Going through a divorce is never easy and many couples worry about their finances. In this article we’ll explore how finances are divided in England and Wales during a divorce…
If you’re getting a divorce, you may be a little concerned about the long-term financial implications. While the process can be financially challenging, divorce solicitors can support you to protect your interests in various ways, for instance, by helping you to secure spousal maintenance in the UK.
In this article, we’ll explore the topic of how assets are dividing during a divorce in England and Wales, along with how the Court makes these decisions.
What Counts as Matrimonial Assets During a Divorce?
Matrimonial assets are financial assets that an individual or their spouse have acquired at some stage during the marriage. Usually, matrimonial assets include things like investments, savings, pensions, and the family property.
If either spouse runs a business the business may also be considered as a matrimonial asset. For instance, if that business has afforded the couple a standard of living. When one or both spouses apply to the Court for a divorce, the matrimonial assets must be divided by both parties.
How are Assets Divided During a Divorce?
When dividing assets during a divorce the Court will refer to Section 25 of the Matrimonial Causes Act. The act determines the guidelines that the Courts must adhere to when separating assets during divorce. When dividing assets during a divorce in England and Wales the Court will take various factors into consideration, including:
The Earning Capacity
When determining how much of a share to give each person, one of the key considerations is earning capacity, assessing how much each individual is earning now, and is likely to earn in the future. The Court will also consider the property owned by both, along with any other financial resources.
The Financial Responsibilities and Needs
When dividing assets in a divorce, the Court will determine the financial obligations and requirements of both spouses, now and in the future. They will use this information to judge how much of a share each is entitled to.
Quality of Life
The Court considers the quality of life experienced by both parties before the relationship broke down. The Court will try to balance the assets available between both parties, however depending on the funds available, it may not be possible that the spouses are afforded the same quality of living as before.
Physical or Mental Disability
If either party experiences a physical or mental disability the Court will also consider this when dividing the martial assets. It could be that the person with medical needs is granted a larger share of the assets, in order to support themselves.
The Duration of the Marriage and Age
Another factor that comes into consideration is how old both parties are, and how long they’ve been married. For instance, if the couple have had a relatively short marriage, it is likely that there may be a larger emphasis on the financial contributions.
How Much Each Spouse Contributed
The deciding authorities will review how much each party contributed to the marriage, not just financially, but also to taking care of the children, and to the family home. This may also include how much each person contributed toward a pension, or another benefit.
How are Children Accounted for When Dividing Marital Assets?
Besides the considerations above, when dividing material assets, the Court will closely consider the welfare of any children. Generally speaking, the children will be one of the first and most important considerations, when resolving financial matters during divorce.
In a practical sense, this amounts to ensuring that the children are properly provided for. It is likely that the parent who is taking care of the child will be granted a larger share of the marital asserts, particularly if assets are limited. Regardless, the needs of the other party will also be accounted for, and the Court will attempt to grant a divorce financial settlement that is fair under the circumstances.
Are Prenuptial Agreements Considered When Dividing Assets?
Prenuptial agreements are drafted before a marriage, and these documents outline how financial assets will be divided if the couple were to get divorced later down the line. Technically speaking, these agreements are not legally binding, however the Court will consider them when dividing the material assets.
The Court is more likely to consider prenuptial agreements under these circumstances:
- Both spouses entered into the agreement freely
- Both individuals understood the agreement
- There was full financial disclosure on both sides
- The parties took legal advice before hand
How Can you Protect your Assets During a Divorce?
To protect your assets during a divorce it’s important to seek the advice of an expert divorce solicitor. A solicitor will be able to review your position, and offer tailor-made advice based on your circumstances.
It is incredibly important that you do not attempt to hide assets during the processes, doing so could land you in legal trouble and limit your changes of receiving a fair financial settlement.
As you can see the process of dividing assets during a divorce can be complicated, and there are many different factors at play. To ensure that you protect yourself it’s best to gain legal support from the get-go.
When you receive legal support, you will also have the option of entering into mediation processes with your ex-spouse, to help you reach a fair and mutually beneficial agreement without going to Court.
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