Are assets always split 50/50 on divorce?
There is no set formula when it comes to splitting assets on divorce but people often think that all the assets are shared equally.
The process relating to how assets are divided on divorce is a skilled and complex task. In mediation we take a couple through all the issues that need to be considered as part of reaching a financial agreement.
Although the starting point for sharing assets might well be 50/50 there are a number of circumstances that can alter this division. Some examples are:
1. Where the parties owned assets before they commenced their relationship they may not have to share them 50/50. It will depend on the circumstances of the case and the needs each party has in moving forward after the divorce
2. Sometimes, inherited or gifted assets received during a marriage, aren’t shared equally
3. If a spouse has needs that require a greater share of the assets to meet those needs this can also alter how the assets are divided
4. Sometimes, there can be something called a “stellar contribution”, this is where one party has generated a vast fortune from his or her own unique skills and endeavours. This will often impact on how the assets and what assets are shared
5. If a couple have had the benefit of a money from a family trust during their relationship, that trust and how it should be treated will require careful consideration.
6. Where there is a need for ongoing spousal maintenance, this can be capitalised into a one-off lump payment and can sometimes alter the overall division of capital.
The law provides general guidelines under Section 25 of the Matrimonial Causes Act 1973 about what needs to be considered but that law is nearly 50 years old now. A court has a wide discretion about what could happen in a case which is why there is hardly ever one answer about who gets what on divorce. Over the years, cases that have been before the courts help guide how different issues should be considered.
Under Section 25 of the Matrimonial Causes Act a court has to have regard to all the circumstances of a case with the first consideration being given to the welfare and needs of any dependent children under the age of 18. The factors in this section of the law are:
(a) the income, earning capacity, property and other financial resources which each of the parties to the marriage has or is likely to have in the foreseeable future, including in the case of earning capacity any increase in that capacity which it would in the opinion of the court be reasonable to expect a party to the marriage to take steps to acquire;
(b) the financial needs, obligations and responsibilities which each of the parties to the marriage has or is likely to have in the foreseeable future;
(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;
(h) in the case of proceedings for divorce or nullity of marriage, the value to each of the parties to the marriage of any benefit which, by reason of the dissolution or annulment of the marriage, that party will lose the chance of acquiring.
The benefit of using mediation is that a couple can discuss what they think is fair in all the circumstances. A mediator who is experienced in this work will be able to explain to a couple all the different types of options available and the factors that will be considered when an agreement is approved by a court. Getting an agreement approved by a court is important so that it can then become legally binding.
We are experienced at helping couples reach agreements about how their assets should be shared on divorce so that they can stay out of court and save legal fees. On the booking page of our website – www.familymediationandmentoring.co.uk- you can book a free appointment to find out how we can help you or call us on 0800 206 2258 or email us at email@example.com.