Is everything always split 50/50 in divorce? This is possibly one of the most common questions we hear. In reality, there is no set formula when it comes to splitting assets in divorce.
The law provides general guidelines and gives the Courts a wide range of discretion. The law itself is within Section 25 of the Matrimonial Causes Act 1973.
That act is nearly 50 years old now but the factors set out in it are still valid.
Here’s a summary:
- The welfare of any children is always the first consideration.
- Income, earning capacity and other financial resources which are available now or may be available in the future.
- The expenditure that each person has now and is expected to have in the future including liability for debts.
- The standard of living enjoyed by the family before the breakdown of the marriage (although it may not be possible to divide the money between two households and retain the same standard of living).
- Health problems or disability which may impact on earning capacity or care costs.
- The contribution each person has made to the welfare of the family, both financially and in looking after the home and children.
- Conduct, although behaviour has to significantly impact on the financial position of the family before it is taken into account.
- The value of any benefit, such as pensions, which is being lost as a result of the divorce.
The negotiations that go on as a result of these factors are the most important discussions you will have during your divorce. It is crucial you have someone on your side to secure an agreement that is fair otherwise you risk making some costly mistakes.
There are however some practical steps below you can take to prepare for these negotiations.
How to prepare for financial negotiations
You will save a lot of time and money if you can do some preparation:
- Organise all of your financial documents so that they are easily identified and in date order.
- Apply for statements showing the current value of any pension funds.
- Think about where you see yourself living in the future. If you need to move – how much would it cost to buy a different property and what would the purchase costs, stamp duty and moving costs be? How much can you borrow on a mortgage on your own?
- Prepare a list of your monthly expenditure – what are you actually spending now? Include everything. Also prepare a similar budget for the future and do a separate schedule for everything you need to pay out for your children.
- If you are on a low income use a website to calculate whether you will qualify for financial help from the state.
- Use the Child Maintenance Service’s online calculator to check what your liability or entitlement for child maintenance may be.
- If you are not currently working or working part time think about whether it is practical to get a job or increase your hours. If so, what would be able to earn? Would there be child care costs if you were working?
- Take advice from a specialist family lawyer at an early stage.
We can help you get a fair deal. We understand what is important to you. Give us a call today on 01207.437710.
Section 25 – Matters to which court is to have regard in deciding how to exercise its powers under ss. 23, 24 [F55, 24A, 24B and 24E].
(1)It shall be the duty of the court in deciding whether to exercise its powers under section 23, 24 [F56, 24A [F57, 24B or 24E]] above and, if so, in what manner, to have regard to all the circumstances of the case, first consideration being given to the welfare while a minor of any child of the family who has not attained the age of eighteen.
(2)As regards the exercise of the powers of the court under section 23(1)( a ), ( b ) or ( c ), 24 [F58 , 24A [F59, 24B or 24E]] above in relation to a party to the marriage, the court shall in particular have regard to the following matters—
(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 F60 . . . which, by reason of the dissolution or annulment of the marriage, that party will lose the chance of acquiring.
(3)As regards the exercise of the powers of the court under section 23(1)( d ), ( e ) or ( f ), (2) or (4), 24 or 24A above in relation to a child of the family, the court shall in particular have regard to the following matters—
(a)the financial needs of the child;
(b)the income, earning capacity (if any), property and other financial resources of the child;
(c)any physical or mental disability of the child;
(d)the manner in which he was being and in which the parties to the marriage expected him to be educated or trained;
(e)the considerations mentioned in relation to the parties to the marriage in paragraphs ( a ), ( b ), ( c ) and ( e ) of subsection (2) above.
(4)As regards the exercise of the powers of the court under section 23(1)( d ), ( e ) or ( f ), (2) or (4), 24 or 24A above against a party to a marriage in favour of a child of the family who is not the child of that party, the court shall also have regard—
(a)to whether that party assumed any responsibility for the child’s maintenance, and, if so, to the extent to which, and the basis upon which, that party assumed such responsibility and to the length of time for which that party discharged such responsibility;
(b)to whether in assuming and discharging such responsibility that party did so knowing that the child was not his or her own;
(c)to the liability of any other person to maintain the child.]