The starting point when looking at the division of assets on divorce is Section 25 Matrimonial Causes Act 1973.
This sets out that the first consideration of the court will be any child of the family who is not yet 18. It then goes on to set out a checklist of factors which the court must have regard to as follows:
(a) the income, earning capacity, property and other financial resources which each of the parties to the marriage has or is likely to have;
(b) the financial needs, obligations and responsibilities which each of the parties to the marriage has or is likely to have;
(c) the standard of living enjoyed by the family before the breakdown of the marriage;
(d) the age of each party to the marriage and the duration of the marriage;
(e) any physical or mental disability of either of the parties to the marriage;
(f) the contributions which each of the parties has made or is likely in the foreseeable future to make to the welfare of the family, including any contribution by looking after the home or caring for the family;
(g) the conduct of each of the parties, if that conduct is such that it would in the opinion of the court be inequitable to disregard it (this is not usually taken into account).
But what does that mean?
The difficulty can be deciphering what that means in practice and how it applies to each individual case.
The reality is that needs will often “trump” a number of the other factors including, for example, the fact that one party may have brought more into the marriage than the other.
There is no formulaic approach in family law in England and Wales it is very much dependent on the circumstances of the case.
Capital, pensions and income
The court has the power to make order about how capital is to be shared (including property and business assets), how pensions may be shared and whether there should be monthly payments from one party to another.
Often these different components will fit together like a jigsaw puzzle. For example, if one party earns less than the other, they could have a claim for monthly payments, however if they were to receive the lion’s share of the capital their mortgage payments on rehousing might be much lower and this would offset that claim.
Similarly, one person may want to keep their pension whilst the other person keeps the family home.
Isn’t it 50/50?
There is no legal presumption of 50/50 though there is often an exercise of looking at what sharing matrimonial assets equally might look like and whether that would meet needs and be fair in the circumstances.
It is a complex area and therefore it is very important that you take your own independent legal advice before entering into any agreement with your spouse.
If you have any questions about dividing assets on divorce, please do not hesitate to contact one of our specialist divorce and finance team.
