Financial Provision in Divorce

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What is financial provision?

Financial provision refers to the financial arrangements made to support a spouse or civil partner after a marriage or civil partnership ends through divorce, dissolution, or separation.

In England and Wales, financial provision encompasses a range of orders that a court can make to ensure fair financial support and distribution of assets. These provisions are primarily governed by the Matrimonial Causes Act 1973 and related legislation.

Types of Financial Provision Orders

Maintenance Pending Suit:

Temporary maintenance provided from the time a divorce or dissolution petition is filed until the final settlement.

Periodic payments:

Regular, ongoing payments from one spouse to another, typically on a monthly basis. These can be for a set period, until the recipient remarries, or until a significant change in circumstances.

Lump sum orders:

A one-time payment from one spouse to another, which can be in addition to or instead of periodic payments.

Property Adjustment Orders:

Orders transferring ownership or adjusting rights in property, such as the family home, to ensure fair division.

Pension Sharing Orders:

Orders that divide pension entitlements between spouses, either by transferring a portion of one spouse’s pension to the other or by creating separate pension funds.

Secured Provision Orders:

Orders that provide for maintenance payments to be secured against assets or property to ensure they are paid.

Clean Break Orders:

A clean break order is a type of financial settlement in divorce proceedings that aims to sever all financial ties between the former spouses. This order ensures that neither party can make any future financial claims against the other once the divorce is finalised.

When a clean break order is in place, it stops either party from making future claims for spousal maintenance or any other financial provision related to the marriage.

 

What does the court consider when making an order for financial provision?

The court will consider the “reasonable needs” of the parties. “Reasonable needs” refer to the financial requirements necessary to enable each party to maintain a standard of living that is fair and appropriate, considering the circumstances of the marriage. The concept of reasonable needs is subjective and varies from case to case, The court will consider a the parties’ circumstances when making an order for financial provision, these may include:

Needs of the children:

The welfare of any children of the family is the court’s first consideration. Provisions for housing, education, and general maintenance are prioritised.

Income and earning capacity:

The court examines both parties’ current and potential future earnings, considering their age, education, and work experience.

Financial needs and obligations:

The court assesses the financial needs, responsibilities, and obligations of each party, including financial resources, housing, living expenses, and any debts.

Standard of living:

The standard of living enjoyed during the marriage or civil partnership is considered to determine an appropriate level of support.

Duration of the marriage or civil partnership:

Longer marriages or partnerships often result in more significant financial provision, while shorter unions might result in lesser awards.

Contributions to the marriage:

Both financial and non-financial contributions (e.g., homemaking, caring for children) are taken into account.

Health and age of the parties:

The health, age, and any disabilities of the parties can impact their financial needs and earning potential.

Financial provision case law examples

Waggott v Waggott [2018] EWCA Civ 727

This case involved the financial settlement following the divorce of Mrs. Waggott and Mr. Waggott. Mrs. Waggott appealed the financial order made by the High Court, seeking an increase in her maintenance and arguing against a clean break.

The Court of Appeal upheld the original decision, emphasising the importance of achieving a clean break where possible. The court decided that Mrs. Waggott’s needs had been adequately met and that she should become financially independent within a reasonable period.

The case reinforced the principle that maintenance should not be a “meal ticket for life” and that there should be a push towards financial independence for the receiving party.

Alderton v Callahan [2021] EWCA Civ 2122

This case involved an American couple who divorced after a long marriage. The wife sought substantial financial provision, arguing that the wealth accumulated during the marriage, largely by the husband, should be shared.

The Court of Appeal upheld a substantial award to the wife, including a significant lump sum and ongoing maintenance. The court considered the standard of living during the marriage and the contributions of both parties, including the wife’s role as a homemaker.

This case illustrated how the court considers both financial and non-financial contributions to the marriage and emphasises the need to provide adequately for both parties’ reasonable needs post-divorce.

How can Expert Family Law assist?

Understanding financial provision can be incredibly daunting. Our family law solicitors can assist you with every stage of the of divorce.

We ensure that the law firms on our panel have the skills and experience required to assist with your legal case.

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Get in touch today to find out if a divorce solicitor from our panel could help on your case.

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