How does the court divide assets on divorce?
As London divorce solicitors, we are often asked the question “what will I end up with after the divorce?”. That question normally prompts a discussion about how the court divides assets on divorce. It can be frustrating to many divorcing spouses to hear that the family court does not use a set formula to work out how to divide assets on divorce. Understandably, a husband or wife want a clear-cut answer of what a family court judge will order as their financial settlement so that they can then negotiate and agree a financial settlement with their spouse.
Although there is no set formula to divide assets on divorce, a family judge will look at a range of factors when deciding how to decide family assets on divorce. These factors are contained in section 25 of the Matrimonial Causes Act. You will therefore often hear a judge or a top London divorce solicitor refer to the “section 25 factors”.
As family assets on divorce are not divided up in accordance with a strict mathematical formula, there is no rule that says, for example, that the wife gets 75% of the assets if she is looking after young children. That means advising on financial settlements on divorce is tricky. That is because in most family situations if a husband or wife applied to court for a financial settlement there would be a range of financial settlements or financial court orders that a judge could reasonably make. This range of court orders is often referred to by the best London divorce solicitors and family court judges as the “band of reasonableness”.
Therefore, when a divorce solicitor says the financial settlement answer is “X”, the reality is that a top London divorce solicitor would say that the answer, if a husband or wife went to court for a financial settlement is in a range of “W to Z”. That band is actually helpful when spouses are negotiating through divorce solicitors or in family mediation, because they are not stuck on only settling for X. If a husband or wife is stuck on only one financial settlement solution then that can result in a financial court application that can end up going all the way to a final hearing.
How can OTS Solicitors help?
If you need expert legal advice on your financial settlement options or representation in financial court proceedings, then the divorce a family law team at OTS Solicitors can help you.
For a confidential discussion on how OTS Solicitors can help you please call us on 0203 959 9123.
Family court discretion when dividing family assets
A family court judge has discretion to make what orders he or she thinks appropriate. Therefore, it is sometimes difficult to predict exactly what orders an individual judge might make when ruling on a financial application. For example, it might be reasonable for a judge to order the sale of the family home and for the wife to get 50% of the proceeds of sale and a lump sum payment, while the husband gets 50% of the proceeds of sale and keeps the family business. An alternative financial court order would be that the wife gets the family home transferred to her, a smaller lump sum and the husband keeps the family business.
When it comes to financial settlement options much depends on individual financial and personal circumstances. The important thing that top London divorce solicitors focus on is the range of orders a judge might reasonably make and the overall percentage split of family assets that a husband and wife end up with.
The needs of children when dividing assets on divorce
When deciding how to share assets on divorce, the welfare of any children under the age of eighteen is the court’s first consideration. The concept “first consideration” does not mean that the children’s needs are paramount. However, the needs of the children do come first. Most parents would agree with this approach, after all after the divorce they want their children to live in a nice home and have the sort of lifestyle that the child is accustomed to.
However, the best London divorce solicitors always emphasise that if a child is sharing time with his or her mother and father, then both parents need to be able to afford a nice home in a suitable area.
The factors considered by the court when dividing family assets on divorce
The court has to take into account a checklist of factors when deciding how to divide family assets on divorce. Top London divorce solicitors say that the importance given to each factor depends upon the family’s individual financial and personal circumstances. The factors are:
• The income, earnings capacity, property and other financial resources which the husband and wife has or are likely to have or could reasonably be expected to have in the foreseeable future; and
• The financial needs, obligations and responsibilities of the husband and wife; and
• The standard of living enjoyed by the family during the marriage ; and
• The husband and wife’s age and the length of the marriage including any period of pre-marriage cohabitation; and
• Any physical or mental disability of either the husband or wife; and
• Any contributions made by either the husband or wife to the welfare of the family; and
• The conduct of either the husband or wife to the extent that it is relevant to the financial court application. The family court will only rarely decide that conduct is of relevance to the amount of the financial award;
• The value of any benefit that either the husband or wife will lose because of the divorce, for example pension provision.
Top London divorce solicitors say the section 25 checklist of factors are a bit like a jigsaw that has to be slotted together. Sometimes the jigsaw is easy, for example if a husband and wife have been married for a long time and have straightforward finances and similar financial and housing needs. In other circumstances, the jigsaw is harder, for example, if a spouse is not able to work because of ill health but the marriage is of short duration and the husband's family home was acquired prior to the marriage.
As most families personal and financial circumstances are never normally “standard”, it pays to get the best London divorce solicitors advice on how the court will divide assets on divorce.
What financial orders can a family court judge make?
The top London divorce solicitors say that as well as knowing what factors the court takes into account when dividing assets, spouses also need to know what orders a judge has the power to make. A financial court order can be made by agreement after a negotiated financial settlement or after a final hearing of a financial court application. The court can make the following orders: