When couples divorce, dividing finances can often become a contentious issue. While informal agreements might seem sufficient at first, they lack legal enforceability, which can cause disputes down the line. A Financial Consent Order ensures that financial agreements made during the divorce process are legally binding. This blog will explain what a Financial Consent Order is, why it’s essential and how divorce mediation can simplify the process.

What is a Financial Consent Order?

A Financial Consent Order is a legal document approved by the court that formalises the financial arrangements agreed upon during a divorce. It covers all financial aspects, including:

• Division of property, savings and investments
• Spousal maintenance
• Pension sharing
• Any outstanding debts

The order ensures that neither party can make future financial claims against the other after the divorce. Without one, your ex-spouse could potentially reopen financial discussions, even years after the divorce is finalised.

Why is a Financial Consent Order Necessary?

Legal Finality

A Financial Consent Order legally ends the financial relationship between you and your ex-spouse. Without it, there’s no guarantee that financial claims won’t resurface in the future.

Enforceability

Informal agreements aren’t enforceable in court. If either party fails to meet the terms, you’ll have no legal recourse without a Financial Consent Order.

Clarity and Security

The order provides a clear record of the financial settlement, ensuring both parties know exactly what is expected. This minimises misunderstandings or disputes later.

Pension and Asset Protection

Pensions are often overlooked in informal agreements. A Financial Consent Order ensures that pensions and other long-term assets are fairly divided.

The Role of Divorce Mediation

Divorce mediation plays a vital role in creating the foundation for a Financial Consent Order. Mediation provides a neutral environment where both parties can discuss financial matters and reach an agreement with the help of a trained mediator.

Benefits of Using Mediation for Financial Settlements:

• Cost-Effective: Mediation is generally cheaper than going to court.
• Time-Saving: Agreements can be reached more quickly than through lengthy court proceedings.
• Reduced Conflict: Mediation encourages constructive dialogue, helping to maintain a more amicable relationship.
• Tailored Solutions: Mediators help parties design agreements suited to their unique circumstances.

Once an agreement is reached through mediation, it can be formalised into a Financial Consent Order and submitted to the court for approval.

Common Misconceptions About Financial Consent Orders

“We Don’t Need a Financial Consent Order If We Agree Informally”

Even if you and your ex-spouse reach an amicable agreement, it’s not legally binding without a Financial Consent Order.

“It’s Only Necessary for High-Net-Worth Divorces”

A Financial Consent Order is essential for all divorces, regardless of financial circumstances. It provides security and finality for both parties.

“It’s Too Expensive to Get One”

While there are costs involved, the expense is minimal compared to potential future disputes. Mediation can further reduce costs by streamlining the agreement process.

How to Obtain a Financial Consent Order

Reach an Agreement

Before applying for a Financial Consent Order, you need to agree on the division of assets. Divorce mediation is a practical way to achieve this.

Drafting the Order

A solicitor or legal professional will draft the Financial Consent Order based on your agreement. This ensures the document meets legal standards and includes all necessary provisions.

Court Approval

The drafted order is submitted to the family court for approval. A judge reviews it to ensure it is fair and reasonable. Once approved, it becomes legally binding.

What Happens if You Don’t Have a Financial Consent Order?

Without a Financial Consent Order, you leave yourself vulnerable to future financial claims. For example, if one party’s financial situation improves significantly after the divorce, the other party could potentially claim a share of their assets. This is especially relevant in cases where informal agreements were made. A well-known case involved a lottery winner whose ex-spouse successfully claimed a portion of the winnings years after the divorce because no Financial Consent Order had been obtained.

Can Divorce Mediation Work for High-Conflict Situations?

Mediation is often effective even in high-conflict situations. Mediators are trained to manage disagreements and guide discussions productively. By focusing on facts and solutions rather than emotions, mediation can help parties reach agreements that serve their best interests.

Securing Your Financial Future

A Financial Consent Order is a critical step in finalising a divorce. It ensures that financial arrangements are legally binding, providing clarity, security and protection for both parties. While it may seem like an additional step, the long-term benefits far outweigh the effort involved. Using divorce mediation to reach financial agreements can make the process faster, less expensive and less stressful. Mediators can help both parties navigate financial discussions and create an agreement that works for everyone involved. If you’re considering divorce mediation or need help obtaining a Financial Consent Order, Family Law Mediation is here to support you. Our experienced mediators and legal professionals can guide you through the process, ensuring your financial arrangements are secure and legally binding. Contact us today to learn more and take the first step toward resolving your financial matters with confidence.