How do you Split Assets in a Divorce in the UK?
Family home, pensions, inheritances, business assets, there’s a lot to think about. And is it matrimonial or non matrimonial property?
The starting place is a fifty/fifty split but there are considerations under s.25 Matrimonial Causes Act –
- the welfare of any children
- income, earning capacity, property
- financial needs
- standard of living
- ages and length of marriage
- disabilities
- contributions
- conduct if inequitable to disregard it
How do we reach an agreement about assets?
If you can reach an agreement, well done, but run it past an experienced family lawyer to make sure it’s fair. If you can’t agree try –
- collaborative law
- mediation
- negotiation
- arbitration
- Court proceedings – the final resort
Whichever method you will need to give full and frank disclosure of your finances. See my blog Financial Disclosure on Divorce, 10 things you need to know. And you need a Court order to protect you. See my blog How do I get a Consent Order? A Simple Guide
What about my home?
The options are –
- one of you buys the other out, or
- you sell and divide the proceeds, or
- one of you keeps the house and the other has an interest in it which they realise in the future. This is called a charge.
What is a charge on the home?
This works well if there are children. You can’t afford to buy each other out and a sale won’t realise enough to house you both. Perhaps there’s only a tiny equity. But how is this fair for the parent who won’t live there and won’t be receiving any cash? The answer is an interest in the property, a charge representing a certain percentage of its value. This means in the future you will get capital from the property.
When do I get the money from the charge?
There are various ways it can be worded. For example, when the children turn eighteen years of age or when the parent living there remarries or cohabits for a certain period.
What about pensions?
Pensions can be significant especially if one of you works in the public sector. In the heat of the moment one of you might say, Keep the pension, I want the house! But this isn’t always wise. It might be better to sell the house, split the proceeds and downsize so you can have a pension sharing order to provide you with income in retirement. See my blog Pensions on Divorce, what can you expect.
How will the assets be split in my case?
It really is impossible to generalise but I can give you a couple of examples.
Sue and John – older couple, no mortgage, no kids
So you’re both in good health and you have a range of assets – nice house, couple of cars, pensions, savings. You are likely to come away with half each, a fifty/fifty split. How this is achieved is up to you. One of you buys the other’s interest in the house. Or you sell it and split the proceeds. You could say, I’ll have the yacht, you have the timeshare. Tot it up so you make sure you’re getting equal value. Don’t forget to get a Consent Order – see my blog How do I get a Consent Order? A Simple Guide
Emma and Mike – two kids, big mortgage, little equity
This is more tricky. The top priority is a home for the children and the only option is the family house. A transfer of the house to Emma with a charge to Mike might be the answer.
Olivia and David – short marriage, no kids
The rules are different for short marriages, see my blog Short marriages, 10 things you need to know.
What about my inheritance?
It depends on –
- when you received it
- whether you mixed it with the matrimonial assets or kept it separate
- whether there are enough non-inheritance assets to provide a fair settlement
See my blog How to protect inheritance on divorce.
I have a business, what will happen to that?
See my blog How to protect business on divorce
But I contributed everything to this marriage!
Sometimes you can keep non matrimonial assets out of the pot for division. These include –
- Assets built up before the marriage
- Inheritances
- Businesses
But non matrimonial assets will go into the pot if this is the only way for example to answer the children’s need for housing. See my blog Ring fence and protect assets on divorce.
What is a clean break, can I still get maintenance?
See my blog Maintenance and clean break on divorce.
How do you Split Assets in a Divorce in the UK?
Contact Family Lawyer Joanne Houston on 01962 217640 for an initial free of charge consultation on the question How do you Split Assets in a Divorce in the UK. In this 20 minute session she will review your situation and how you can achieve your objectives.
JUST FAMILY LAW are specialist divorce and family lawyers. We offer Pay as you go costs. We offer Collaborative law solutions tailored to your family’s needs.
The topics covered in this blog post How do you Split Assets in a Divorce in the UK? are complex. They are provided for general guidance only. If any of the circumstances mentioned in this blog apply to you, seek expert legal advice.
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