What is a Clean Break Order?

What is a clean break order?

When people say they want a “clean break” from their marriage, they usually mean more than an emotional one. They want to move on without the risk of financial claims appearing years later. A clean break does exactly that: it formally ends the financial ties between you and your former spouse, so that neither of you can make future claims against the other.

In this guide we explain what a clean break order is, why it matters, when it is realistically achievable and how to get one under the law of England and Wales.

Divorce and finances are two separate processes

In England and Wales, divorce has two distinct parts. The first is the legal process that ends the marriage. The second is dealing with the financial arrangements: property, pensions, maintenance and savings. A divorce on its own does not end financial claims. Even after the Final Order, claims remain open unless they are resolved and dismissed by the court in a financial order.

A financial order sets out how your finances are divided. It can include the division of assets, spousal maintenance, a property adjustment order, a pension sharing order or a lump sum order. The court reviews the proposed order to make sure it is fair before approving it.

What is a clean break?

A clean break means that once the divorce and the financial arrangements are finalised, neither of you can make any further financial claims against the other. This covers claims for maintenance, lump sums, property, pensions and claims against each other’s estate on death. With a clean break, neither of you has to make ongoing maintenance payments, and future windfalls such as an inheritance or lottery win are protected from claims by your former spouse.

Other settlements involve ongoing obligations. For example, under a periodical payments (maintenance) order one party pays the other regular amounts, often where one has a higher income and the other needs support to meet their needs.

Clean break and consent orders: how they fit together

A clean break is not usually a separate order that sits alongside a consent order. It is a set of terms within the financial order that dismisses future claims. Where you have agreed your settlement, that financial order is normally a Consent Order that the court approves. A consent order may include a clean break, or it may include ongoing obligations such as maintenance, in which case it will not be a clean break.

Where there are few or no assets to divide, a simple consent order containing clean break terms can still be very valuable, because it protects both of you from claims in the future.

Why leaving finances unresolved is risky: Wyatt v Vince

One of the clearest examples comes from the Supreme Court case of Wyatt v Vince. The couple divorced in the early 1990s. Neither had any real assets at the time, so no financial order was made. The husband later built a highly successful business and became very wealthy. More than 20 years after the divorce, the former wife brought a financial claim. The Supreme Court confirmed that, because no order had ever dismissed her claims, her application could proceed. She was eventually awarded a lump sum of £300,000, far less than the £1.9 million she had sought, but the case shows why claims should be formally closed.

When is a clean break possible?

A clean break is not suitable for every case. It is more commonly achievable where:

• the marriage was relatively short;
• both of you are financially independent, or can be through a fair division of assets;
• there is enough capital to allow a final settlement;
• neither of you needs ongoing financial support from the other.

Where one of you needs ongoing support to meet your reasonable needs, a clean break may not be appropriate straight away.

Clean break and spousal maintenance: immediate and deferred clean breaks

If one party cannot meet their needs without support, the court may order spousal maintenance. That does not rule out a clean break for ever. There are three common approaches:

• Immediate clean break: all financial ties end when the court approves the order.
• Capitalised maintenance: instead of monthly payments, a larger lump sum or a greater share of the assets is paid upfront, allowing an immediate clean break.
• Deferred clean break: maintenance is paid for a fixed term, for example until children become more independent or the receiving party increases their earning capacity, and ends at that point. The court can direct that the term cannot be extended.

A clean break does not affect child maintenance

A clean break deals with financial claims between spouses. It does not end either parent’s responsibility to support their children. Child maintenance continues to be dealt with separately, usually by agreement or through the Child Maintenance Service, and it cannot be dismissed by a clean break. Arrangements for where children live and the time they spend with each parent are also dealt with separately, for example in a child arrangements order.

How to get a clean break order

1. Reach an agreement. This can be through negotiation, mediation or discussions between your solicitors. If you both aim for a clean break from the outset, the process is usually more straightforward.

2. Exchange financial information. The court needs to see your income, earning capacity, assets and needs, and full and frank disclosure is essential. In contested cases this is done using Form E.

3. Submit a draft consent order. The agreement is set out in a draft consent order and sent to the court for approval. The court fee is £62. You can apply once the Conditional Order has been made; the financial order takes effect once the Final Order is granted.

4. The court reviews it. The judge checks that the settlement is fair. The court is particularly careful where a clean break might leave one party unable to meet their reasonable needs. If it is satisfied, it approves and seals the order, which formally dismisses future claims.

If you cannot agree, you can ask the court to decide, and the court can impose a clean break in contested proceedings. The fee for a contested financial order application is £321, and contested proceedings are usually more time-consuming, expensive and unpredictable.

Advantages of a clean break

• Financial independence: no ongoing obligations to each other.
• Protection from future claims, even if your financial situation changes significantly.
• Certainty and finality, so you can plan ahead.
• Protection of future windfalls such as an inheritance or lottery win.
• Emotional closure, which should not be underestimated.

Potential disadvantages

• No ongoing spousal support: once agreed, neither of you can seek maintenance from the other, even if your circumstances change. If you are financially dependent on your spouse, a clean break may not be right for you. (Child maintenance is not affected.)
• Finality: once approved, the order is very difficult to change, even if there is a significant change in circumstances such as losing your job or ill health.
• Disclosure risks: if assets were not properly disclosed, the order can be challenged, leading to further disputes.

Is a clean break order essential?

For most people, a clean break is highly advisable. Nobody can predict their finances five, ten or twenty years ahead. It is also important if either of you may remarry, because of the remarriage trap. This applies equally where a couple separated long ago: see our guide to reaching a financial settlement after 5 years separation.

A clean break may not be possible immediately where ongoing spousal maintenance is needed, but even then a deferred clean break may be achievable.

How Tyrer Roxburgh can help

Do not rely on assumptions or informal arrangements. If you are thinking of divorce, or have started proceedings and want to know whether a clean break is possible, our family law solicitors can advise you and make sure the paperwork properly protects you. Our fixed fee family law consultation is a good place to start. Call us on 020 8889 3319 or send us an enquiry.