Clean break order in divorce – what is it and why is it important?

Stefan Donnelly explains what a clean break divorce is and why it is important from a financial perspective.

A very common misconception is that once a marriage has legally ended, (that is to say that the Final Order has been pronounced by the court), your financial ties to your spouse cease without you needing to do anything further. This is not the case, and it can potentially have huge ramifications further down the line.

The only way that an individual can sever all financial ties from their spouse, and therefore protect themselves from any further financial claims in the future, is to obtain what is referred to as ‘a clean break order’.

What is a clean break order?

A clean break order is a type of financial order that is issued following a divorce. As the name suggests, it provides a ‘clean break’ between you and your ex-spouse. More specifically, it provides a clean break in terms of your finances. It therefore enables both parties to move forward and to be financially independent of one another.

This will be particularly important if you anticipate receiving a large inheritance payment, or are thinking of starting your own business. It will also be relevant if you have the possibility of earning significantly more income in the future (for example through a promotion at work).

Why is a clean break order important?

If you do not obtain a clean break order, then your ex-spouse is permitted to make further financial claims against you at any point in the future (either for capital, income or both). This is regardless of whether you have been divorced for one year or twenty years.

There are a number of legal cases that highlight the importance of obtaining a clean break order. One example is the case of Nigel Page who won £56 million in the Euro Millions Lottery ten years after he had divorced.  At the time of his divorce he had relatively modest assets and did not obtain a clean break order.  His former wife then brought a financial claim against him following his lottery win, and negotiated a reported settlement of approximately £2 million. 

Another example is the case of Dale Vance. In 2015, Mr Vance’s ex-spouse successfully argued that she was entitled to apply for spousal maintenance from him even though they had been divorced for over 20 years. Mr Vance had not obtained a clean break order at the time of the divorce, leaving the door open for his ex-spouse to bring a financial claim further down the line. By the time she did so, Mr Vance had built up a hugely successful business and had accumulated vast wealth. 

It is important to stress that if the parties’ have children, a clean break order does not mean that the ‘absent parent’ escapes their obligation to pay child maintenance. Child maintenance payments are required by law and are usually paid until the child is 16 years of age (increasing to 20 years of age if the child is in approved education or training). If the parties’ can agree on a child maintenance schedule, this can then be incorporated as part of any financial settlement. If however this cannot be agreed, or an agreement needs to be enforced, then the Child Maintenance Service (CMS) will need to be consulted.

How to obtain a clean break order

To obtain a clean break order, you need to make an application to the court. You can do this once the Conditional Order in the divorce proceedings has been pronounced.  It is strongly recommended that you ask a solicitor to draw up the financial agreement for you (referred to as a consent order), and that they then send it to the court for approval on your behalf. If the clean break order is granted, both parties are then prohibited from making any further financial claims against the other in the future.

By having a clean break order in place, you are protecting any wealth, property or business interests that you may acquire in the future. In turn, this will protect you, your new spouse (if applicable) and any children that you may have from other relationships. Without one, the consequences could be costly.

If you would like to know more about the topics discussed in this article, please do not hesitate to contact Stefan Donnelly or another member of the Birketts’ Family Team.