Whilst divorce marks the conclusion of a marital union, it doesn’t always involve a severance of all financial obligations.
Financial obligations and responsibilities can continue long after the divorce proceedings have been concluded. This is particularly true in cases involving children where the lesser-earning partner necessitates assistance with day-to-day living expenses by way of spousal maintenance.
Spousal maintenance is not a universal component of all divorces, however, at times, parties may opt for a ‘clean break’ of all income and capital claims enabling a more definitive separation of their lives moving forward.
What is a clean break settlement in a divorce?
A clean break entails both parties in the divorce parting ways without any lingering financial obligations towards each other of a capital or income nature. Whilst child support obligations may continue and these are the domain of the Child Maintenance Service, save where child maintenance is agreed and even then, the jurisdiction of the CMS can only be ousted for a maximum of 12 months, there may no ongoing spousal maintenance, constituting a clean break.
Why should I consider a clean break when divorcing?
A clean break may be an attractive option for individuals who no longer depend on their former spouse and seek complete economic and practical autonomy. Likewise, it can serve as a means for someone to safeguard their future finances from a former spouse’s claims as detailed below.
A crucial aspect of a clean break arrangement is the prevention of one party making claims on assets acquired by the other post-divorce. For instance, any future inheritance, lottery win or windfall would remain solely with the recipient and not be subject to a claim from a former spouse. This instils in both parties the assurance of knowing that what belongs to them presently and in the future, will remain their undisputed property.
When is a clean break suitable in divorce?
It is a fallacy that separation and divorce creates a clean break, in that if you have not entered into a consent order, dismissing all future income and capital claims, a former spouse can still make a financial claim against you, however long you have been separated or divorced. You can get a clean break at any point after you have received your Conditional Order for divorce. You will need to have agreed on how your matrimonial assets will be divided, and the court will need to approve the terms of your financial settlement before issuing the clean break. A clean break is a type of financial order, and so not every financial order is a clean break e.g if it contains a provision for maintenance. A clean break will be suitable where the house has been sold, the pensions can be split and a distribution of savings and investments can be determined with both spouses being able to move on financially, adjust to the separation and be self-sufficient.
When is a clean break not suitable in divorce?
If one spouse has limited income, whether or not on account of child-care responsibilities or otherwise, a clean break may not be considered fair or appropriate. In these circumstances spousal maintenance will be payable based on how much that spouse needs to live on, how much income they have, how much they could potentially earn in the future and what surplus income the potential payer has in their budget. Spousal maintenance is paid on an annual or monthly basis and can continue for a fixed time to enable the payee to adjust to the separation, for as long as the children are minors or less frequently indefinitely “for joint lives,”
There is also the option where there are young children for a spouse with care of the children, and is working and able to manage their budget to obtain a nominal spousal order. This does not provide for substantive maintenance but in the event of circumstances changing that prevent that spouse from working such as their ill health or the ill health of a child, they can apply to the court for the nominal spousal order to be increased to a level that enables them to meet their necessary expenditure. As such, it acts as a safety net for as long as the children are minors.
Does a Clean break have to be agreed?
It is better if a clean break can be agreed as it will be a quicker, less expensive process in that you and your spouse can submit the agreed consent order allowing for the clean break, to the Court after the Conditional Order has been granted. Most solicitors provide a fixed fee for this. Of course, as this needs to be endorsed by the Court, and so it could be rejected if it appears unfair in your particular circumstances and does not meet the necessary requirements for this.
If it is not possible to agree a clean break, then you will have to lodge an application to the court for a financial remedies order requesting a clean break and it is then for the Court to decide and impose an order. There is also the option of attempting mediation or arbitration as a more cost-effective way of achieving a clean break.
This is a general summary of the law. It should not replace legal advice tailored to your specific circumstances.
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