Splitting assets on divorce can go one of two ways. Everyone walks away satisfied or feeling like they’ve been short changed. The division of assets following divorce often increases the animosity between couples parting ways. Cases tend to end up in Court for a judge to decide. Here’s how they decide who gets what.
Family court judges have a wide discretion when splitting assets on divorce. Why? Because divorcing couples will no doubt have very different opinions about what’s fair when dividing assets.
Every case is different, which makes deciding who gets what even more problematic. Generally, here’s how the Courts will decide to divide assets.
Splitting assets on divorce… the Court process
Step #1
The Court will consider all the circumstances of your case, plus any factors under section 25 of the Matrimonial Causes Act 1973 – a key piece of legislation which governs financial settlements following a divorce.
Step #2
The Court will use a 50/50 split of matrimonial assets as a starting point.
Step #3
If an equal split is not in the interests of fairness – in some cases, the equal division of assets is not appropriate – the Court can depart from equality if there is good reason to. This means the Court can issue a different Order when dividing assets.
While this is the general process the Court will follow when splitting assets on divorce, there are mitigating factors that will have a impact on what the judge decides, including:
- Roles in the relationship
There must be no discrimination from the Court concerning the respective roles of each party. For example, if one party was the sole breadwinner and the other is a homemaker, each role must be seen as equal by the Court.
- Dependent children
If a Court ruling will have an impact on any dependent children as part of splitting assets on divorce, then first consideration must always be given to the needs of the children.
- The needs of both parties
The Court will always aim to meet the needs of both parties – ensuring that housing and income needs are met as a minimum. If these needs can be met by available assets, and there is surplus, the Court will consider the origin of certain assets to decide how to divide what’s left.
This will include matrimonial assets – meaning those acquired jointly during marriage – and non-matrimonial assets – which are those acquired outside the marriage, whether before, post-separation or during marriage by way of a gift or inheritance.
If unequal contributions have been made to the matrimonial pot by way of assets being pre-matrimonial, then this will also be taken into consideration by the Court. However, this is rare, as it’s more often the case that there’s not enough to meet the needs of both parties in the first place.
Clean Break Order
Where appropriate, the Court is obligated by statute to consider a Clean Break Order. If a Clean Break Order is not achievable – due to one party having unmet needs, the Court can issue a Spousal Maintenance Order for a fixed period – or in rare circumstances, indefinitely – therefore deferring the Clean Break Order.
However, Spousal Maintenance is always a variable if circumstances change in the future. Equally, achieving a Clean Break Order does not mean that child maintenance isn’t payable.
