When marriages or civil partnerships end, in most instances, there are finances that need to be resolved. But this is not an automatic process, and means that if an agreement cannot be reached, a financial application, separate to divorce or dissolution, must be made. These proceedings are called ancillary relief and cover the couples financial claims arising from the breakdown and usually include the family home, capital assets, income, and pension.
Do I need an ancillary relief financial order?
Ancillary relief is the process of untangling a couple’s finances and dividing them according to factors such as financial needs, obligations and responsibilities, the age of the parties, their earning potential, and the standard of living enjoyed by the family before the marriage broke down. Even if you have no assets at all, it is worth obtaining a ‘clean break’ order that effectively ends all financial ties between you to prevent any future claims being made.
What powers does the court have in ancillary relief proceedings?
Either party can apply for ancillary relief, which may be either for themselves or the children of the family. The court has wide discretion when dividing matrimonial assets, which has been enshrined in law under Section 25 of the Matrimonial Causes Act 1973. It is important to note that the court cannot make a final order in ancillary relief proceedings until after the Conditional Order of the divorce/dissolution has been granted.
The court can make any of the following ancillary relief (financial) orders:
Maintenance pending suit (MPS)
MPS orders the other party to pay maintenance until the proceedings have been finalised and a settlement reached. It can include maintenance for the spouse, and children of the family, and in some cases, a contribution towards the spouse’s legal costs. Such orders automatically end on the making of final orders.
Periodical payments order (PPO) / Secured periodical payments order (SPPO)
A PPO/SPPO is paid after the final divorce/dissolution order has been granted. SPPOs are usually made when there is a real concern that the paying party will be unable to make the periodical payments unless they are guaranteed in some way. The court has the power to limit the duration of maintenance, which can be varied upwards or downwards at any time providing there has been a substantial change in circumstances of either the paying or receiving party.
Lump sum order (LSO)
An LSO is generally made to facilitate a ‘clean break’ settlement. This is a final resolution of the parties’ financial claims against the other, including maintenance claims. This is known as ‘capitalising’ maintenance. The court can order the lump sum to be paid all at once or by instalments.
The court can order a pension fund to be split between divorcing couples and paid into separate funds via pension sharing, or hold a percentage of the fund for the receiving party, order division of the pension payments and lump sums between the parties when the pension is eventually paid. This is called a pension attachment order.
Transfer of property order (TPO) / Property adjustment order
A TPO transfers matrimonial property from one party’s name into the other’s, from joint names into a party’s sole name, or from the name of a company (if applicable) to a party’s sole name. The court may make such an order where:
- It is in the child’s best interests to remain in the former family home with one parent
- It is difficult for one party to secure a roof over their head after divorce. This could be due to affordability or disability, for example
- The recipient party can pay the mortgage and other household expenses with or without the assistance of the other party
Variation of settlement order (VSO)
Under section 31 of the Matrimonial Causes Act 1973, the court has the power to vary financial orders years after the original order was made. The purpose and rationale behind the original order will be considered by the court alongside the new circumstances, although it is not restricted by the terms of the original order.
How can I protect my position during the divorce?
If you own the matrimonial home jointly with your ex-spouse, and they die before the divorce is finalised, you will automatically own the whole of the property. If you are divorcing, you should consider ‘severing the joint tenancy’, which enables both you and your ex to leave your half of the property to your beneficiaries. Of course, this is a double-edged sword, and it would not be advisable to sever a joint tenancy if your ex is in ill-health for example, as you risk losing inheriting the whole property if you have severed, and they subsequently die before a final order is made.
Joint bank accounts/credit cards should be transferred to one party’s sole name, if possible. You will be jointly liable for any debts run up by either of you on jointly owned accounts, so closing, transferring, or freezing them will prevent your ex running up debts that will detrimentally affect you and your credit rating.
If you are going through a divorce, or even if you are separating and thinking about your options, making a new will is a sensible approach and allows you to appoint those you wish to benefit from your estate if you die before the divorce is finalised. Otherwise, the main bulk of it will probably vest in your ex.
Taking care of your tech/data during divorce
Many people forget that information is an asset too, which can, and often does, get used against them. Whether you share a device with your ex, or they know all your passwords, you should consider the following to protect your tech/data and access to it:
- Open a secure online account, update passwords and security questions and try not to write them down
- Delete any sensitive browsing history and temporary internet files
- Delete any sensitive/incriminating photographs that could be shared and used against you
- Look into web-based products that can keep confidential documents off your home computer/laptop
- Password protect your mobile phone that you use to access emails with a separate password from that of your secure email account
- If your ex has a user account on your device, ask an IT expert to revoke their administrator rights if you don’t know how to do this yourself.
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The information on this website is to be considered a guide and is therefore not legal advice. You use this information with the understanding that Wiselaw does not accept liability for any direct or indirect losses as a result of anyone relying on or acting upon the information on this website. Whilst we endeavour to provide accurate information, Wiselaw does not accept liability for any errors or omissions on this website.