Determining assets of the marriage is never a straight forward task for couples embarking upon a divorce and bickering over who owns what is sadly common place. Nicholas Cusworth QC, chair of the Family Law Bar Association has called for reform of divorce law to provide a default regime for the division of assets when relationships break down.
Mr Cusworth QC told the Law Society gazette that he favoured a regime termed ‘community of marital property’, under which all assets, except inheritances, gained during a marriage are presumed to be jointly owned and are divided equally upon divorce.
Community property regimes work by calculating what assets are matrimonial and once that is established those assets are divided equally between the parties. All assets which were acquired prior to the marriage will belong to the party who originally owned them.
Whilst a community property regime will provide more certainty, it is questionable whether it can offer the flexibility offered by the current regime.
Currently following a divorce, if division of the matrimonial assets cannot be agreed, then legal advice will need to be sought and an application to court made for ancillary relief.
The power of the court to make financial orders are found in the Matrimonial Causes Act 1973 and include income orders , such as periodical payments and capital orders , such as lump sum orders , property adjustment orders and pension sharing orders.
The court currently has a great deal of discretion and flexibility when deciding on the appropriate division of matrimonial assets upon divorce. This includes consideration of a number of issues such as the financial needs and resources of each party, the standard of living enjoyed by the family before the breakdown of the marriage, the age of the parties and the duration of the marriage, any physical or mental disabilities of either party, contributions made to the family (including financial contributions and any contribution by looking after the home or caring for the family), any conduct which it would be inequitable to disregard and any potential financial loss for example loss of pension rights.
In applying these factors, the court’s approach is to achieve a fair outcome with equality only being departed from where there is good reason for doing so. The court also has a duty to consider whether a clean break should be achieved and will give first consideration to the welfare of any children of the family.
Taking into account the very wide discretionary powers which are currently deployed by the court when determining such family law issues it seems practical to consider a more certain reform such as a default regime for the division of assets. This would not only provide greater certainty for couples seeking a divorce, but would also make our job to provide legal advice in respect of such matters a little more straight forward!
