Understanding how assets are divided in divorce, can help a divorcing couple begin to work out what a fair financial settlement may look like for them and act as a solid starting point for negotiations.
The starting point when working out how assets will be divided in divorce is a 50:50 split. However, this does not mean that all divorcing couples will end up with an equal share of the assets.
As the financial settlement depends on the parties’ circumstances (and their needs), and every marriage (and the assets) are unique, it follows that a fair financial settlement will not look the same for every divorcing couple. In some circumstances, one party may end up with a larger share.
When helping you to negotiate your financial settlement, your solicitor will keep in mind how assets are divided in divorce when a court is asked to decide a financial settlement.
There are various factors from the Matrimonial Causes Act 1973 which the court will take into consideration, including:
• the age of each party to the marriage and the duration of the marriage
• 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
• 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
It is important to note here that if there are any children involved, their welfare will be considered by the court before other factors.
The family home is often one of the top concerns for couples trying to work out how assets will be divided in divorce. Indeed, the family home is often one of the most valuable assets a couple owns.
The court can make a number of different orders with regards to the family home, such as one party buying the other out, or one party staying in the family home until a certain event (such as the youngest child reaching 18 years old) takes place, then the family home will be sold and the proceeds shared.
How are assets divided in divorce? Unfortunately, there is no simple formula that you can use to work out exactly how assets will be divided in divorce.
How assets are divided in divorce will come down to a number of different factors, including how long you have been married and whether there are any children involved.
It is highly advisable that anyone trying to work out how assets are divided in divorce, seek advice from an experienced divorce solicitor, such as Austin Kemp.
When your marriage comes to an end, having to deal with how to divide assets can be daunting. How to divide assets in a UK divorce can be confusing, particularly because there is no set formula that you can use to find out what your financial settlement will look like.
In this article, we’ll explain the key principles you need to know about regarding how to divide assets in a UK divorce, so you can begin to get an understanding of what a court considers when working towards a fair division of assets. However, as no two marriages are the same and what may be a fair financial settlement for one couple may not be fair for another, you should always seek legal advice from an experienced solicitor, such as Austin Kemp, tailored to your individual circumstances.
The first point to note when looking at how to divide assets in a divorce is that there are no hard and fast rules to follow. It is not possible to put your information into a ‘how to divide assets’ calculator and come up with a definitive answer.
Every marriage is unique and, as such, a fair financial settlement will look different for every couple.
This is why it is so important to seek independent legal advice from a divorce solicitor, who can guide you through your possible options.
When people discuss how to divide assets in a UK divorce, an equal or 50:50 division of assets is often cited as what generally happens. This comes from the fact that when a court is asked how to divide assets in a divorce, the court will consider what is known as the sharing principle. In practice, this means that the starting point of a divorce asset division is 50:50.
However, this is only the starting point and the court may decide that this is not appropriate in a couple’s circumstances.
This could happen if, for example, one party had sacrificed their career to look after the children and the other had a career in which they were earning in six-figure sum. Of course, this is over simplified and there are many other factors which could come into play which could affect the financial settlement.
Asking a court to decide how to divide assets in a divorce should normally be viewed as a last resort, as the process can be time-consuming and costly. However, it can be helpful to understand the factors a court would consider when asked how to divide assets in a divorce. These factors are known as the ‘Section 25’ factors.
‘Section 25’ factors come from the Matrimonial Causes Act 1973. They include:
• 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
• how long a couple have been married
• the income, earning capacity (current and future), property and other financial resources which each of the parties to the marriage has or is likely to have in the foreseeable future
• any physical or mental disability of either of the parties to the marriage
If there are any children involved, their welfare will be paramount and the court will look at this before considering any of the factors listed above.
If your marriage has broken down, understanding how to split assets in divorce is vital before you begin negotiations with your spouse. Although you should always get independent advice from a solicitor relevant to your circumstances, it’s helpful to know how a court decides how to split assets in divorce.
Every marriage is different and, as a result, how to split assets in divorce will vary depending on a couple’s circumstances. There is no one-size-fits-all answer to the question how to split assets in divorce.
For example, a couple who have been married only five years and have no children, may end up with a financial settlement which looks very different to a couple with two children and a 25-year marriage.
When negotiating how to split assets in divorce, the aim is to reach a fair financial settlement for both parties.
Again, what is viewed as fair will vary from couple to couple, depending on their marriage and their assets. There is no set fairness formula.
Although asking a court to decide the division of assets upon divorce should usually be viewed as a last resort (it can be a costly and time-consuming process), it can be useful to look at what factors a judge would consider when asked how to split assets in divorce in a fair manner.
When considering how to split assets in divorce, the first factor a court will consider is the welfare of any children involved.
Next, it will look at other factors, known as ‘Section 25 factors’. These come from Section 25 of the Matrimonial Causes Act 1973.
Section 25 factors include:
• 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
• the financial needs, obligations and responsibilities which each of the parties to the marriage has or is likely to have in the foreseeable future
• the length of the marriage and the age of each party
• the standard of living the family enjoyed before the marriage broke down
Although a 50:50 division of assets is the starting point for the court, a 50:50 split won’t be appropriate for every divorcing couple. When considering how to split assets in divorce, a court can and will depart from a 50:50 split, if necessary.
How to split assets in divorce: always seek independent legal advice
Reaching an agreement which a court is likely to view as fair, can save time and money in the long run. As there is no set formula that you can use to determine how to split assets in divorce, it’s highly advisable that you seek legal advice suited to your individual circumstances.
Our expert family law solicitors can help you with a range of legal issues relating to fair divorce settlements, including:
For more information call our divorce solicitors on 0845 862 5001 or email mail@austinkemp.co.uk.
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