One of the most common fears and anxieties when a couple divorce is how the marital assets will be divided and whether they will be able to manage financially after separation, particularly where there is only one main breadwinner. This article deals with some frequently asked questions and provides an insight into how marital finances are dealt with by the Court.

Factors the Court will consider

The objective of the court when making this decision is to achieve a result that is fair and non-discriminatory. The starting point, regardless of the length of the marriage, is always 50:50 and the overriding factor in most cases will be the reasonable needs of the parties.

The court must, however, have regard to all the circumstances of the case, the first consideration being given to the welfare of any minor child of the family. They must also specifically consider the following:

  • The income, earning capacity, property, pensions and other financial resources which each party has or is likely to have in the foreseeable future;
  • The financial needs, obligations and responsibilities which each party has or is likely to have in the foreseeable future;
  • The standard of living enjoyed during the marriage;
  • The ages of the parties and the length of the marriage;
  • Any physical or mental disability that either party has;
  • The financial or other contributions which each party has made or is likely to make in the foreseeable future;
  • The conduct of each of the parties if that conduct would, in the opinion of the court, be unfair to disregard; and
  • The value to each party of any benefits that they may will lose the chance of acquiring.

When taking these factors into account an equal split of the assets may not be fair or it may cause one party financial hardship. In those circumstances the court can decide to deviate from the equality rule. Examples include where an equal split in capital would result in one party not being able to meet their housing needs or where one party has made such a significant financial contribution to the marriage by their own endeavours that to share all of this would be unfair.

Will I have to pay maintenance? 

There is an expectation that each party will aim to maximise their ability to earn or receive an income on divorce even if that means seeking employment for one party who had never worked during the marriage. If there are young children, or if the parties are much older, then this may not be possible and there may be a need for one party to pay the other maintenance either for a fixed period of time (usually until the youngest child reaches a certain age) or, more rarely, in older couples, for their joint lives.

There is no ‘formula’ that determines how much maintenance will be paid in such cases; the court tends to apply a broad brush approach looking at the reasonable needs or requirements of each party and the income that is available.

What if only one of us has a pension?

Most working people these days are likely to have some form of pension provision whether that is through their employer or paid privately. Despite this fact many divorcing couples remain unaware that, like other assets of the marriage, pensions can also be shared equally. This may be a key asset for older couples approaching retirement, particularly where there was one main breadwinner who earned and saved for the family. The sharing of pensions can be a complex area and seeking the right advice is essential.

But I acquired some of my assets before the marriage…

Generally, assets that one party owned prior to the marriage such as property or investments will fall outside of the marital request. However, the court can include assets that were subsequently used for the family within the pot to share. The court also has a discretion to include such assets where not to do so would mean that there are insufficient financial resources to meet the parties needs.

…and my inheritance?

Inheritance (or gifts) are considered non-matrimonial property and can be ring-fenced or set apart from the assets of the marriage especially if acquired before marriage or after separation. However, there are circumstances where they may not be excluded, for example, if the value of the marital assets are insufficient to meet both parties needs.

Can I protect my assets from my spouse on divorce?

There are a number of ways legitimately to protect various assets from falling into the marital pot for distribution on divorce. These include pre-nuptial and post nuptial agreements and deeds of trust. If properly prepared then these documents fall within the category of ‘factors’ that the court must take into consideration when deciding division and, provided they are fair, they are likely to be upheld by the court.

Need advice?

Understanding how the court might approach your circumstances could alleviate any anxieties and help you to decide your next steps. Taking legal advice may be essential in ensuring that you receive a fair share of the marital assets.

Zharna Sutaria heads the Family Team at Vyman Solicitors. She is a Law Society accredited specialist and a member of Resolution meaning her focus is on achieving an amicable settlement whenever possible. Please contact her on 020 8429 1010 or if you would like to discuss how she may be able to assist you.