Every marriage and divorce is different. There are no hard and fast rules regarding division of assets on divorce. When dividing assets the Court, and solicitors will take account of various factors when advising their clients. These are known as Section 25 factors (Section 25 of the Matrimonial Causes Act 1973).
These factors are:
- Income and earning capacity, property and other financial resources that each spouse has or is likely to have in the foreseeable future.
- The financial needs, obligations and responsibilities, which each spouse has or is likely to have in the foreseeable future.
- The standard of living enjoyed by the family before the breakdown of the marriage.
- The ages of each spouse and the duration of the marriage.
- Any physical or mental disability of either spouse.
- The contributions that each spouse has made or is likely to make in the future to the welfare of the family.
- The conduct of each spouse, if that conduct is such that it would be unfair to disregard in the opinion of the Court.
- The value to each spouse of any benefit that one spouse would lose because of the divorce.
However, the first consideration before looking at any of these factors will be the welfare of any children of the family. Although not seen as the most important factor, it is the first factor any Court will look at.
The Court also considers two other principles.
- Sharing: the Court sees marriage as a partnership and the fruits of that partnership should be shared.
- Compensation: the Court will look at the way in which financial affairs were managed during the marriage as a result of which one spouse may have lost out the chance of accruing assets, income or pension provision and should therefore be compensated for it.
Unfortunately, the law as it stands creates uncertainty as to the outcome of any financial settlement. The Court will balance each spouse’s claim with reference to the above factors.
To enable us to consider your options with you we will need you to gather information on your own financial position and your knowledge of your spouse’s financial position. Bear in mind that you and your spouse will have pension provision and investments in your own name. Depending on the length of the marriage, these are viewed as marital assets.
With regard to the home, the Court will take into account the need for any minor children of the family to have suitable accommodation for themselves and the resident parent. However, if your home exceeds yours and the children’s needs, a sale may well be considered. There are various options when it comes to the house, including selling it and splitting the proceeds; transferring the home to one person; or keeping the home until a specified event such as a child reaching the age of eighteen or finishing full time education.
Divorce is likely to have an impact upon any business if either spouse owns one. A business is considered to be as much of an asset as the matrimonial home. In coming to a settlement, the Court will consider the value of the business together with all the other family assets.
For more information on how your assets will be split, watch our “Resolving Financial Issues” video here.