What assets are included in a divorce?
Matrimonial assets are those acquired during the marriage and are assets that are divided in a divorce. These can include:
- Property: This refers to the marital home and any other properties bought during the marriage such as second/investment properties. Often the decision on who keeps the family home is related to child arrangements. There are various ways a home may be dealt with. Such as one owner may buy-out the interest of the other, or if the court thinks it appropriate, there may be an order for sale with clarification as to how the equity is to be split between the owners. If appropriate, the home may be preserved until the youngest child is 18 years old and then sold.
- Pensions: A pension sharing order may be appropriate if one party has significantly more in pension provision than the other. Rather than looking at pension values and dividing these equally, the court will usually try to bring about parity of income on retirement. This factors in aspects such as life expectancy and expected retirement ages.
- Savings: This includes any money in bank accounts and savings accounts plus cash.
- Investments: Any stocks, shares, share save schemes or other investments such as ISAs will be looked at. If the owner of that assets wishes to retain it, fairness can be achieved by offsetting the value of that asset against other assets the non-owner gets to keep.
- Physical items: Items such as furniture and household items purchased for the marital home, as well as vehicles.
Further information on financial settlements can be found on our main financial matters page.
How are assets divided in a divorce?
Matrimonial assets are not necessarily divided on a 50/50 basis, the aim for the division of assets in a divorce is based on fairness, so each party can have their needs met.
Both parties are expected to make full disclosure of all assets they own. Assets acquired before the relationship or after the separation are not generally considered as matrimonial assets, however these can be included where the court feels it has to factor them in in order to meet ‘need’.
The concept of needs is interpreted broadly and generally speaking any case with less than £1 million is arguably a ‘needs’ case.
We understand that each case is unique and our divorce lawyers with expertise in division of assets can advise on the best action to ensure all needs are met. They can also give guidance on what a judge is likely to order if agreement can’t be arrived at and the court has to be brought in to decide division.
Considerations the court makes when dividing assets in a divorce
The court will consider factors set out in the Section 25 of the Matrimonial Causes Act 1973 when dividing assets in a divorce, which include:
- Duration of the marriage: the pre-marital permanent cohabitation period will be included when calculating the marital term. This includes from when the parties first lived together and that seamlessly flowed into a marriage.
- Age of each party: disparities in ages will need to be considered particularly when looking at pension provision.
- Income and earning capacity: Many parties reduce their income when they realise a divorce is about to happen. The courts will look at the earning capacity and often presume that once the stress of the divorce is over, a party will return to the higher income position they were in before the divorce occurred.
- Welfare of any children: this takes into consideration children under 18-years-old or with disabilities meaning they may require ongoing care.
- Contributions of each party: this includes non-financial contributions such as caring for children or maintaining the home.
- Standard of living: enjoyed by the parties before the separation or breakdown of the marriage.
- Financial resources: if a party has recourse to trust fund income, even if this is as a discretionary beneficiary, the court can consider whether past provision is likely to continue.
- Physical or mental disability: particularly where this may impact a parties ability to self-support in the future.
Our divorce lawyers can help by putting together proposals for settlement as a starting point for discussions following disclosure of assets or by applying to the court if agreement can’t be reached.
Get in touch with a legal expert from our family team to discuss and find out more.
What assets cannot be split in a divorce?
Non-matrimonial assets are generally excluded from the division of assets in a divorce. These are assets that were acquired before the relationship or after the date of separation. For example:
- Property acquired before the relationship.
- Inheritance received after separation.
- Substantial gifts received before the relationship.
If prenuptial and postnuptial agreements were made these can be helpful in setting out and defining what is considered as non-matrimonial property and assets, however they are not guaranteed to be upheld.
The court may consider non-matrimonial to be included in the division of assets on a divorce, when it is felt the parties ‘needs’ cannot be met with the matrimonial assets.
Our divorce lawyers can help you understand your assets.
Can you protect any assets during a divorce?
Occasionally one party may attempt to remove assets from the consideration of the court by transferring or gifting them to friends or family. Under Section 37 Matrimonial Causes Act 1973 the matrimonial court can set aside any disposition of an asset if it is satisfied that the disposing party made the transaction with the intention of attempting to place the asset outside of the remit of the court.
Any transactions which took place within three years of the divorce will be presumed to have occurred with the intention of defeating the other parties claim. This is particularly hard to argue against where no valuable consideration was given by the receiving party in return for the asset.
Why choose SAS Daniels as your division of asset lawyers
We aim to ensure that both parties can move on with their lives following a divorce and ensure both their needs are met as fairly as possible.
Our legal experts can offer advice and support you with the division of assets in your divorce with various settlement options, including buy-out, sale, transfer and apportionment.
