Who gets what – dividing assets on divorce7th August 2015 11:05 am Comments Off on Who gets what – dividing assets on divorce
There are no hard and fast rules governing how assets should be divided on divorce. There is a broadly applied principal starting point of a 50:50 split. The objective is to apportion assets in a way that meets the needs of both parties and is reasonable and fair. If the parties can’t agree on how they should divide assets between them, they can ask the court to make the decision on their behalf, which is referred to as applying for a financial remedy order. The court will decide how the assets should be apportioned based on guidelines set out in the Matrimonial Causes Act 1973. Factors taken into account include the age, earning capacity, housing needs, standard of living enjoyed and the length of the marriage. The needs of any children involved are always considered as paramount. The major assets involved can often be the marital home and any pensions held by the couple.
The marital home
One spouse can buy the other out and keep the house, or the property could be sold and the proceeds divided. If there are children, a parent will often want to remain there with them. In that case, a Mesher Order may be appropriate as it allows the sale of a family home to be postponed until a specific date or trigger event such as the youngest child reaching 18. The property can then be sold and proceeds divided.
Many people think that a pension belongs solely to the party who is named on the policy, but that’s not the case. A pension is considered in the division of assets. Pension assets can be apportioned in various ways, by:
- offsetting the value of one spouse’s fund by transferring a lump sum or other asset to the other spouse
- splitting the pension fund into two separate pensions
- arranging that when the pension comes to be paid, a portion goes to the other spouse.
If you do reach an agreement with your spouse as to how to divide your assets on a divorce, it’s important to have a Consent Order in place as part of the divorce settlement. Without one, either side could make further claims for income or assets in the future. This could include claiming a share of any inheritance, lottery winning or pay rise. A consent order is a formal agreement sealed by the court, making it a legally binding document and therefore enforceable by the Court if one party defaults on the agreement. It also reduces claims being made in the future.
This post was written by Colemans Solicitors LLP