When you divorce or dissolve your civil partnership in England, Wales or Northern Ireland, one of you may agree to pay the other a lump sum or ongoing spousal maintenance payments. Both are designed to help the financially weaker person adjust to their financial position after divorce. It also ensures the final financial arrangements are fair. Couples and the courts generally prefer a ‘clean break’, but that isn’t always possible.
- Understanding clean breaks
- What is spousal maintenance?
- A clean break instead of spousal maintenance
- Insuring spousal maintenance payments
Understanding clean breaks
When you’re working out how to divide your property and assets, it might make sense for you and your ex-partner (husband, wife or civil partner) to arrange a ‘clean break’ of your finances.
A clean break means ending the financial ties between you and your ex as soon as reasonable after your divorce or dissolution.
Where there is a clean break, there will be no spousal maintenance paid.
Importantly, the only way you can guarantee that your ex does not try to make financial claims against you in the future is to get a court order.
It must set out the financial arrangements and state that there is to be a clean break.
Paying a lump sum to get a clean break
In some cases, there is enough money to “buy out” the financially weaker person’s maintenance claim.
This is done by calculating a sum of money that that person can then invest and receive an income from instead of receiving maintenance payments.
If you’re thinking about doing this, get advice from a family law solicitor as this is a complex area.
A lump sum payment doesn’t have to be paid in one go, although it often is. It can be paid in more than one instalment.
For instance, a part payment when the court order is made (or very soon afterwards), followed by other payments when the house is sold.
Any lump sums which are payable in the future potentially run the risk of having changes made to them. Take specialist legal advice if you think this might affect you.
In Northern Ireland, it is important to remember that to “buy out” a maintenance claim requires both you and your ex to agree to this. In England and Wales, the court can impose a “buy out” on you.
What is spousal maintenance?
This is a regular payment made by a former husband, wife or civil partner to their ex-partner.
It’s only paid where one partner can’t support themselves financially without it.
The amount you receive would depend on:
- How much you need to live on;
- How much income you already have; and
- How much you could potentially earn in the future
When is spousal maintenance paid?
If the marriage or civil partnership is short (typically, less than five years), it might not be paid at all or only for a short period through what’s called a ‘term order’.
But where a couple has been together for a long time, or where an ex-partner is unable to work, it can be paid for life.
In legal language, it’s on a ‘joint lives’ basis, which means either until the person paying maintenance or the one receiving it dies.
However, spousal maintenance on a joint lives basis is increasingly rare.
When does spousal maintenance stop?
It usually stops if:
- The payment term ends;
- You or your ex-partner die, or
- The person receiving spousal maintenance remarries or enters another civil partnership
It doesn’t necessarily stop if they live with a new partner without marrying or entering a civil partnership, although the person paying it could use this as a reason to apply to the courts to get the amount reduced.
Insuring spousal maintenance payments
If you receive spousal maintenance, you should consider insuring the payments so that you continue to receive an income if your ex-partner were to die.
To do this, either you or your ex-partner can take out a life insurance policy on their life.
It need not be expensive and the policy can provide a lump sum or monthly payments if they were to die while you were still receiving spousal maintenance.
Your next step
This article is provided by the Money Advice Service.