Clean Break Orders Explained
08 March 2016
For initial legal advice on getting a Clean Break Order call our Divorce Solicitors on 03306069626 or contact us online and we will help you.
A Clean Break Order is used following a divorce and essentially means that each person's financial affairs are completely severed from each other. Without a Clean Break Order or a Consent Order from the Court, your ex-spouse could make a financial claim against you at any time in the future.
How Much Does a Clean Break Order Cost? £600 (including VAT) if your financial situation is not complicated. In addition to our fixed fee, there is a Court fee of £50 which has to be paid to the Court.
Often times, couples are trying to keep the cost of their divorce to a minimum and think that putting a clean break financial order in place is just an unnecessary waste of time and money, but there can be consequences to this.
One high profile case reported in the media was a £2 million pay-out by Nigel Page to his ex-wife, who he divorced 10 years earlier. At the time of their divorce, Mr Page was not wealthy (in comparison to his later financial status) so he did not think it necessary to put a Clean Break Order in place. However, Mr Page won £56 million on the Lottery and ended up making an out of Court settlement with his ex-wife for £2 million.
Multi-millionaire wind farm owner Dale Vince's wife won her case at the Supreme Court to access a percentage of her ex-husband's £100 million fortune more than 30 years after their divorce because no Clean Break Order was put in place. At the time, Mr Vince was a new age traveller with no money and therefore offered no financial support for his ex-wife and child when they split. His ex-wife's claim, supported by the ruling from the Supreme Court, says that she requires financial support under the Matrimonial Causes Act 1973.
Whilst these are two extreme examples of the impact of not implementing a Clean Break Order for high net worth individuals, this clearly demonstrates the need for getting legal advice from a specialist Divorce Solicitor or the implications can continue for some time afterwards.
Clean Break Orders are put in place when all aspects of financial attachments that were made during the marriage can be separated. This includes all property, maintenance payments, pension payments and other financial responsibilities left after a marriage ends.
There are a number of ways to ensure that a Clean Break Order can be achieved after a divorce. Many of the older ways of settling matrimonial finances did not have this in place – for example when splitting a pension, pension earmarking was often used. This is where a portion of the ex-spouse pension is kept aside and can be used on your ex-spouse retires. Amongst other drawbacks to this method of pension settlement is the inability to achieve a clean financial break from each other. This is one of the reasons that other options such as pension offsetting or pension sharing are used more regularly now.
Where there is a requirement for spousal maintenance, this poses a problem when trying to implement a clean break, however the family Courts have been following through with the drive to achieve a clean break by implementing fixed term spousal payments. This does help to remove the ability for an ex-spouse to have access to financial benefits for life.
The Court also looks differently at short marriages and long marriages – for the purposes of a clean break, the Court may consider a short marriage to be one where you did not live together for a period before your marriage and one where you have spent less than five years together. For your marriage to be considered long, you will have lived together for some time before your marriage and you will also have been married for more than five years.
It may be easier, in what is deemed to be a short marriage, to allow each party to leave the marriage with what they came into it with and therefore achieve a relatively easy Clean Break Order. In order to put this in place, you will need to gather all financial records together outlining your assets when you came into the marriage to assist in the Clean Break Order. You must also sign an agreement that you forego any entitlement to your ex-spouse's pension and them to yours.
But what happens if you cannot achieve a clean break settlement? Since the economic crisis, there has been a dip in the number of divorces achieving a clean break due to the financial constraints. In addition, with the upward trend of silver splitters (people over 55 getting divorced) Clean Break Orders are unlikely to be implemented in these circumstances.
Even if you cannot obtain a clean break settlement straight away as a result of your ex-spouse being unable to work due to caring for the children and you are paying spousal maintenance, you should discuss fixed term payments with your Divorce Solicitor and structure the maintenance so that it will eventually come to an end once they no longer have to provide care to the children.
You are more at risk from the repercussions of not implementing a Clean Break Order if your ex-spouse does not remarry. In these circumstances, you could still face a claim under the Matrimonial Causes Act 1973.
There is no doubt that divorce is complicated; the emotional aspects of the break up of a marriage alongside the financial pressures and worries can be overwhelming. Getting expert legal advice from a Divorce Solicitor can really help you to be clear about where you stand and to feel more in control of the situation.
To find out more about how a Clean Break Order works and how it could apply in your case, call our Divorce Solicitors on 03306069626 or contact us online and we will call you.