How Assets are Divided in Divorce
There is no set formula when it comes to dividing matrimonial financial assets in divorce. Ultimately, the aim is to reach a ‘fair and reasonable’ financial settlement for each person. This won’t necessarily be a 50/50 split of assets. It all depends on your individual circumstances.
Splitting assets in divorce requires careful negotiation because your financial position in the future depends on it. The aim is to achieve a settlement that will last for years; not just the next few months once your divorce goes through. Our specialist team of Divorce Solicitors can advise you based on your circumstances and work hard to get you a fair and reasonable divorce settlement.
For initial advice get in touch with our Divorce Solicitors.
How Assets Will Be Divided
There are lots of misconceptions about how assets are divided in divorce. Some people think there will be a 50/50 split. Others worry that they’ll lose everything to their ex-partner. Neither assumption is entirely accurate. The fact is that when it comes to the division of finances following divorce, it all depends on the circumstances.
The starting point is who makes the decision – can you and your ex agree how to divide your assets? Or are you going to need a Judge to decide in Court?
When You Agree How to Divide Your Assets
Some divorcing couples can agree how to split their money, property and other assets. This decision might not come easily. If you need help, one of our Divorce Solicitors can negotiate on your behalf. Or, you can attend Mediation, where an impartial mediator will help you reach an agreement (with you and your ex in different rooms if required).
However, it’s vital that you get expert legal advice before committing to anything. Our Divorce Solicitors can advise whether any proposed agreement is fair, and whether your legal rights have been met. If you reach an agreement on splitting your assets, you can apply to court to make the agreement legally binding with a Consent Order. It is important to realise the Court can reject your agreement if the judge reviewing it assesses to to be unfair or unreasonable and order a revised financial settlement.
When the Court Decides How to Divide Your Assets
If the Court rejects your divorce financial settlement, or you cannot agree how to divide your assets, then a Judge must decide instead. The outcome will then be turned into a Financial Order by the Court.
Usually, the starting point is a 50/50 split of assets. The Judge will then assess whether there are any factors that should alter this position. Often, the greatest influence is whether or not you have children still in full-time education. If so, priority is given to their needs. This can sometimes mean the primary caregiver may be awarded a greater share of assets, or be allowed to stay in the family home.
Along with the needs of any children, a Judge will also consider things like:
- Your age
- Your earning capacity
- The length of your marriage
- Your role in the marriage – for example, how much you each contributed to the welfare of the family
- The financial needs of you and your ex
- Any physical or mental disabilities you or your ex may have
Therefore, if you have been married for a short time, have no children and have roughly the same earning capacity, the division of assets will likely be straightforward. On the other hand, if you have been married for 20 years and one person sacrificed their career to raise a family, the division of assets may not be equal as their needs will still have to be met.
Ultimately, the Judge’s aim is to ensure a fair and reasonable divorce financial settlement for each person, and to meet the needs of any children involved.
What Assets are Included in Divorce?
You may be wondering whether any assets are excluded from the marriage pot. The Courts have wide-ranging powers to split your assets. Certainly, this covers assets you have built up over the course of your marriage. These are known as matrimonial assets and include:
- The family home
- Other properties you both own
- Businesses you own together
- Household furniture
Non-matrimonial assets could include an inheritance you received before getting married, or your business if you owned it before the relationship started. Sometimes the Court will decide to exclude these things if they think it’s fair or if both your needs can be met without them. But, the starting point is that all assets of the marriage, regardless of when or how they came about will be considered by the Court before it reaches its decision.
For initial legal advice call our Family Law and Divorce Solicitors
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