Spouses who want a divorce may wonder what happens to the assets they own together. Matrimonial assets are described as the financial product of the common endeavour of both parties and the largest, especially after a lengthy marriage, are usually the matrimonial home and pension provision.
In the U.K, the starting point for dividing assets is a 50/50 split but the financial settlement is not set in stone and is different in each case depending upon the needs and circumstances of each party.
An uncontested divorce
Both spouses will need to list all the assets they own jointly or individually as well as their debts. If they can amicably decide between themselves how the assets and debts should be divided, the whole divorce process is much easier.
For spouses who have been separated for two years, where both agree to a divorce, it is possible for them to handle their own divorce and fill in divorce documents they have access to online. Net Lawman provides example texts and guidance notes to help complete such documents with confidence. Note that in such a case, assets acquired while separated are considered in the division of assets for divorce.
If spouses cannot reach a decision on how to divide assets, mediation may help. Alternatively, a solicitor can propose a voluntary exchange of financial positions. If a solution cannot be found and the spouses cannot agree, court proceedings become necessary.
Factors the court takes into account
The court has to balance the claims of each spouse with reference to the following factors.
- The income and earning capacity of each spouse as well as property and other financial resources each has or is likely to have in the foreseeable future.
- The age of each spouse and how long the marriage lasted.
- The standard of living of the family before the marriage broke down.
- Any mental or physical disability of a spouse.
- The financial needs and obligations each spouse has or is likely to have in the near future.
- Any contributions a spouse has made or is likely to make to the welfare of the family, such as caring for children or looking after a home.
- Conduct of a spouse if the court considers it to have a bearing on asset division.
- The value to each spouse of a benefit one spouse would lose due to the divorce.
Pension provision and investments
The court looks at how financial affairs were managed during the marriage. If one spouse did not have the opportunity to accrue assets, income or a pension provision, it is considered fair that he or she is compensated for this.
The court views a marriage as a partnership of which the fruits should be shared. Any pension provision and investments are viewed as marital assets, depending on the length of the marriage.
The family home
The welfare of the children is always a vital consideration in any divorce. With regard to a family home, the court takes the needs of minor children into account. If the parent who cares for the children can afford the property upkeep and mortgage, the court may preserve the property to continue to be the children’s home.
If a home exceeds the needs of the children, it may be sold and each spouse will receive an equal share of the profit. The decision may be made to transfer the home into the name of the other spouse or to keep it until a specified event, such as a child reaching the age of eighteen or finishing an education.