There are four main types of order that the court can make.
Maintenance orders
These order that one spouse pays maintenance (periodical payments) to the other spouse. These orders are comparatively rare, as the court will try wherever possible to achieve a clean break (see above). Spousal maintenance orders generally fall into one of three categories:
• Long-term orders, possibly lasting for the rest of the payer’s/ recipient’s life. These are usually made where one spouse is financially dependent on the other spouse and is unlikely ever to achieve financial independence. For example, after a long marriage where the recipient spouse is unable to work due to age or disability.
• Short-term orders, designed to last long enough to enable the recipient spouse to establish (or re-establish) their financial independence. These may last, for example, for a period of two years.
• Nominal orders, whereby one spouse pays a purely nominal sum (say, five pence per annum) to the other spouse. The purpose of such orders is to leave open the possibility of the recipient spouse applying to the court at some point in the future for the maintenance to be increased, should their circumstances change (that is, no clean break). These orders are favoured by many district judges where there are minor children – the court will make a nominal maintenance order in favour of the party looking after the children, with the
order lasting until the children grow up/finish education. The idea here is that the order enables the court to award maintenance to that party should circumstances require this (for example, that party losing their job), the court having no power to make a child maintenance order because of the child support system.
Note that the amount of a maintenance order is not fixed in stone – it can be varied (upwards or downwards) at any point in the future, should there be a change in either party’s circumstances. It is also possible to have the amount of the maintenance index-linked, so that, for example, it automatically changes each year in line with the Retail Prices Index. An example of index-linked maintenance (for children) can be found in paragraphs 6 and 7 of the example separation agreement in Appendix 1.
Maintenance for a spouse will always end when either spouse dies (although if the payer dies then the recipient can usually make a claim against the payer’s estate), or when the recipient spouse remarries (note that the recipient spouse cohabiting with another person does not automatically end the maintenance, although it may be grounds for it to be reduced, possibly to a nominal amount). Otherwise, the maintenance will last as long as the order specifies or until the court orders otherwise.
One final point on the subject of maintenance, and it applies to the entire financial/property settlement. Contrary to popular belief, the law does not favour husband or wife. The fact that most spousal maintenance orders are in favour of wives is simply due to the fact that wives are more often financially dependent upon husbands, and more often the primary carers for any minor children.
Lump sum orders
These order that one spouse pay a lump sum of money to the other spouse, whether in one go or by instalments. As mentioned below, the order may be connected with an order requiring the recipient to transfer their interest in property, in particular the former matrimonial home, to the payer.
Property adjustment orders
These are, literally, orders adjusting the ownership of matrimonial property. Most commonly relating to the matrimonial home, a property adjustment order can, for example, alter the parties’ shares in the property from 50/50 to 60/40 or whatever proportions the court considers appropriate. The court can even order one party to transfer their entire share in the property to the other party, possibly in return for a lump sum. If necessary, the court can also order a sale of property, so that the respective shares of the parties can be realised. Where one party needs to stay in the property, for example so that they can remain there with the children, the court can also order a sale at some point in the future, such as when the children have grown up or when the party in the property remarries or cohabits with another person.
Pension orders
There are two types of pension orders that the court can make: pension attachment orders and pension sharing orders. A pension attachment order will state that one party will receive part of the other party’s pension when the other party receives it. These orders are not very satisfactory, as the receiving party has to wait until the other party takes their pension, and so they are now quite rare.
A pension sharing order, on the other hand, takes effect immediately (or as soon as it is implemented by the pension provider) and means that one party will receive all or part of the other party’s pension, by way of a transfer of all or part of the pension fund into a pension in the receiving party’s name. Note that this does not mean that the receiving party will get a lump sum of money from the other party’s pension provider – they will just get a credit paid into their pension (they may have to set up a new pension for this purpose) and they will not receive any money themselves until their pension comes into payment. The same 50/50 starting-point applies to pension sharing, although it is arguable that any proportion of the pension that was accumulated prior to the marriage should be left out of account. Lastly, note that most pension providers will charge a fee for implementing a pension sharing order and this will be payable by the holder of the original pension, unless agreed/ordered otherwise.
There is, in fact, a third way of dealing with pensions and this is usually referred to as ‘offsetting’. Under offsetting, the party with the pension will keep the pension, with the other party being compensated by receiving a greater share of other assets. Obviously, offsetting is only an option where there are other assets of similar value available.