When you get married, you become financially tied to your partner. If you divorce your partner, it might surprise you to learn that this doesn’t automatically end your financial relationship with them.
A ‘clean break’ usually refers to a type of order that the court can make following a divorce, to sever any financial ties between you both.
In this blog, we’ll explain why you might want to consider a clean break, and how you can go about getting one.
What is a ‘financial separation’?
A divorce legally ends your marriage and there are several stages that you must go through in order for your divorce to be finalised and legal. It’s the same process for dissolving civil partnerships, so all references to divorce below, apply equally to dissolutions. You can read about how to get divorced here.
If you have finances to divide, such as any money, property, savings, pensions etc. you can agree on these arrangements in your financial settlement.
As explained above, a divorce on its own doesn’t separate you financially. The divorce process is completely separate from the process of making your financial settlement legally binding through the court.
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How does a ‘financial separation’ become ‘legally binding’?
If you both agree you can have your financial separation, and your financial arrangements made legally binding through a consent order. This is sent to the Family Court to be reviewed by a Judge and is legally binding once approved and sealed. It’s called a consent order because you’ve both consented (agreed) to it.
What’s the difference between a clean break order and a consent order?
This is a bit of a trick question because ‘clean break order’ or ‘clean break consent order’ is the term used rather than a different document. Normally a consent order will include a ‘clean break clause’, this severs financial ties and ends future claims. However, a clean break clause isn’t always possible in a consent order, if for example, there’s ongoing spousal maintenance.
The consent order document outlines any declarations, undertakings and orders and how your assets and debts are to be divided following your divorce. The document will usually include a final order dismissing any future claims against each other (this is the clean break clause).
These can be broken down into two main types of:
- A full consent order: where you tell the court what will happen to your financial arrangements and this will usually contain a clean break clause. A clean break consent order: where there are no transactions taking place. A couple is asking a Judge to grant a ‘clean break’.
It’s important to note that formalising your financial arrangements or getting a clean break is optional and both require full financial disclosure of all assets and debts including future pension entitlements regardless of whether they are part of your final agreement.
The court needs to make sure that it’s a fair agreement and for them to do this - they need to see what you both have, even if you don’t have any assets.
What is a full consent order?
A full consent order tells the court what ‘financial transactions’ will happen following your divorce—for example, the sale of your home, sharing your pension or spousal maintenance.
A full consent order is not necessarily a ‘clean break’. It may include a deferred clean break for example, when a clean break will happen only after a certain event takes place such as children finishing school or attaining a certain age or after the sale of a property, say in five years' time.
What is a clean break order?
A clean break order is a type of consent order where there is only a clean break, rather than any transactions taking place. Each of you keeps what you have, and all financial ties, present and future are severed following the final order.
Legally speaking, the normal starting point is a 50:50 split of all assets, so if one of you is left with more than the other, you might need to explain why in the consent order.
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Benefits of a clean break order when you don’t have any assets
Importantly, even if you don’t have any assets when you separate, a clean break order will make sure that your ex can’t claim against you in the future. Without a clean break, in theory, your ex could make a claim on any income, bonuses, or post-divorce assets such as future pensions, windfalls or inheritances.
For example, if you divorced ten years ago, and at the time had no assets to divide and didn’t get a clean break order. If you then won the lottery, your ex could make a claim against you.
The key difference between a clean break order and a full consent order are;
- A full consent order outlines to the court how your assets and debts will or have been divided and records those transactions as already having occurred or to take place within a certain timeframe after your final order for divorce.
- A clean break consent order records that you will each keep what you own, there are no transactions to take place and there is no ability to make a claim against each other in the future.