A ‘Fair’ Division of Marital Assets
Sorting out your finances as part of a divorce can be very distressing. Understanding how the Court reaches a financial settlement, and your legal position, can help you both in reducing stress and saving money. Even if the matter does not go to Court and you reach your agreement through negotiation or mediation, the principles, set out in s25 of the Matrimonial Causes Act 1973 still apply to ensure it is ‘fair’.
What is a marital asset?
Traditional marital vows include the words ‘everything I have I share with you’; these are not simply words. In marriage, everything you own, either brought into the marriage or new, can be considered a marital asset and therefore will be considered equally owned. From the property you own, the sofa you bought with your bonus, to the pensions you have built up; they are all marital assets and are subject to the sharing principle.
What about my inheritance?
Funds received from Inheritance is not automatically considered a marital asset; however, it will not be ringfenced, and if the other party can show they have a need for the inheritance, the Court may consider it.
Equal contribution
Be aware that what you think you are entitled to, and what the law judges to be fair, can be two completely different things. To simplify it, financial contributions, home contributions and childcare are all viewed as equal by the Court. Each party enables the other to thrive; for example, one party would not be able to build a career, pay into a pension and progress if the other party had not run the home or provided the childcare, and vice versa.
What is a fair division?
Division of matrimonial assets start with a 50/50 share. The Court will consider the factors below; they have full discretion on the weight given to each of the section 25 factors and then decide how the assets will be distributed. Therefore, the final division is very likely to depart from the 50/50 share.
The factors in section 25 of the Matrimonial Causes Act 1973:
The resources available to each party, both capital and income, whether current or reasonably foreseeable.
The financial needs of each party; considering the needs of dependent children and any disabilities.
The duration of the marriage and the age of the parties.
The conduct of the parties (but only in exceptional circumstances).
The standard of living enjoyed by the parties whilst married.
Any benefit either party will lose because of the divorce.
The contributions of each party to the marriage (both financial and non-financial).
Essential
Irrespective of how the agreement is reached, it is crucial that it is recorded in a Financial Consent Order. This is the only way that a ‘clean break’ can be achieved meaning that neither party can make a claim against the other in the future. Learn more about that here: https://www.mjplaw.co.uk/blog/reaching-a-financial-settlement.
How MJP Law can help
At MJP Law, we understand what a difficult time a Divorce and all the arrangements that come with it can be. We can advise you on the best way forward and can negotiate an agreement with your spouse or their solicitor on your behalf and, only where necessary, issue Court proceedings.
If you would like to speak with a member of our family law team, please call 01202 842929 or email family@mjplaw.co.uk who will gladly assist.
