Ideally it will be possible for you and your spouse to reach an agreement as to how the finances will be dealt with on divorce or dissolution without the need to go to Court. However, if you can’t reach an agreement, it’s important to understand the wide range of Financial Orders that the Court can make.
An Order for Maintenance Pending Suit
This Order can only be obtained during divorce proceedings (see Orders for Maintenance Pending Outcome of Proceedings below for civil partnership proceedings). This is an application to the Court to order that you should receive maintenance (also referred to as periodical payments) until the Decree Absolute is made. The logic of this is that any financial agreement that has been reached or imposed will come into force upon the Decree Absolute being made and if you still need maintenance that will be part of the financial settlement.
An Order for Maintenance Pending Outcome of Proceedings
This is an Order that you can seek when there are proceedings for a dissolution of a civil partnership. It is the equivalent of the Order for Maintenance Pending Suit in divorce proceedings. This is an application to the Court to order that you receive maintenance until the Final Order in the dissolution proceedings is made.
A Property Adjustment Order
This Order allows the Court to deal with properties (such as the family home) as it sees fit. It doesn’t matter in whose name the property is held – the Court can order it to be transferred to one of you or for it to be sold and the proceeds divided, as it considers appropriate. In addition to ordering that a property is sold or transferred, the Court can also order that the sale of the property be delayed to a future point.
The most common examples of these Orders are Mesher and Martin Orders (named after the cases in which they were first used) described in more detail below.
A Mesher Order:
This type of Order is sometimes used where there isn’t enough money to divide the capital and retain a house for (usually) the wife and children.
A Mesher Order allows the primary carer and children to remain in the property (which remains held in both of your names) until the children are 18 or they leave university. At that point the property is sold and the equity is divided.
A Mesher Order would also usually set out that, if the wife were to remarry or leave the property voluntarily, it would be sold.
A Martin Order:
A Martin Order is very similar to a Mesher Order except that the reasons for the house being sold don’t refer to children.
The reason for a Martin Order is that the richer financial party doesn’t need access to his / her share of the equity in the property but, if the property were sold, the weaker financial party wouldn’t be able to rehouse himself / herself. Therefore, the property isn’t sold until the occupying spouse dies or moves out voluntarily.
A Lump Sum Order
This allows the Court to order one of you to pay a lump sum of money to the other. It’s only possible for the Court to make one Order for the payment of a lump sum. However, the lump sum may be payable in instalments.
A Periodical Payments Order
A Periodical Payments Order is simply another way of saying ‘maintenance’. The Court can order spousal maintenance (including for civil partners) or maintenance for the benefit of any children. In respect of spousal periodical payments (maintenance), they can be payable for:
- A “term” (i.e. for a set period of time), or;
- For “joint lives” (i.e. until one of you dies or the receiving party remarries or enters into another civil partnership, or until further Order of the Court).
If circumstances change, it’s possible for either of you to apply to Court for the level of the payments to be varied up, down or to be stopped. If there’s an Order for periodical payments for a set term, the wording of that Order will determine whether that term can be extended or not. Once periodical payments have stopped they cannot be restarted.
A Maintenance Order can be capitalised (usually this would only relate to spousal maintenance). This means that, instead of receiving regular periodical payments, you would receive a lump sum instead. An example of this would be if you were due to receive £10,000 per year for five years and instead that was capitalised and you received a lump sum of £50,000 instead. Sometimes there is a reduction in the capitalised sum to reflect that the person receiving it has the benefit of receiving it all in one go.
A Secured Provision Order
If there is a concern that the person paying the maintenance might stop paying, the periodical payments can be secured on an asset. This means that the asset guaranteeing the periodical payments can then be sold if the payer stops paying for any reason.
A Clean Break Order
This is an Order that there will be no on-going financial debts or obligations between the two of you. The Court has a duty to consider whether this is possible. It’s possible to have a “capital clean break”, which means that you have agreed how the assets will be divided, but one of you may still be paying the other maintenance. A “full clean break” would mean that the assets have been divided and neither of you is going to pay the other maintenance. This doesn’t include child maintenance.
A Pension Sharing Order
A Pension Sharing Order is available upon divorce or dissolution. It involves a percentage of the capital value of your pension being transferred to your spouse or civil partner. This then becomes his / her own pension. Some pension providers will permit him / her to then transfer this to another pension provider. However this will depend upon the rules of the scheme.
A Pension Attachment Order
Unlike a Pension Sharing Order, a Pension Attachment Order doesn’t involve one of you receiving, in effect, a separate pension. This type of Order means that, when the pension in question starts paying, it pays a proportion of the payments to your ex-partner as well as to you.
A Pension Compensation Sharing Order
This is where your pension fund has gone bust and has been taken over by the pension protection fund. It is the same as a Pension Sharing Order except that the source of the funds is the pension protection fund in place of the original pension fund.
A Pension Compensation Attachment Order
This is the same as a Pension Attachment Order except that, because your pension fund has gone bust, the source of the funds is the pension protection fund.