changes or further explanations.
What is a Consent Order
A Consent Order is an Order made by a Judge at the request of both parties to a marriage/civil partnership, to confirm a financial agreement they have reached between them.
A clean break financial order is the simplest type of Consent Order that will cut any financial ties between you and your ex-spouse now and in the future. It is ideal for cases where currently there are no assets, property or debts, and the couple want certainty for the future by knowing all financial matters have been dealt with.
Essentially all the financial aspects of the financial agreement you have reached can be included in a Consent Order. These include:
- your home – whether it will be sold or transferred to one of you, and how the proceeds will be divided;
- how other assets such as savings, investments or business interests will be dealt with;
- what will happen to personal possessions such as furniture;
- how any pension schemes will be shared;
- child maintenance for any children;
- whether one of you will pay maintenance to the other, and for how long;
- any other expenses – for example, if one of you will continue to pay for life insurance or private healthcare;
- how any outstanding debts will be dealt with;
- an agreement that neither of you can make a claim as a financial dependent when the other dies.
What is the difference between a Consent order and a clean break order?
A Consent Order and a Clean Break Order are both legal documents approved by a court to finalise financial arrangements following divorce or dissolution. While they share some similarities, they serve distinct purposes:
A Consent Order is an agreement reached by the parties and covers a wide range of financial arrangements, including ongoing financial commitments like spousal maintenance.
A Clean Break Order specifically aims to end all financial ties between the parties, and eliminates the possibility of future financial claims.
A Consent Order may or may not include a clean break element. A Consent Order with a clean break element is called a Clean break Consent Order.
Is a Consent Order in divorce final?
A Consent Order is final once approved by a Judge and sealed by the Court. Once this happens it becomes legally binding and enforceable.
Once approved, a Consent Order can only be challenged or modified in limited circumstances.
It is highly recommended to obtain a sealed Consent Order before the Final Order in divorce is pronounced.
Can you reopen a Consent order once approved?
As consent orders are meant to provide certainty and closure, it is normally very difficult to reopen or change a consent order once it has been approved by a judge.
A consent order may possibly be reopened in the following limited and exceptional circumstances:
If there has been a significant change in circumstances soon after the consent order was made. These could include receipt of an inheritance, the death of one party, or a remarriage and a concealed intention to remarry.
If there has been fraud or failure to provide full financial disclosure.
If one party was forced to enter into the consent order, or had a fundamental misunderstanding when entering the same.
What does the Court take into account when deciding financial matters following divorce or dissolution?
In deciding financial matters, a Judge will base their decision on a number of different common sense factors which are contained in Section 25 of the Matrimonial Causes Act 1973 and include:
- how long you have been married or in a civil partnership
- your ages
- your ability to earn
- your living expenses
- the standard of living you enjoyed during your relationship
- your financial needs and responsibilities
- the available assets
- any health conditions or disabilities
- The contributions each party has made or is likely to make in the foreseeable future to the welfare of the family, such as looking after the home or caring for the family.
A Judge will decide on the fairest way to divide the assets if there is enough to meet everyone’s needs. They will make arrangements for any children first – especially their housing arrangements and child maintenance. Wherever possible a Judge will try to arrange a clean break between you, so you no longer have any financial ties to one another.
In the case of a financial agreement contained in a Consent Order, the process for considering whether the divorce financial settlement is fair is the same as if there was a full formal hearing to decide the finances upon divorce or dissolution.
Can a Judge refuse to approve a financial Consent Order?
If a Judge considers the terms of a financial agreement unfair to either party; they can refuse to approve the Order. A Judge will not simply “rubber stamp” a Consent Order. Their role is the administration of justice.
Can my ex wife claim on my inheritance after divorce?
If you do not have a final financial order in place (such as a clean break Order), then yes she can claim. For peace of mind following a divorce or dissolution you should always resolve financial matters even if it is only to obtain a Clean Break Consent Order.
What is the remarriage trap?
The remarriage trap is where a party to a marriage or civil partnership remarries without having resolved financial matters from their previous relationship. Upon their new marriage, they are barred from making any financial claims against their former spouse.