15 January, 2024

What is the division of assets in a divorce?

In divorce cases, even when a couple aims for a mutual financial agreement, understanding how a court would divide finances is crucial due to potential litigation. A final financial order is necessary, contingent on court approval aligning with what the court would order independently. Clients must gauge negotiation leverage, make cost-proportionate decisions, and be aware of the court’s discretionary nature.

The Matrimonial Causes Act 1973 guides the court, prioritizing the welfare of minor children. Section 25 factors influence the court’s decision, considering income, financial needs, standard of living, age, duration of marriage, contributions, conduct, and potential loss of benefits.

Certain sections, like 25(a) on earning capacity, 25(d) on the duration of marriage, and 25(f) on equal contributions, impact the court’s decisions. Establishing exceptional contributions is challenging, especially in long marriages. Section 25(g) suggests the court rarely considers one party’s conduct.

In terms of assets, matrimonial and non-matrimonial assets are differentiated. The court initially aims for a 50/50 sharing of matrimonial assets, considering needs as a priority. Compensation arguments are rare due to difficulties in proving relationship-generated disadvantages.

Maintenance types include spousal and child maintenance. Spousal maintenance is contingent on the recipient’s income needs, with the court cautious about earning capacity, especially for those caring for children. Maintenance duration may be fixed, subject to variation based on circumstances.

The court considers capitalizing spousal maintenance for a clean break. Child maintenance falls under the Child Maintenance Service unless the paying party earns over £156,000 gross per year. Seeking specialist legal advice is emphasized to ensure a fair, reasonable, and court-approved settlement.

To seek professional financial advice, please contact Lionmede Wealth Management.

Initial financial review meetings are complimentary.

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