In the UK, the division of assets during a divorce does not adhere to a strict 50/50 rule. While an equal split is often the starting point, the final distribution aims for fairness, considering the unique circumstances of each case.
In this Q&A article we consider the common questions separating couples ask when a relationship breaks down.
Q: How are assets divided upon divorce in England and Wales?
A: The division of assets upon divorce is guided by the principle of fairness, and judged against “the yardstick of equality”. While equal division of the assets (also known as the “sharing principle”) is a starting point, the court carefully considers various factors to determine what is fair for both parties. Therefore, a division of the assets can stray away from a “50/50 split” due to the needs of one party (also known as the “needs principle”).
Q: What is the principle of “needs” in the division of assets in a divorce?
The “needs” principle ensures both parties, and any dependent children, have their basic financial requirements met post-divorce, including housing, maintenance, and a reasonable standard of living. The court prioritises needs in the context of the available resources of the family, especially if one spouse is unable to support themselves due to factors like childcare responsibilities or health issues.
Q: What is the principle of “sharing” in asset division?
The “sharing” principle focuses on fair distribution the wealth accumulated during the marriage. It recognises — both financial and domestic contributions — and so both are entitled to an equal share of the assets, unless there is a good reason to the contrary.
Q: What factors does the court consider when dividing assets?
A: When deciding how to divide assets, the court takes several important factors into account:
- Length of the marriage: Longer marriages are more likely to result in a “50/50 split”, as assets are considered to be “matrimonial assets”. For shorter marriages, the court may look more closely at individual contributions, particularly if one spouse brought in more assets at the start (“non-matrimonial assets”).
- Contributions to the marriage: The court does not solely focus on financial contributions. Non-financial contributions, such as childcare, homemaking, and supporting the other spouse’s career, are equally valued. The contributions of both spouses, whether financial or otherwise, are important in achieving a fair division.
- Needs of the parties and children: The future needs of both spouses, and any dependent children, are critical considerations – the needs of any children of the family are always the first consideration. For example, a spouse who has primary responsibility for children may be entitled to a larger share of the assets to ensure their housing and maintenance needs are met. The court is concerned to ensure that both spouses can maintain a reasonable standard of living post-divorce.
- Age and health of the parties: The court will assess each spouse’s age, health, and future earning capacity. A spouse with health issues or limited employment prospects may be entitled to a larger share of the marital assets to secure their financial future.
- Standard of living during the marriage: The court will assess the standard of living enjoyed by the parties during the marriage. The aim is to ensure that both parties are able to maintain a standard of living as close as possible to what they were used to during the marriage, taking into account the available assets.
Q: How does the asset division process work?
A: Parties are encouraged to reach agreement through negotiation or mediation, which is often cheaper and less stressful.
If they cannot agree, either party can apply to the court for financial proceedings to determine the division of assets. The court will then list a preliminary hearing where it will set directions that each party must comply with. This requires full disclosure of all financial assets, including property, pensions, savings, investments, and debts. The court may also order expert evidence, such as valuation reports for companies or properties, or a report on pension sharing. The second stage is a Financial Dispute Resolution hearing, and at this hearing (and indeed throughout the process) the court will encourage the parties to negotiate and reach agreement by the judge giving an indication of what the division may look like if the matter reaches Final Hearing. If the parties still cannot reach agreement, and a Final Hearing is necessary, a judge will listen to all the evidence and make a binding decision on division of assets.
Q: What is the final settlement process?
A: Once agreement has been reached, or the court has made a decision at a Final Hearing, a financial order is drawn up to legally formalise the division of assets. This order is then sealed by the court, making it binding on both parties and capable of being enforced if required.
Q: What is the ultimate goal of dividing assets upon divorce?
A: The ultimate goal is to ensure a fair and just outcome for both parties. While a “50/50 split” might be appropriate in some cases, the court will always tailor its decision based on the specific circumstances of the marriage.
How Wedlake Bell can help
If you are considering divorce and would like to discuss your options, please contact us. By considering factors such as contributions, future needs, and the standard of living during the marriage, we can help work with all parties involved to ensure an appropriate division of assets , to hopefully enable you to move forward with financial stability and avoid court
We use our extensive legal knowledge and sensitivity as well as commercial sense to navigate clients through one of the most difficult and emotional experiences of their lives. For a confidential, no-obligation call-back from one of our Family lawyers, please email your contact details and a brief summary.