What is a Clean Break and Why do I Need One?

What is a Clean Break?

As a result of their marriage, separating spouses automatically have various financial claims against each other, such as:

• Capital claims – i.e. in relation to property, savings, investments etc
• Income – i.e. payments of a periodical nature made by one party to the other (spousal maintenance)
• Pension sharing – if there is a disparity in the parties’ respective pension values, a pension sharing order can be ordered to equalise the parties’ pension provision on retirement

A clean break is a financial arrangement between separating spouses which cuts all financial ties between the couple, meaning that once there has been a redistribution of the parties’ assets, i.e. the house has been sold and net sale proceeds distributed, or a pension sharing order has been implemented, neither party will be able to make a claim against the other party’s assets. This includes during joint lives and upon death. This includes any future claims against:

• Income – i.e. periodical payments (also known as spousal maintenance)
• Capital – i.e. savings or investments
• Property
• Pensions
• Inheritance
• Any other financial resources

Why is a Clean Break Important?

It is a common myth amongst separating spouses that once the house has been sold, savings divided and divorce finalised, there is nothing further to be done and there can be no further financial claims. However, the financial claims between separating spouses do not end upon the parties legally ending their marriage by getting divorced. The financial claims remain live until they have been dismissed by way of a separate court order, namely a financial remedy order. A financial remedy order can be made by consent where the parties have been able to reach an agreement regarding their finances outside of the court arena (also known as a consent order), or can be imposed by the court if no agreement can be reached. Even when the parties have managed to reach an agreement between them, the consent order will still need to be approved and sealed by the court to become legally binding.

In cases where there are no assets, a financial remedy order is still necessary to ensure that the financial ties between the parties are severed. There is no end date on which the financial claims between separating spouses cease to exist in the absence of a financial remedy order.

A clean break gives both parties confidence that their financial matters have been properly concluded and there is no risk that their former spouse could make a claim years, even decades down the line, or even makes a claim against their estate upon their death. It allows both parties to move forward without an ongoing financial connection to their former spouse.

A clean break also protects assets acquired after separation, for example inheritance, a lottery win, a significant salary increase or a successful business built after the separation.

Is a Clean Break Always Appropriate?

A clean break may be appropriate where the parties have sufficient resources to meet their needs without requiring ongoing financial support. However, it is not always possible. Where is a significant disparity in income and other resources, dependent children, ill health, an immediate clean break is unlikely to be considered appropriate. For example, it may be necessary for a high earning party to pay spousal maintenance to the other party if they are unable to meet their own needs from their own resources for reasons such as sacrificing their career to look after the parties’ children, or being unable to work due to ill health.

Financial Provision for Children

A clean break between separating spouses does not prevent a party from making a separate claim for financial provision for children by applying to the Child Maintenance Service or in certain circumstances, the court. Your Family lawyer will be able to advise you on the appropriate course of action in this respect.

Contact Us

To speak to a member of our family law team, please get in touch with us at FamilyNewEnquiries@everys.co.uk or call us on 01392 477983.