Clean break agreements

Reviewed by Dominic Wisdom of Brethertons Solicitors


Clean break agreementsA clean break allows you to become financially independent from your former spouse when you divorce. If your financial position allows it, a clean break agreement is usually preferable to continued spousal maintenance. You will want to be sure that your agreement covers all the key issues and is made legally binding with a clean break order

When is a clean break possible?

A clean break settlement means that you agree how your property, savings and other assets are to be divided between you, once and for all. Once a clean break order has been finalised, neither of you will be able to make any further financial claim against the other.

If one of you is financially dependent on the other, it may be difficult to reach a clean break agreement unless there is enough money available to pay a lump sum as part of a fair settlement. For example, if one of you looks after the children and has a low or zero income, you may need to agree spousal maintenance instead.

By contrast, it should be possible to agree a clean break if you have limited or no financial claims against each other. A clean break is most likely if you have been married for a relatively short time, have no children and earn similar incomes.

You cannot agree an entirely clean break if you have children who are eligible for child maintenance. But you can agree a clean break that covers all other financial claims between the two of you.

Advantages of a clean break

If a clean break is possible, it’s often a better solution than agreeing continuing spousal maintenance. If you cannot agree a financial settlement between yourselves and ask the court to decide, the court will always look to see whether a clean break order would be fair and reasonable.

For some divorcing couples, becoming financially independent from your former spouse may be emotionally preferable. But a clean break also helps reduce the potential risks and uncertainty of continuing to pay or receive spousal maintenance.

Spousal maintenance ordered by the court can be varied if the circumstances justify it. So if your future financial position improves, you may find your former spouse asking for a larger share (or a reduction in any maintenance paid to you). Equally, if you continue to depend on maintenance, you could suffer if your former spouse can no longer afford the payments or simply fails to pay.

Spousal maintenance always ends if the recipient remarries. So if you are financially dependent on your former spouse and intend to remarry, a clean break will be preferable.

What the clean break agreement covers

A clean break agreement takes into account all the assets and income that each of you have, and aims to balance your interests. The longer your marriage has been, the more likely it is that the less wealthy partner will be entitled to a substantial share of the assets – particularly if they made a substantial contribution to the marriage by looking after the house and children.

As well as agreeing how much you are each entitled to, you need to agree how particular assets will be shared out. For example, one of you might want to stay in the family home with the children while the other receives a correspondingly higher share of other assets.

Pension entitlements can be a very valuable asset and will need to be included in the agreement. You might agree to split a pension fund or one partner might retain the pension fund while the other received a corresponding lump sum or other assets.

As part of the clean break agreement, you will also need to deal with any debts: for example, if there is a mortgage on the house.

Finally, the agreement should make it clear that neither of you will be able to make any future financial claims against each other - including making any claim against your former spouse’s estate if they die before you.

Reaching a clean break order

To make your agreement final, you must have a consent order signed by both of you and agreed by the court. Until you have a clean break order, either one of you could change your mind.

If possible, you should try to negotiate agreement between yourselves, though you may also want to take legal advice on what would be a fair agreement. Other alternatives include using family mediation or collaborative law, or involving your lawyers.

Be clear about your priorities, and realistic about what you can expect to achieve. If you cannot reach agreement and ask the court to decide, you are unlikely to end up with exactly what you want either - and will have higher legal costs. Drawn-out and expensive legal arguments should be avoided if at all possible.

Once you have reached agreement, your lawyer can turn this into a draft consent order for the court to approve.

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