How do the Courts decide on how to split your assets and income on divorce.
Discussing the division of assets on divorce…
Therefore when we are considering your case we look at these, how they apply to your case and how legally the family courts have interpreted them in the past in circumstances similar to your own.
Welfare of any child(ren) of the family
Before looking at these factors, the court first considers the welfare of any child(ren) of the family under the age of 18.
Thereafter they take into account the following
Factors taken into account on divorce
- The capital and income resources available to the parties, either existing or reasonably foreseeable. This is therefore why parties are required to disclose their assets and income and evidence of them has to be filed in court. All assets also have to be valued.
- Details of the financial needs of the parties, including:
- their standard of living;
- their ages and the length of the marriage; and
- any disabilities.
- The court also considers the following additional factors:
- the respective contributions of each party;
- the conduct of each party (although only in exceptional cases); and
- any benefit either party will lose as a result of the divorce (such as a spouse’s pension).
Division of parties’ resources
It is against this backdrop that Judges are asked to decide how these factors should apply in your case and different judges may reach a range of different solutions on identical facts, all of which would be within their judicial discretion. However, a line of cases has established a standard approach to the way the courts consider a given set of facts. We look at these and give you advice on how we believe the law would make a decision in your case if we are able. Where there are a range of possible solutions we will advise you of those.
The starting point is that assets accrued during a marriage are divided equally, and the guiding principles applied are ”equal sharing”, ”needs” and ”compensation”. The matrimonial home is normally considered a matrimonial asset, so is divided equally between the parties even if it was owned by one of them before the marriage.
Where equal division of resources adequately meets the parties’ needs
Where an equal division of all assets accrued during the marriage adequately provides for the capital and income needs of each party and any children, then this is usually then the appropriate financial outcome.
Where equal division of resources cannot meet the parties’ needs
Where the needs of the parties and any children cannot be met by an equal division, an unequal division of resources may be appropriate instead and may be the outcome that is most likely.
Often in these cases the needs of parties then dictate how the capital and income are divided. The courts will look at assets that one party might have inherited or have introduced to the marriage and the courts may form the view that it is irrelevant that they came from one party or another, where possible they may try to ensure that a party who inherited or introduced a particular asset retains it as part of the resources to meet their own needs but this could mean that as a result the other party may be allocated a larger share of the matrimonial assets.
In some cases the court will order that there is a reallocation of assets in the future with this being achieved by one party having an interest in the matrimonial home which will only be realised once the children finish their education which is usually classed as first degree level.
It isn’t therefore clear in all cases what the outcome will be and requires careful negotiation with the other party. Where the relationship involves children this can be difficult. We have skilled negotiators one of which is also a trained collaborative lawyer.
Whilst where possible the courts will try to achieve a clean break between the parties on divorce so that they are no longer financially dependent on one another this may not always be possible and the court can be asked to look at one party paying ongoing maintenance to another or alternatively one party paying a bigger sum to achieve a clean break in lieu of maintenance.
Any maintenance order usually ceases when the person receiving the monies dies or remarries or there is further order of the court because for example a parties circumstances have changed.
We often advise on the appropriateness of an order for maintenance and the amount, and where necessary where the divorce is causing financial hardship on whether one party should apply or defend an application for an interim maintenance order.
The courts don’t though simply order maintenance in all cases, they will look at what the needs of the party asking for maintenance are and, they will be expected to provide a budget and, the courts will look at their earning capacity. They will also look at what sort of standard of living was experienced during the marriage and the other party’s ability to pay
What if one parties contribution to the matrimonial assets is higher?
Where this arises from exceptional efforts by one party that are greater than the contribution of the other, the court may provide the other party with a less than equal share to reflect this. However, special contribution arguments rarely succeed.
The sharing principle does not apply to property that is inherited or introduced by one party during the marriage. The exception is where such property has become part of the matrimonial assets, for example, by being put into joint names or converted into a different type of property enjoyed by the family (such as an inherited picture sold and used to buy a holiday home).
If assets are largely non-matrimonial, needs are likely to be the determining factor and are generously interpreted. The courts will also look at whether one party has been disadvantaged by for example giving up a lucrative career to look after the children of the marriage.
Child maintenance is decided entirely separately from the above. The Child Maintenance Service (CMS) has primary jurisdiction for assessing and enforcing child maintenance we can assist with this although the application is usually made direct to them. It is possible for the parties to agree child maintenance between themselves and have the agreement set out in a consent order.
Also a court does have authority to look at specific aspects of child maintenance and can make orders for the benefit of a child other than for maintenance such as lump sum orders, property adjustment orders and settlement of property orders. We can advise on bringing or defending these claims.