Divorce and finances

Outside of the legal profession, many people presume that, in a divorce, couples will have to split their assets equally (50:50.) However, this is not always the case, as every divorce is different and financial decisions can vary according to a number of different circumstances.

The starting point for any financial settlement is to establish what is fair for both parties. Many couples are able to reach a financial agreement by themselves but a solicitor can help to convert this into an order suitable for the courts.

However, if neither party is able to reach an agreement then the courts may be asked to decide for them; taking into account the three main principles of sharing, needs and compensation, to come to a suitable decision.

Sharing

When a couple is joined in matrimony, they make a lawful commitment to share each other’s lives. The courts view this marriage as a legal partnership and dependent on the circumstances, they will try to divide assets as equally as possible. But other principals can also affect the final balance.

This could include your former marital home, pensions, cars, house contents, debts, mortgages, loans, credit cards, and any growth in assets since separation, known as matrimonial assets.

Some things are exempt and properties brought into marriage through inheritance for example might be exempt from the rules and classed as a non-matrimonial asset.

Needs

Commonly the decisive factor in a court’s decision - the needs principle relates to how both parties will manage after a divorce, for example their income and housing needs.

Income needs are bills and expenditures and housing needs are the costs of your property whether owned or rented.

Compensation

Not always applicable, the compensation principle deals with any party which may have given up a career to look after dependants for example, in the case of a house husband or house wife.

Children 1

The needs of children are paramount to a decision and will always come first and ahead of other principles of sharing and compensation. The number of your children as well as their ages, residency plans, educational plans all act as parameters.

A Clean Break

Whenever possible, the court will try and achieve a clear financial separation between the two parties, known as a “clean break.” This means no on going financial ties aside from child maintenance, if applicable. If this is not possible, then the court may also be able to order spousal maintenance, permanently or for a fixed period of time.

Factors the court take into account

· Your standard of living during marriage

· How much you both earn

· Financial commitments

· Your age

· The length of the marriage

· How much money you require to meet your needs

· Contributions you have made to the family

· Your health, any disabilities etc.

Some people find that the hardest part of filling out forms and reaching financial agreements isn’t the complicated process but that in such an emotional period of their lives it can be difficult to concentrate. A lawyer can guide you through this process and help to put to bed any worrying questions you have.

Read more about our services for divorces, separations and other family matters:

Agree? Disagree? Do let Cooks Solicitors know what you think by commenting below.

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