Following a divorce or civil partnership, resolving property and money matters is often a priority; one which can demand plenty of emotional resources and time to resolve. Often a ‘financial order’ will be made by a Court in order to mandate payments of one party to the other. Over time, however, the circumstances of the two parties may change, leading to the need to put new financial order arrangements needing in place. In this article, we will look at the types of orders which can be varied, what is meant by a ‘clean break’, and the benefits of alternative dispute resolution methods should a disagreement occur.
Which financial orders can and cannot be varied by the Courts?
A wide range of financial order types can be varied by the Courts, including:
- Provision for children – periodical payments or lump sum payments for a child of the family
- Periodical payment orders (PPOs) or secured periodical payments – whereby an order is issued by the Court for one party to pay the other ongoing regular payments.
- Lump sums by instalment
- Maintenance pending suit – whereby an order is issued for interim payments to be paid by one party to another between divorce and its finalisation, to meet their immediate financial needs.
- Deferred lump sums – whereby a lump sum payment is ordered between parties, but the payment is deferred (e.g. in the case of a pension).
- Settlement orders – settlement of property for the benefit of a spouse or children of the family
- Sale of property – whereby a financial order for secured periodical payments, lump-sum payment, or property adjustment depends on the sale of property.
- Pension sharing orders before decree absolute
- Executory orders – a financial order which is yet to be fully implemented
Not all financial order types can be varied; in general, income orders can be, but capital orders (i.e. where a capital sum is paid by one party to the other) cannot. Specifically, the following types of financial orders cannot be varied:
- Lump sums not paid in instalments
- Property adjustment orders – i.e. orders which change the rights of parties to a property – perhaps from joint ownership to one owner or to pay one party half of the realised value of a property once sold.
- Pension sharing order after decree absolute
What will the Court consider in a financial order variation application?
From the outset, the primary consideration for any Court assessing an application to vary a financial order is the welfare of any children involved. They will then look at any changes to the circumstances of the parties, in particular those which led to the original order being made. For a variation to be made, they will typically be looking for a significant change of circumstances, such as one party entering into a new marriage or the party making payments losing their employment.
If it is not clear what the original financial order was intended to achieve due to lack of explanation in the paperwork, the Court will endeavour to use any information available to understand the original reasoning of the judge.
In an application for variation of a financial order, the Court may decide to terminate any financial dependence of one party on another (i.e. making a clean break), but they can only do so if it will not impose any ‘undue hardship’.
Other factors which the Court will consider include the:
- Fairness of varying the order
- Financial impact of any variation
- Balance of responsibilities between the needs of the first and new families – as such, a person is entitled to balance their responsibilities of an existing family with the needs of a new family.
- Financial mismanagement – this will typically be dismissed as a basis for an application to vary a financial order, for example where an applicant has mismanaged their finances and wishes to receive more financial assistance from their ex-spouse.
- Previous agreement not to vary a financial order – these are typically drafted in the form of a ‘side letter’ and may contain an agreement not to seek to extend the duration of any periodical payments.
- Proportionality – typically, courts will only invest time into the assessment of a case in proportion to the extent of the case. For example, if the original financial order was made recently, then the Court will be less likely to commit to a more highly detailed review.
For any individual considering applying for a variation of an existing financial order, the first step should be (where possible) to agree any changes needed directly with the other party. In doing so, the cost, time, and stress of asking the Court to decide on your behalves can be avoided. By engaging the services of a family Solicitor, you can use alternative dispute resolution methods such as mediation to find an agreement with your ex-partner without involving the Courts, with the considerable benefit of preserving the relationship between you, for the sake of your children. However, if you do need to ask the Court to make a ruling on your behalf, a Solicitor specialising in family law will guide you through the process from beginning to end, ensuring that your best interests are protected, and the worry over financial matters is lifted from your shoulders.
Rosie Bracher are specialist family law solicitors based in Barnstaple. We have the knowledge and expertise to advise you on varying a financial order. Please contact our office on 01271 314 904 and arrange to speak to one of our team.