One of the most frequently asked questions and a question that is asked early in the divorce process, is ‘what am I entitled to in a divorce settlement?’ There is, however, no straightforward answer to this question, as each case is different due to the circumstances of every couple.
The court follows the legal principles from legislation and case law in making its decision, although each judge has a discretion to do what they perceive to be appropriate on the evidence in each case. This means the precise outcome of financial court proceedings can be quite difficult to predict.
The statutory principles are set out in Section 25 of the Matrimonial Causes Act 1973 and Part 5 of Schedule 5 to the Civil Partnership Act 2004. The court’s first consideration is the welfare of any children involved. Alongside that, when determining an appropriate division of resources, the court considers:
- Each person’s income, earning capacity, property, and other financial resources, available now or in the foreseeable future.
- Each person’s financial needs, obligations, and responsibilities, relevant now or in the foreseeable future.
- The standard of living enjoyed by the family before the breakdown of the marriage.
- Each person’s age and the length of the marriage.
- Any physical or mental disability.
- Contributions made, or likely to be made in the foreseeable future, to the welfare of the family, including any non-economic contribution.
- 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 (although it is rare for conduct to be considered).
- The value of each of the parties to the marriage or civil partnership of any benefit which that party will lose the chance of acquiring.
The decision that the court makes must be fair and must consider each party’s needs and the sharing of any wealth above that which fulfils each party’s reasonable needs.
When dividing assets, the court will measure the result against a benchmark of a 50/50 asset split to assess whether anything other than that is justified. In some cases, one person’s (or the children’s) needs will require a higher proportion of the capital assets, for example, for housing, or sometimes the court’s order may reflect that one person came into the marriage with significantly greater assets than the other.
In certain circumstances, an agreement made before or during a marriage (a pre-nuptial or post-nuptial agreement), which can also have a significant effect on what the court decides.
What can the court do?
The court can make financial orders to divide up the assets and income. The court’s powers apply to all property in which either or both parties have an interest, (which may also, in certain circumstances, include assets in companies or trusts). Orders the court can make include:
- An order for the sale of a property, a transfer of a property to one person (or a child) or an order to put a property into a trust – in some cases it may be appropriate for one of the parties to receive their share of a property at a later date. For example, when any children have reached the age of eighteen, or completed their education.
- An order for a sum of money (a lump sum), payable in one sum or by instalments, or by a series of lump sums, for example to pay off a mortgage.
- An order for one party to pay maintenance to the other party, either for the rest of their joint lives or until the recipient remarries, or enters a subsequent civil partnership, or for a fixed period (which can be for either a non-extendable or extendable term).
- Less commonly, an order for the educational expenses or special needs of a child, but not usually for general child maintenance, which will be dealt with via the Child Maintenance Service, unless agreed between parties, except at higher income levels where the court can make a ‘top-up’ order.
- An order that a pension be shared or attached. Pension sharing is where pension funds are transferred or split between the parties creating two separate pension schemes, and a pension attachment order is like maintenance direct from a pension but can be a lump sum.
In very few cases, the outcome will be an order that is made by the court at a final hearing as most parties will reach an agreement with the assistance of their family lawyer prior to that stage.
Seek legal advice.
At Martin Kaye Solicitors, there are a team of dedicated family law specialists who would be more than happy to help you with any separation or divorce. If you would like to discuss further, please contact 01952 272222 and ask to speak to the Family Department.