How do you Split Assets in a Divorce in the UK?

How do you Split Assets in a Divorce in the UK

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 –

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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How do I get a Consent Order? A simple guide

How do I get a Consent Order?
Rosalind Russell in the 1949 movie ‘Tell it to the Judge’ – and that, in essence, is what a Consent Order is all about

  What’s a Consent Order?

You’ve agreed the matrimonial finances. The next step is to get a Consent Order so you know it’s done and dusted. Once it’s made, neither of you can:

  • go back on the agreement
  • come back for a second bite of the cherry.

  How do I get a Consent Order?

Contact an experienced family lawyer because your Consent Order needs to be technically accurate.

  When’s the best time to get a Consent Order?

As soon as you are in agreement. But did you know that a Consent Order cannot be made by the Court until your decree nisi has been pronounced?

  What do I send to the Court?

  What’s a ‘statement of information for Consent Order’?

This sets out your finances. It’s vital to complete it accurately. See my blog Financial Disclosure on Divorce – 10 Things You Need To Know for the dire consequences of being less than frank in financial disclosure.

  What will the Court do?

The Court’s duty is to make sure the Consent Order is fair, makes proper financial provision, and is technically correct. The Court will firstly consider the welfare of any children. It will then consider your –

  • income, earning capacity, property
  • financial needs
  • standard of living during marriage
  • ages and length of marriage 
  • disabilities
  • contributions made 
  • conduct if it would be inequitable to disregard it

If the Court isn’t convinced it’s fair, or if the order is technically incorrect, they will raise queries. These can mostly be dealt with by letter. Occasionally there can be a short Court hearing.

If you want to make sure you come to a fair agreement, read my blog Financial Settlement on Divorce, How To Get The Best One For You – 5 FAQs.

  How can a Consent Order be wrong?

If it’s unfair. For example if one of you ends up with valuable assets but the other doesn’t. But this can sometimes be fair if there are unusual circumstances such as a short marriage. See my blog Short Marriages – 10 Things You Need To Know

  How else can a Consent Order be wrong?

If there are technical errors. The Court can only make certain orders. These include:

  How to get a Consent Order right

The simplest answer is to ask an experienced family lawyer to draft it for you.

  What’s a recital/preamble?

The paragraphs above the words “By Consent it is Ordered“. What’s included?

  • Agreements that can’t be orders
  • Undertakings to the Court (an undertaking is a solemn promise to the Court)

For example to return the oil painting of your mother in law. Or to take turns looking after Rover, the beloved family pet. Or to pay the mortgage on the family home. This is relevant if the house will be yours but the mortgage is still in joint names because of financial constraints.

  But what happens if my ex ignores what’s in the recital/preamble?

You can make an application to the Court for enforcement.

  When does a Consent Order come into effect?

When it’s sealed by the Court, or when your decree absolute is obtained, whichever is later.

  How do I get a Consent Order?

Contact Family Lawyer Joanne Houston on 01962 217640 for an initial free of charge consultation on the question How do I get a Consent Order? 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 I get a Consent Order? 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.

image credit for How do I get a Consent Order? Columbia’s ‘Tell it to the Judge’

 

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Financial Disclosure on Divorce – 10 Things You Need To Know

financial disclosure1.    What are your options when it comes to financial disclosure on divorce? The answer is there are few because the rule is full and frank disclosure backed up by documentary evidence.

2.    Yes, but is it actually a matrimonial asset? This is a vital question but it is addressed after disclosure.  So yes, you have to disclose the house you owned before the marriage, the pension you paid into since you started work, the inheritance that post dated your separation. But disclosing an asset doesn’t mean you lose it if there are good reasons why some or all of it should be ring fenced. See my blog Ring fence and protect assets on divorce.

3.    Disclosure is inevitable. Whether it’s voluntary or part of the court process at some stage it is likely you will be called upon to disclose your assets and income on either a Form E Financial Statement, or in a Statement of Information for Consent Order (which has to accompany an agreed order to the Court).

4.    Thinking of hiding your assets in a new account or business? That won’t work either. These are all disclosable, even assets in a trust. By all means argue that the trust should not be taken into consideration after you have disclosed it.

5.    What happens if you don’t disclose some of your assets? You will be surprised how inquisitive divorce lawyers can be not to mention forensic accountants. As a result of their investigations your ex could make an application to the Court for you to disclose the asset and all relevant documentation relating to it.

6.    But how bad can it really get? Worst case scenario, you end up in prison for contempt of court. More likely is a costs order and “adverse inferences” being drawn as to the extent of your assets. If this happens the Court can decide you’ve got more assets than you are letting on and order a larger share to your ex – not a good outcome.

7.    Have you hidden away an asset or a lucrative plan for your business and no one has noticed? You will always be looking over your shoulder as your failure to disclose is likely to be discovered.

8.    In cases of non disclosure or fraudulent disclosure the Court order finalising the matrimonial finances can be overturned and you will find yourself back at square one again – older, wiser, but sadly a great deal lighter in your pocket.

9.    So no, there’s no excuse. The rule is full and frank financial disclosure. Hiding assets or income will only serve to drag out negotiations. Furthermore it can result in an expensive and never ending court case. And it can end in imprisonment.

10.  Making full disclosure leads to quicker and easier outcomes, lower legal costs and less emotional fallout for you and the children.

Financial Disclosure on Divorce  …

Contact  Joanne Houston on 01962 217640 for free advice on Financial Disclosure on Divorce. In this 20 minute session we will review your situation and how you can achieve your objectives.

See my blog about how to get the best financial settlement on divorce.

Did you know there are different rules for Short Marriages?

JUST FAMILY LAW are specialist divorce and family law solicitors offering personalised legal solutions.

Visit our website just-family-law.com

The topics covered in this blog post are complex and are provided for general guidance only. If any of the circumstances mentioned in this blog might have application to you, you should seek expert legal advice.

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