How is property divided on divorce?

How is property divided on divorce?

It’s probably the main question that anyone going through a divorce wants answered: how will their property be divided between them and their (former) spouse?

It’s a simple question, but one that doesn’t always have a simple answer. We’ll start with the basics.

 

Relevant factorsHow is property divided on divorce?

All of the circumstances of the case will be taken into account when deciding how property is divided on divorce. However, the law lists a number of factors to which particular regard must be given.

The first and most important factor is the welfare of any minor of any child of the family who has not attained the age of eighteen. This means, for example, that suitable housing will have to be provided for any such child, and their basic needs (food, clothing, etc.) will also have to be provided for.

The other factors include the following:

1. The income, earning capacity, property and other financial resources which each of the parties to the marriage has or is likely to have in the foreseeable future. Accordingly, for example, if one party has substantially more income than the other then it may be appropriate for the other party to receive a greater share of the capital assets.

2. The financial needs, obligations and responsibilities which each of the parties to the marriage has or is likely to have in the foreseeable future. This will very often be the most important factor in deciding how property is divided on divorce, unless the family is particularly wealthy. Each party will have financial needs, in particular for housing and income, and it may be that how those needs are met will be the decisive factor.

3. The standard of living enjoyed by the family before the breakdown of the marriage. This essentially means that the division of property should try to ensure that the parties continue to enjoy the same standard of living after the divorce, if possible.

4. The age of each party to the marriage and the duration of the marriage. For example, age could be relevant to needs, and after a very short marriage it may be appropriate to simply return the parties to the position they were in before the marriage.

5. Any physical or mental disability of either of the parties to the marriage. Obviously, this may affect their needs.

6. The contributions which each of the parties has made or is likely in the foreseeable future to make to the welfare of the family, including any contribution by looking after the home or caring for the family. Thus, for example, a wife’s contribution towards bringing up the family may be considered to be equivalent to the husband’s financial contribution towards the marriage.

7. The conduct of each of the parties, if that conduct is such that it would in the opinion of the court be inequitable to disregard it. Note that the conduct has to be quite serious – it is very rare that conduct makes a difference to a financial settlement.

8. The value to each of the parties to the marriage of any benefit which, by reason of the dissolution or annulment of the marriage, that party will lose the chance of acquiring. The main such benefit is under the other spouse’s pension.

 

Fairness and the sharing principle

As the reader may have noted, none of the above states what should be the aim of the law when deciding how property should be divided on divorce. However, the courts have made it quite clear that, implicitly, the objective is to achieve a fair outcome.

The question, then, is: what is a fair outcome? Well, of course it will vary from one case to the next, but there are certain other principles that should be borne in mind.

We will not go into all of those principles here, but the most important is what is known as the ‘sharing principle’. This essentially states that, whilst there is no presumption that property should be divided equally between the parties, a departure from equal division should only be made if there is a good reason for doing so.

Accordingly, in a case where the circumstances of the spouses are similar then it is likely that there should be a simple equal division of the matrimonial assets (i.e. the assets that have accrued during the marriage).

On the other hand, as indicated above, if (for example) one party has significantly less income than the other, or greater needs than the other, then it may be appropriate for them to receive more than half of the matrimonial assets.

 

Further information

We hope that the above is useful, but it just sets out the basic principles, in a simplified form. If you would like more detailed advice, including how these principles may apply to your particular situation, we can help. We also have a free online system providing information on a range of family matters, which you can find here.