Finances and asset division in my divorce

Asset division during a divorce can be a complex process that requires careful consideration of legal principles and individual circumstances. Unlike other areas of law, there is no fixed formula for dividing assets in divorce proceedings. Instead, the court employs a discretionary approach in England and Wales, taking into account the unique needs and situations of both parties to achieve a fair and equitable division of assets.

Hiding, selling, or transferring assets with the intent to prevent the other party from receiving their rightful share can be viewed as an attempt to ‘put assets beyond a person’s reach.’ Such actions may not only jeopardise the transparency of the proceedings and increase costs, the court also has the power to set aside those transactions in certain circumstances.

To navigate the intricacies of asset division in divorce effectively, it is advisable to seek legal counsel. Our experienced team at Edwards Family Law has a wealth of knowledge in this area and can assist you in safeguarding your interests while ensuring compliance with legal requirements.

In cases where one party is suspected of concealing assets, our firm has extensive experience in addressing such concerns. We have handled numerous situations where one party refused to disclose assets, necessitating proceedings to ensure full disclosure. At Edwards Family Law, we are committed to ensuring that you have access to all the necessary financial information. If your partner is uncooperative in disclosing their assets, we are prepared to pursue legal avenues to compel disclosure.

There are several avenues to resolve financial matters in divorce cases, and our approach is tailored to your unique circumstances. We work closely with you to develop a strategy aligned with your goals, whether that involves voluntary disclosure and negotiations, arbitration, or court proceedings. We prioritise efficiency, avoiding unnecessary legal fees associated with unsuccessful dispute resolution methods but will always strive to have your case resolved by agreement if possible. If we determine that an alternative approach is needed, we will promptly advise you, allowing you to make informed decisions.

Yes, the court treats short, medium and long marriages differently. It is important to remember that if you lived with someone (cohabited) directly before getting married that ‘cohabitation period’ will be added on to the length of your marriage. For example – a couple who lived together for 5 years and have been married for 1 year would be considered a medium length marriage of 6 years not a short marriage of 1 year.

There are three things the law considers when deciding how to divide assets on divorce: sharing, needs and compensation.

Sharing: What has been built up during the marriage (and crucially how much is it all worth) and what does this give each person when divided 50:50? In a ‘sharing case’ you often see disputes about how much things are worth and who will keep what since this affects the amount each person receives when dividing up the assets.

Needs: If dividing the assets 50:50 does not give each person what they need, you must then see if it would be appropriate for one person to receive a greater share of the money. For example, because the children primarily live with them or because they do not work and are therefore unable to obtain a mortgage. A “needs case” will usually result in a departure from 50:50. The exact percentage will depend on the circumstances of your case, but you may see outcomes where the assets are shared 60:40 or 65:35 for example.

Compensation: Finally, the law will consider whether anyone be compensated because of special circumstances? Whilst the law does allow for this, it is very rare to see this in practice. The law does not compensate anyone for being on the receiving end of bad or immoral behaviour. Examples may be when one person has specifically given up a very lucrative promotion to allow the other person to advance their career – and it is not a ‘needs case’ so there is enough money available to compensate the person.

No. The family home has special status and will likely be considered ‘matrimonial’ even if you did not pay for it directly and/or have not been paying the mortgage. It would be sensible to apply for a Homes Right Notice via HM Land Registry in these circumstances, however, to ensure your right to occupy the property is clear to any third parties and help prevent the chances of your spouse trying to sell the property without your agreement.

Yes, if it is ‘matrimonial’. An example of matrimonial money is – money your spouse received as a bonus that he/she put in an account in their sole name. This is not their money. It is family money since it was earned during the marriage. It does not matter whose account it is held in. If the money is ‘non-matrimonial’ then it will not be shared unless there is not enough money elsewhere to meet everyone’s financial needs. An example of ‘non-matrimonial money’ is inherited money that (importantly) has been kept separate from family money.

If you have kept that money separate during your marriage then it is possible to ringfence it. If the money has been combined with family money – for example you used it to pay off your mortgage, then it is unlikely you will be able to ringfence that money. Even if the money / asset has been kept separate throughout the marriage, it will still depend on whether there is enough money elsewhere to meet everyone’s needs. If there is not, it may be that some of the inheritance is needed to meet those needs. In those circumstances, only the amount needed to ensure everyone’s needs are met will be considered. It would not mean all the inheritance becomes part of the financial settlement.

All debts will need to be considered when reaching a financial settlement. It likely that all debts will be considered ‘matrimonial’ irrespective of who built them up. It is only in extreme cases (excessive gambling etc.) where it may appropriate to ringfence debt and leave it to be paid off by one spouse alone.

Yes, unless you have a very short marriage. You should get specialist advice about pensions when divorcing as this can be complex to resolve. You can find more information about how pensions are treated on divorce here: A Guide to the Treatment of Pensions on Divorce