What is a “clean break”?
Lawyers will often use the phrase “clean break” but what does it actually mean? A clean break in simple terms means that all financial ties are cut with your ex-spouse. This means that should you get a huge promotion, receive an inheritance or win the lottery, for example, your ex-spouse would not be able to make a claim on it.
The only exception to this is if you have minor children as the law will not allow you to obtain a “clean break” in respect of any child maintenance, for example.
The court’s view on a clean break
Section 25A Matrimonial Cause Act 1973 sets out that the Court has a duty to try and achieve a clean break as soon as is “just and reasonable”. This has logic because a divorce is intended to be the legal separation of two parties and it follows that their finances should be separated where possible, if only to avoid the potential for future conflict and animosity.
So how do I achieve it?
In some cases, for example a young childless couple with similar incomes, a clean break is an obvious solution and there is little debate.
In those cases, any capital or pensions may be divided and provided this is formalised in a court order once the agreement is implemented the financial ties end.
It is important to note that without a court order this would not be the case and even if assets have been divided by agreement and years have passed there could still be the potential for a claim.
In other cases, the position is more difficult. In a situation, for example, where one party has been out of the employment market for some time and the other is a high earner the only fair outcome might be for there to be ongoing monthly payments, at least until the spouse who has been out of employment has time to gain the skills necessary to find a job and be capable of meeting their own needs. A similar type of scenario might occur where there are young children and one party has given up their career to care for the children.
There are no rules with regards to monthly payments (also known as periodical payments or spousal maintenance) as the amount and length of time they are paid is very much driven by individual circumstances.
Where these payments exist, the paying party will not achieve a “clean break” until the end of the term.
Can you “buy” a “clean break”?
It is possible to capitalise maintenance and give the party who would ordinarily be expected to receive monthly sums an up-front capital sum instead (often discounted for accelerated receipt). Whether you want to do this will depend on a number of factors and there can be pros and cons.
If you have any questions about capitalisation, or clean breaks generally, please do not hesitate to contact one of our specialist divorce and finance team who would be happy to help.
