The process of dissolving your marriage can already be an unsettling, stressful, and difficult time. Dealing with financial considerations on top of the emotional aspects of divorce can add to these feelings. However, disentangling your assets is a crucial part of the separation process.
In this article, we’ll outline some of the financial orders that family courts can make, including Lump Sum Orders and Periodical Payment Orders. We’ll also explore the factors that courts take into consideration when determining these orders and how our divorce solicitors can help ensure a fair and sustainable financial settlement.
Lump Sum Orders
A Lump Sum Order is a court order that requires one party to pay the other a sum of money, typically in a single payment. This order is commonly enforced when there are significant assets involved, such as property, investments, or business interests.
Most often, this order is applied in cases where one party retains ownership of the family home while the other moves out. In this scenario, the property would be transferred into the remaining person’s name, and they would pay a lump sum, typically equivalent to the other party’s share of the property value.
Lump Sum Orders can also be used to balance financial settlements, such as compensating for disparities in pension entitlements, covering legal costs, or settling joint debts to provide financial closure. The court will assess various factors before granting such an order, including the financial needs of both parties, their respective contributions to the marriage, and their future earning potential.
Periodical Payment Orders
Periodical Payment Orders, also commonly known as Maintenance Orders, require one party to make regular payments to the other following divorce. These payments are typically made on a monthly basis and can be ordered for a fixed term or until certain conditions, such as remarriage or retirement, are met.
The two types of Periodical Payment Orders are:
Spousal Periodical Payments
Spousal maintenance is designed to provide financial support to a spouse who is in a weaker financial position post-divorce. This may occur when one spouse has surplus income after meeting their own living expenses, while the other requires additional support due to a lower earning capacity.
There are several reasons why a financial imbalance may exist. One spouse may have sacrificed career opportunities to care for children, or they may have relied on the other’s income throughout the marriage. In such cases, the financially stronger spouse may be ordered to make ongoing payments to help the other maintain a reasonable standard of living.
Courts will consider factors such as the length of the marriage, the recipient’s ability to become financially independent, and the standard of living enjoyed during the marriage before determining the amount and duration of spousal maintenance.
Child Periodical Payments
Child maintenance is specifically intended to support the living expenses of children after a divorce. These payments are typically made by the parent who does not have primary day-to-day care responsibilities to the parent who does, ensuring that the child’s needs are adequately met.
The amount of child maintenance is usually determined by statutory guidelines, but courts can intervene in complex cases where additional expenses, such as education and healthcare costs, need to be addressed. These payments are vital in ensuring that children do not experience financial hardship as a result of their parents’ separation.
In some cases, both Spousal Periodical Payments and Child Periodical Payments may be combined into what is known as a Global Periodical Payment, providing a single structured payment for both needs.
