Going through a divorce can be one of the most challenging experiences of your life. Not only are you dealing with emotional strain, but there are practical matters that need to be resolved too. One of the most complex and often contentious issues in divorce is how to divide your assets. You might think that the assets should just be split equally—50/50—but that’s not always the case. In fact, there are many factors that come into play, and the process can vary depending on your unique circumstances.
In this article, we will walk you through how assets are divided in a divorce, what the court considers, and what options you have. We aim to provide you with the information you need to understand the process better, so you can make informed decisions during this difficult time.
Understanding the Divorce Process
Dividing assets in a divorce is not as simple as just splitting everything down the middle. The court follows guidelines and considers a number of factors to ensure the division is fair. In the UK, the Matrimonial Causes Act 1973 is the key piece of legislation that helps the courts decide how to divide assets. However, the law is flexible, and every divorce is unique, so the division depends on your specific situation.
In many cases, the starting point is a 50/50 split. However, that doesn’t always mean that this is what will happen. There are circumstances where one spouse might receive more or less, depending on their individual needs and contributions during the marriage.
Factors the Court Will Consider
When deciding how to divide assets, the court looks at various factors. Here are the main things that will influence the division:
Income and Earning Capacity
The court will consider both parties’ income and earning capacity, both now and in the future. If one spouse has a higher earning capacity, the court might decide that they should receive a larger portion of the assets to balance out the division. For example, if one partner has stayed at home to care for the children while the other has worked full-time, this will be taken into account.
Financial Needs and Responsibilities
The court will also assess the financial needs of each party, especially if there are children involved. If one spouse is unable to support themselves due to a disability, a lower earning capacity, or childcare responsibilities, the court may adjust the division of assets to meet their needs.
Standard of Living
Another consideration is the standard of living enjoyed by the family during the marriage. If one party has been used to a certain lifestyle, the court may aim to maintain that standard, to some extent, after the divorce. However, it’s important to note that the court aims to be fair, not necessarily to maintain the same standard of living for both parties.
Duration of the Marriage and Age
The age of both parties and the length of the marriage are also key factors. If you have been married for many years, the court is more likely to divide the assets more equally. In shorter marriages, the court may favour the spouse who has contributed more to the financial wellbeing of the family.
Contributions During the Marriage
Contributions aren’t just financial. The court will also consider non-financial contributions, such as looking after the children or taking care of the home. These contributions are just as valuable in the eyes of the law, and the court will aim to make a fair division based on what each party has contributed.
The Welfare of Children
If there are children under the age of 18, their welfare is the court’s primary concern. This means that the court will consider how to ensure that the children’s needs are met first, before dividing the assets. Often, the parent who will have primary care of the children may be given the family home or more financial support.
How Are Assets Divided?
The court will aim for a fair and reasonable division of assets. In some cases, that may mean a 50/50 split, but it is not a rule. The division can vary depending on the factors listed above. Here are some of the main assets that will need to be divided:
The Family Home
For many couples, the family home is the largest asset, and it can be a point of major contention. There are three main options for how the home can be dealt with in a divorce:
- Sell the house: This is often the simplest solution. The house is sold, and the proceeds are divided between both parties. This gives each person access to their share of the asset and helps them start afresh. However, if the house is recently purchased or the market is not favourable, selling might result in a financial loss.
- Buyout: If one party wants to keep the home, they can buy the other spouse’s share. This may involve getting a mortgage refinance or adjusting the existing mortgage. This option allows one spouse to stay in the home and offers a clean break, but it might be difficult if one spouse is unable to afford the buyout.
- Continue co-owning: In some cases, it may be practical to continue co-owning the home temporarily or long-term. This can happen if the couple has recently purchased the home, and neither can afford a buyout or a sale. However, this option doesn’t provide a clean break and can be tricky if both parties need to move on with their lives.
Pensions
Pensions are often overlooked in divorce settlements, but they are considered a matrimonial asset. The court may decide to split pensions to ensure both parties have financial security. This can be done through a pension sharing order, where the pension is divided and a portion is given to the other spouse.
Savings and Investments
Savings accounts, stocks, bonds, and other investments are also divided as part of the divorce settlement. The court will consider each party’s contributions and financial needs when deciding how these assets should be split.
Debts
Debts, like mortgages or loans, will also be divided in a divorce. If one spouse is responsible for more of the debt, this may impact the division of other assets. For example, the court might reduce their share of the assets to account for the debt they are responsible for.
What Happens with Children?
When there are children involved, the court aims to protect their welfare first and foremost. The parent who has primary care of the children may be awarded the family home or extra financial support to ensure the children’s needs are met.
However, just because one parent is awarded the home doesn’t mean the other spouse’s rights are erased. Even if one spouse moves out of the house, they may still have financial ties to the property. In some cases, the court may issue a Mesher Order, which allows one spouse to remain in the home until a certain time (e.g., when the youngest child turns 18). At that point, the house would be sold, and the proceeds divided.
What About Non-Matrimonial Assets?
Non-matrimonial assets are assets that were owned by one spouse before the marriage or after separation. These assets are not usually divided, but there are exceptions. If the matrimonial assets aren’t sufficient to meet one spouse’s needs, the court may decide to include non-matrimonial assets in the settlement.
For example, if one spouse owned a property before the marriage, but the family then lived in it, the court may decide to divide the property in the divorce settlement. Similarly, if one spouse started a business before the marriage, but the business generated income that was used to support the family, the court may include the value of the business in the division.
How Can Pre-Nuptial Agreements Help?
While pre-nuptial agreements are not legally binding in the UK, they can be persuasive in divorce settlements. If you and your spouse had a pre-nup in place, the court will consider it when deciding how to divide the assets. It’s important to note that the court will always put the welfare of children first, and the pre-nup will not override the needs of any children involved.
What if You Can’t Agree?
If you and your spouse can’t agree on how to divide the assets, you can seek mediation or go to court. Mediation can be a less costly and less stressful way to resolve your issues without going to trial. However, if you can’t come to an agreement through mediation, the court will have to decide.
Conclusion
Dividing assets in a divorce is a complicated process, and the court will take many factors into account when making its decision. While the starting point might be a 50/50 split, the final division will depend on your unique circumstances. It’s important to remember that the court’s primary concern is fairness, and that means ensuring both parties’ needs are met, especially if there are children involved.
Going through a divorce is never easy, but understanding how assets are divided can help you navigate the process with more clarity. Make sure to consider all the factors involved and seek professional legal advice to ensure you are treated fairly during this difficult time.
