Why the divorce and financial settlement are separate
When people talk about ending a marriage or civil partnership, it is common to hear the phrase ‘getting a divorce’ used as an all-inclusive umbrella term that also covers the financial settlement. It is also a common assumption that once the final divorce order is granted, everything else, including who gets the house, how the savings are split, and what happens to the pensions, is automatically sorted out.
‘However, these are misconceptions because, in English family law, the legal process of dissolving the marriage or civil partnership is entirely separate from the process of dividing your matrimonial assets,’ explains Gemma Moore an Associate Solicitor in the family law team with HRS Family Law Solicitors. ‘Understanding why these two paths are separate, when and how they need to meet, and why you must address both, is crucial to protecting your future financial stability.’
Gemma Moore outlines the different legal processes and highlights the key considerations.
Separate legal processes
The law treats your marital status and your marital wealth as two entirely distinct issues requiring different legal solutions.
Ending your marriage or civil partnership
The divorce or dissolution: This is a purely administrative process and its only function is to change your legal status from married to single.
The court is only interested in whether the marriage has broken down irretrievably. Under the current ‘no-fault’ divorce system, this process is largely paperless. It takes a minimum of 26 weeks, and does not look at what you own or owe.
The key document that ends your marriage is the a ‘final order of divorce’ but this does not change anything about the matrimonial finances.
Obtaining a final order of divorce or dissolution of your civil partnership does not end your ex-spouse’s right to claim against your money and assets, and so does not automatically cut any of your financial ties to one another.
Formalising the financial settlement
This is a separate legal process which deals with the division of your assets, liabilities, income, and pensions.
It operates under different legal rules (primarily the Matrimonial Causes Act 1973 or Civil Partnership Act 2004), which guide how the courts assess what is fair, what both of you need to live on, and how any dependent children must be housed and supported.
Timing will depend on how quickly and easily agreement can be reached. The key document confirming the details of your final settlement is a court-approved ‘financial remedy order’.
Ongoing financial ties
The key point is that if you never obtain a court-approved financial order, your ex-partner can still make a claim against your assets 5, 10, or even 20 years down the line. If you build a successful business, receive an inheritance, or even win the lottery years after your divorce, those new assets could still be at risk.
Generally, financial claims arising from your marriage remain active indefinitely unless they are specifically dismissed by a judge.
To permanently extinguish financial ties and claims you must obtain a legally binding financial remedy order from the court, whether by agreement or through a judge deciding the settlement terms for you.
Wherever possible, the court will prefer that your settlement breaks all financial ties with your ex; this is called a ‘clean break order’. However, there are often cases where this is not possible for various reasons; such as there being very young children requiring one parent to stay out of work, with the other parent paying them spousal maintenance for a period of time.
How the two processes connect
While they run on separate tracks, the divorce or dissolution and the financial settlement must eventually meet.
Even if you are both in agreement, you cannot get a final, legally binding financial remedy order resolving the matrimonial finances until you have reached the midway stage of the divorce process, called the conditional order (formerly known as the decree nisi).
Once the court grants your conditional order, a judge has the legal power to approve and seal your financial agreement. This means you will often run both applications alongside each other: initiating the divorce to open the court’s gateway, negotiating your financial split in the background, and then submitting your financial agreement to the court as soon as the conditional order is secured.
From the outset, we will explain the likely timeline for you, so that you can plan when to start the divorce and when to open up negotiations on the finances.
However, it often takes some couples longer to negotiate the finances and it sometimes has to be decided by a judge at a court hearing.
Understanding the risks
As the two paths are separate, it is technically possible to legally end a marriage or civil partnership before you have settled your finances. However, doing so can carry big financial risks and should be an informed decision.
Once you are legally divorced or dissolved, you will lose valuable spouse-status benefits. For example, if your ex-spouse passes away before your financial settlement is approved by the court, you may lose your right to inherit under their will, lose automatic rights to occupy the family home, or lose entitlement to valuable widow’s pension benefits.
To avoid these traps, it is important to seek specialist family law advice to ascertain whether your particular circumstances warrant a delay in applying for the final order of divorce, until the financial remedy order has been formally approved and sealed by the court.
How we can help
Although the divorce and financial settlement each have their own course, it is clear to see how they must be considered together and planned accordingly.
Our experienced family law team is here to help you detangle your finances safely and strategically. We will guide you through every step of the process, from filing your initial divorce application to negotiating a fair asset split and drafting a financial remedy order.
For further information, please contact Gemma Moore in the family law team on 01922 241 585 or email gm@hrsfamilylawsolicitors.com. HRS Family Law Solicitors has 20 offices nationwide.
This article is for general information only and does not constitute legal or professional advice. Please note that the law may have changed since this article was published.
