Navigating the Division of Assets in UK Family Courts during Divorce

Divorce and associated matrimonial financial issues can be a complex and emotionally charged process, especially when it comes to the division of assets.

In the UK, the family court plays a crucial role in achieving a fair distribution of assets between divorcing couples. The principle of equality is the starting point for the court when tasked with determining how the assets of a marriage are to be divided. 

Although the starting point for the court is one of equality, this is not a fixed rule.  The end result could be different, providing one spouse with a greater share of the assets, income, and pensions.

This is because the court must take a number of factors into account to determine a fair and equitable distribution based on the unique circumstances of each individual case.

Factors Considered by the Court

The court considers several factors when dividing assets. These factors are contained within Section 25 of the Matrimonial Causes Act 1973,  with the first consideration being given to any child/ren under the age of 18.

The court’s first concern will always be the welfare and needs of young children and how their needs will be met.  The decisive factor in the majority of cases is the reasonable needs of the parties and the children of the family.

The criteria as set out at Section 25 of the Matrimonial Causes Act 1973 are as follows:-

  1. Income, earning capacity, and financial resources: The court will consider the income, earning capacity, and financial resources of both parties, both currently and in the foreseeable future.
  2. Financial needs, obligations, and responsibilities: The financial needs, obligations, and responsibilities of each party are assessed, and needs will almost certainly focus on housing needs, by ensuring that the reasonable housing needs of the parties are appropriately met.
  3. Standard of living: The court will consider and where appropriate take into account the standard of living enjoyed by the family before the breakdown of the marriage and aims to achieve a fair balance for both parties moving forward.
  4. Age of the parties and the duration of the marriage: The age of each spouse and the length of the marriage can impact the division of assets. Long marriages typically result in a more equal division, while shorter marriages may lead to a more varied distribution.
  5. Any physical or mental disability of either parties to the marriage.
  6. Contributions to the marriage: The court considers the contributions made by each party to the marriage, including financial contributions, career sacrifices, and childcare responsibilities.
  7. Conduct of the parties: While the conduct of the parties is not usually a factor in asset division, in extreme cases, the court may take the view that the conduct is such it would be unfair to ignore it.
  8. Loss of benefits: The court considers any financial loss or disadvantage faced by either party due to the divorce, such as the loss of pension rights or insurance benefits.

Types of Assets

The family court will look at various types of assets during the division process, including:

  1. Property: This includes the family home and any other property owned by the parties.
  2. Savings and investments: The court will consider any savings, investments, or shares held by the parties.
  3. Pension rights: Pension rights are an important asset, and the court may decide to share pension rights or offset them against other assets.
  4. Business interests: If either party has business interests, the court will evaluate their value and consider how they should be divided.
  5. Debts and liabilities: Debts and liabilities, such as loans and credit card debts, are also taken into account during the division process.

The Courts also have the power to take into account non-matrimonial assets in so far as they are required to meet parties’ needs.

Methods of Asset Division

Once the family court has considered all relevant factors and assets, they will decide on the appropriate method for dividing them. These methods can include:

  1. Lump-sum payment: One party may be required to make a lump-sum payment to the other to achieve a fair distribution of assets.
  2. Property transfer or sale: The court may order the transfer of property or the sale of a property, with the proceeds divided between the parties.
  3. Pension sharing or offsetting: The court can order the sharing of pension rights or offset them against other assets.
  4. Maintenance orders: In some cases, the court may order one party to make ongoing maintenance payments to the other, particularly if there is a significant disparity in income or earning capacity.

How can we help you?

Understanding how the family court divides assets during a divorce is essential for navigating the process and achieving a fair outcome.

While the principle of equality serves as a starting point, the court takes various factors into account to ensure an equitable distribution tailored to each unique case.  The over riding principle being what is “fair and reasonable”.

Being aware of these factors and seeking legal advice at the earliest opportunity can help make the process smoother and more manageable for all parties involved.

If you are contemplating a separation from your spouse, or if you have already separated, and you and your spouse have a property, savings or pensions, then it is advisable that you seek legal advice as soon.

At Greens we have a team of qualified and experienced financial specialists who can advise the options available and help you navigate the process of separating the assets upon divorce.