Will our assets be divided equally when we divorce?
The short answer to this is… it depends.
The aim of the law in this area is to achieve fairness. Fairness doesn’t necessarily mean dividing assets equally, but it does mean avoiding discrimination between spouses and their respective roles in the marriage. Whilst the starting point is an equal division of assets, in some circumstances an unequal distribution of assets may be fair. For example, if one spouse’s mortgage capacity is lower than the other’s, it may be fair for them to receive a greater share of the assets in order that they can both be housed in similar properties.
The courts are guided by three principles, together with the relevant legislation, when determining a financial settlement:
- Needs – are there any children of the family? If so, what do they need, and what do the parties need to ensure they are housed appropriately, and their outgoings met?
- Compensation – should one party be compensated for a loss of income as a result of giving up a well-established and lucrative career to look after children or exercise a domestic role?
- Sharing – have the assets been fairly shared between the spouses on divorce?
In most cases there aren’t enough assets to get beyond principle 1. Once needs are considered and provision made for the family, there aren’t surplus funds to consider whether one party should be compensated for giving up a career, or whether the assets have been shared appropriately. However, in cases of significant wealth, where there are surplus funds once needs have been met, principles 2 & 3 will be considered.
If you would like help in determining what a fair and reasonable settlement could look like for you, please call Claire Tollefson on 01892 506191 for a free telephone call to discuss your circumstances.