The most successful blog that I have ever written (in terms of clicks) was one entitled “How much does a letter cost?”. It is a question that many people who contact me ask. Regrettably the answer is often “More than you expect”.
Many of those potential clients are enquiring about how much it costs to write to their ex setting out their position in relation to financial issues in a divorce or about arrangements for their children. However, often people need a lot more than just a letter.
One area where a letter simply will not suffice is in relation to financial issues in divorce. Many non-lawyers think that in order to formalise a financial agreement between a husband and wife, all they need is a solicitor’s letter recording the terms of the agreement. However, in those circumstances, a letter is usually little more than just a letter.
For a financial agreement to be legally binding in a divorce, there needs to be a financial consent order made by the court. The order will set out precisely what has been agreed in a workable and enforceable way. A mere letter cannot be enforced through the court and is probably not legally binding (arguments about whether there is a legally binding concluded agreement merely because of an exchange of correspondence can be very complex – and expensive).
If the financial deal contains an agreement that a pension will be shared or earmarked, this can only be implemented if there is a financial order in place. There has to be a pension sharing order or pension attachment order included in the financial order; without an order, it is impossible to split or earmark the pension.
Most importantly, a financial order will usually contain some type of clean break order. Almost all financial orders contain a capital clean break order preventing the parties from making any further claims against each other’s assets (including pensions). If it is agreed that no spousal maintenance will be paid, there also needs to be an income clean break order, whether that is one which comes into force immediately or when the term of a spousal maintenance order (known as a periodical payments order) comes to an end. There will also need to then be a clean break for the purposes of the Inheritance (Provision for Family and Dependants) Act 1975, which will prevent the parties from challenging each other’s wills in the future. (This is sometimes also known as a clean break after death). Not so very long ago, such inheritance clean break orders used to contain the words “the court considering it just so to order.” This rather quaint additional wording was quietly abandoned when it was pointed out that the court considers all orders that it makes to be just.
In this day and age, with the divorce process now taking place online and with the imminent arrival in April 2022 of no-fault divorce, it is not unusual for parties who are divorcing to represent themselves in relation to the divorce proceedings. However, simply obtaining the decree absolute in a divorce (soon to be renamed a final divorce order) will not have the effect of creating a clean break automatically. The parties need to seek a financial consent order from the court containing a clean break. There are a huge number of people who have managed to reach a financial agreement direct with their spouse when they divorce, but who do not realise that they need to obtain a financial consent order from the court that reflects that agreement. They often sign crudely drawn up amateurish letters or agreements setting out the terms of their agreement and are dismayed to learn that those documents are in no way legally binding or enforceable.
Drawing up a financial consent order is an extremely technical process. Realistically, very few non-lawyers would be able to manage it and most people would need to use a solicitor to draft the financial consent order and a supporting brief financial statement, which can then be submitted to the court. The judge will consider the order without the need for any kind of hearing in most cases. The court will not simply rubberstamp the draft order; the judge will consider whether or not the terms of the agreement in the order achieve an appropriate balance between achieving fairness and meeting everyone’s needs, especially the needs of any minor children.
People understandably reluctant to incur legal fees where they feel that matters are agreed and there is no need for the formality of obtaining a financial order. However, without a financial order, they are at risk of further financial claims being made which would be significantly more expensive than the relatively modest cost of instructing a solicitor to obtain financial consent order from the court.
If you would like to arrange a consultation, please telephone (01206) 848426 or click here.
10 October 2021