There are lots of myths around what happens when a couple divorce. In this article specialist divorce and finance lawyer Shreya Kallingal explains why matrimonial finances cannot always be split equally.
Matrimonial Finances – section 25 Factors
Any discussion on matrimonial finances hinges on what is called the ‘Section 25 factors’ and it is helpful for anyone involved in a matrimonial finances dispute to be familiar with the same. The Section 25 factors provide that a Court (and therefore the law) will have to consider the following questions in deciding how the matrimonial finances/assets should be dealt with:
- What are the needs of parties? If there are children, how can their needs be met?
- What are the financial resources of each party (i.e. income, earning capacity, assets now and in the reasonable future)
- What was the standard of living of parties before the breakdown of marriage?
- How old are the parties and what is the duration of their relationship ?
- What contributions did each party make to the marriage and what are they likely to make in the foreseeable future?
- What has been the conduct of parties during the marriage, and is it conduct that the Court should not disregard?
- What is the value of benefits lost by the disadvantaged spouse because of the divorce?
Questions you and your divorce lawyer need to consider
A divorce lawyer will be able to advise you on the many nuances of the criteria above as this requires an understanding of case law and the particular facts of your case. Some questions that require further consideration would include:
- What exactly constitutes ‘needs’ of parties?
- What assets are ‘matrimonial’ and which are ‘non-matrimonial’ and how should they each be treated?
- What if one party had moved in with a new partner and has more financial resources available to them?
- What meets the threshold of ‘bad conduct’ in a marriage for the purposes of deciding a matrimonial finances dispute?
- Should the rules of division of assets be treated differently for long marriages and short marriages? What about a situation where parties cohabited for 10 years and have been married for only 2 years?
The purpose of asking these questions, is for parties and the Court to consider what financial outcome from division of assets is truly ‘fair’.
Every marriage and every divorce is different
Everyone’s situation will be different. In many cases, the difference in parties’ circumstances and their personal objectives may suggest that a hasty 50/50 split on assets would not be the fairest outcome.
Perhaps one-party needs more than 50% of the family home as they don’t have a high enough income to get the mortgage they need to suitably rehouse. Maybe there has been a lot of financial abuse through the marriage which depleted the poorer spouse’s financial resources unfairly. It may also be the case that the spouse that was the home-maker will need ongoing financial support for a period after the divorce to help them transition to independent living. Sometimes there may be an order for the children to live with only one parent and therefore one spouse needs a bigger property than the other to meet their needs.
With so many factors at play, emotions often running high, and a breakdown of trust, taking legal advice about potential outcomes and having legal assistance through the dispute resolution process (whether through Court, mediation or negotiations) will empower you to advocate for yourself and work towards a fair outcome.
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