Since the introduction of no-fault divorce in England and Wales, obtaining a divorce has become a more straightforward administrative process. However, one misconception persists: that the Final Order (previously known as the Decree Absolute) also brings financial matters between spouses to an end. It does not.
In reality, the dissolution of a marriage and the resolution of financial claims are two separate legal processes. Failing to address financial matters before finalising a divorce can have significant and, in some cases, irreversible consequences.
The Family Court has wide-ranging powers to redistribute assets upon divorce, including property, pensions, savings and income. Importantly, these financial claims remain alive even after the Final Order has been granted unless they have been dismissed by way of a court-approved financial consent order or determined by the court in contested proceedings.
This means that an ex-spouse could, in principle, bring a financial claim many years after the marriage has ended.
There are also practical reasons why financial issues should be resolved before the divorce is concluded. Pension rights, inheritance entitlements, and certain benefits can all be affected by the timing of the Final Order. For example, once a Final Order is made, a spouse may lose entitlement to widow’s or widower’s pension benefits under some occupational pension schemes.
If one party dies before financial claims have been resolved, the surviving spouse’s legal position may be significantly different depending on whether the marriage has legally ended.
Where agreement has been reached, it is essential that the terms are incorporated into a financial consent order and approved by the court. A private agreement, however amicable, does not prevent future claims unless it has been formalised through the court.
A consent order typically provides a “Clean Break” which has the effect of dismissing all claims either party may have on the other in life and upon death. Thus, giving both parties some certainty and finality.
If agreement cannot be reached, either party may apply to the court for a financial remedy order. Although litigation should generally be viewed as a last resort, obtaining a binding order even if this is done through court is often preferable to leaving financial claims unresolved indefinitely.
In practice, the majority of financial settlements are achieved through negotiation, mediation, or solicitor-led discussions. Early legal advice can help identify the matrimonial assets, assess likely outcomes and ensure that disclosure is comprehensive before meaningful negotiations begin. This often results in a more efficient, cost-effective resolution than contested proceedings.
While many people understandably focus on obtaining the divorce itself, it is the financial settlement that frequently has the greatest long-term impact. Ensuring that finances are properly resolved before or alongside the Final Order not only protects both parties’ interests but also delivers the certainty and closure that divorce is intended to achieve.
Careful planning at the outset can help avoid unnecessary disputes, safeguard future financial security, and provide a firm foundation for the next chapter of life.
Matters, particularly in respect of finances, are case specific and we would always suggest seeking independent legal advice to ensure you are aware of your legal rights.
