Finances upon divorce can be complex. There is a lot of case law which can be confusing when trying to determine how a Judge may deal with a matter if it progressed to Court.
You may have heard stories from friends or peers where the Courts have ordered a 70/30 split of the matrimonial assets in favour of one spouse. You may believe that this same calculation applies to all cases. It doesn’t. The so called “70/30 rule” is a myth.
This is not to say a spouse will never be awarded 70% of the assets, however it is by no means a set rule and every case is determined depending on the circumstances.
Following the decision in White v White, the Court’s aim when dividing matrimonial assets upon divorce is to determine what is ‘fair’.
To calculate a fair outcome, the starting point is to look at a 50/50 split of the matrimonial assets then consider whether it is reasonable in the circumstances. The House of Lords in White v White made it clear that equality should only be departed from if there was a ‘good reason’ for doing so.
To assist in determining whether there should be a deviation from a 50/50 split (for example, a 70/30 split) the Court provides us with a number of factors which should be considered and these are:
- 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 standard of living enjoyed by the family before the breakdown of the marriage;
- the age of each party to the marriage and the duration of the marriage;
- any physical or mental disability of either of the parties to the marriage;
- 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;
- 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;
- in the case of proceedings for divorce or nullity of marriage, the value to each of the parties to the marriage of any benefit, which, by reason of the dissolution or annulment of the marriage, that party will lose the chance of acquiring.
One important point which arose from the case of White v White is that there was no place for discrimination between spouses and their respective roles or genders. For example, one spouse will not be awarded a greater share of the assets because they are the breadwinner whilst the other spouse is a stay-at-home parent.
Despite the changes to the principles for dividing matrimonial assets, there can still be ambiguity as to what is deemed a ‘fair outcome’ and whether more consideration should be given to one of the above factors over another. It is for this reason we strongly advise you obtain independent legal advice before making entering any agreements in relation to the division of matrimonial assets upon divorce.
What is a matrimonial asset?
A matrimonial asset is any asset acquired by you or your spouse during the marriage, regardless of whose name they are held in. There are however occasions where assets party has brought in to the marriage or acquired after separation may be deemed to be ‘matrimonial’ and therefore taken into account when reaching a fair outcome.
Matrimonial assets include, but are not limited to, properties, pensions, savings, life insurance, stocks and shares, jewellery and cars.
How do I begin negotiations?
Before it is possible to negotiate and come to an agreement as to how assets should be shared, it is necessary to consider both parties’ financial positions. We always recommend the process of financial disclosure as the first step. This will involve you and your spouse exchanging full and frank disclosure of your financial position. This enables you to see what the assets are which are to be shared. Thereafter we can start with a 50/50 split of the assets and apply the s25 factors to determine whether it is fair and reasonable for you to claim more than a 50% share.
What if it is not possible to come to an agreement?
It is always advisable to attempt to deal with matters outside of the Court first, however if it is clear you and your spouse will not be able to come to an agreement, you may wish to consider an application to the Court. To start financial relief proceedings you are required to file a Form A to the Court with a questionnaire which assists the Court when determining which Court is best suited to deal with your case.
Our expert Family Law Solicitors are more than happy to advise and assist you in relation to finances upon divorce, whether this is throughout negotiations or within Court proceedings.
Please contact us for a free no obligation discussion.
