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Agreement

 

 

 

 

 

 

The terminology ‘a clean break’ means that parties to a marriage/civil partnership will have no financial ties against each other once the order has been approved by a judge and once a decree absolute has been pronounced.

When parties are married or in a civil partnership, they have financial claims against each other’s assets; such financial claims include claims against each others income, capital, property, pensions and inheritance. These financial claims can remain open even after the parties are divorced if they are not formerly dismissed by way of either an order by consent or an order imposed by a court in contested family law proceedings.

The court has a duty to consider in all cases whether it is appropriate to exercise its powers so that the financial obligations of each party towards the other will be terminated as soon after the grant of a decree absolute or final order of a civil partnership. As to whether there should be a complete clean break is dependant upon the circumstances of each case.

In the event a party is ordered to pay periodical payments (spousal maintenance) to the other spouse or civil partner, then a court must decide whether the periodical payments should be paid for a limited time only and defer the clean break. The principle to be applied is to identify a point in time, as in the opinion of the court, to be sufficient to enable the party in whose favour the order is made to adjust without undue hardship to the termination of his or her financial dependence on the other party.  Such points in time are often referred to as ‘trigger events’ which sets out dates upon when periodical payments end which could include:

  • Remarriage of the spouse or civil partner receiving the payments;
  • Death of either party (but an insurance policy can be set up to protect payments in the event of the paying party’s payments);
  • The youngest child attaining a certain age (usually age 18) or ceasing full time education which ever is the later date.
  • Upon a further court order.

It is upon one of the trigger events above that the spousal maintenance claim will be dismissed achieving a complete clean break.

Another option to dismiss a periodical payment order would be to capitalise the future payments. This would only be suitable if the paying party had the capital to capitalise.  Therefore, if as an example the paying party came into some money (won the lottery or inherited capital) and they were paying a fixed amount per month over a period of time, they could capitalise the payments and offer a lump sum payment to create a complete clean break and a dismissal of the periodical payment claim.

The courts encourage spouses and civil partners to gain financial independence from the former spouse/civil partner, if at all possible, as soon as practicable. In many cases achieving an immediate clean break is possible but it can be difficult to achieve an immediate clean break where there is limited income and/or young children.  Therefore, in a situation where a married couple has no disposable assets but they have young children together, a court will most likely insist on keeping spousal maintenance claims open.  This is to protect the person with day to day care of a child in the event of an illness or accident meaning that they cannot financially cover their day to day living costs without asking the former spouse or civil partner for further financial assistance (providing of course they have the ability to pay).  There will still be a trigger event to dismiss the live spousal maintenance claim, such trigger events are similar to those quoted above.

Where there is an order of limited duration but the order contains no provision dismissing the right of the recipient to seek an extension of the term, provided the application to extend the term is made during the life of the original order, the court will retain jurisdiction to hear the application, even if the hearing takes place after the order has expired. Therefore, this could mean that the recipient could extend one of the trigger events, perhaps until a child has finished University.

The financial obligations towards children are totally different to the financial obligation towards spouses or civil partners. The obligation to pay child maintenance is governed by the Child Maintenance Service (in most cases) and the obligation to pay child maintenance continues despite the parties to the marriage achieving a clean break.

The contents of this article are intended for general information purposes only and shall not be deemed to be, or constitute legal advice. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of this article. For advice regarding property purchases, please contact Paul Davies on 01329 232314 or by email info@awdlaw.co.uk