When a marriage breaks down and it leads to divorce the financial consequences and considerations that arise require careful consideration. Viv Clough, Bendles’ highly experienced Matrimonial Consultant, outlines how assets are typically divided between spouses.
‘As a first step it is a basic requirement that both parties give full disclosure of their income, savings, property and pension benefits. Once this step has been taken the next step is to consider how the various assets should be distributed and apportioned to achieve overall fairness. There is no set formula to assist in this exercise rather it is a careful balancing exercise with the following matters to be taken into account.
(a) All the circumstances of the case, first consideration being given to the interests of any children under the age of 18
(b) the income, earning capacity, property and other financial resources of both parties, including the possibility of an increased earning capacity and taking account of accumulated pension benefits
(c) the financial needs, obligations and responsibilities
(d) the standard of living enjoyed before the marriage broke down
(e) each party’s age and the length of the marriage
(f) any health problems
(g) the respective contributions made by the parties or likely in future to be made to the welfare of the family. This includes contribution by looking after the home or caring for children
(h) conduct if it would be unfair to leave this out of account
(i) loss of benefit arising from the divorce such as loss of pension
Although there is a reference in “(h)” to conduct or put another way ‘bad behaviour’ it is in fact only in very rare and very exceptional cases that this would be taken into account. Many parties to divorce wrongly believe for example that as their former partner has deserted them or is living with someone else they should then suffer a financial penalty and receive less of the assets than would otherwise be the case.
There is a view that divorce proceedings cannot be concluded until all financial matters have been agreed. This is not always the case. A property could for example be sold or transferred by agreement. Where pensions are concerned however, and a share of a pension is being sought divorce proceedings should not be concluded until a Pension Sharing Order has been agreed and incorporated into a Court Order. A Pension Sharing Order can only be put into effect once a divorce is concluded.
One area that often generates particular irritation and animosity is that of spouse maintenance. In determining the level of maintenance and to whom it should be paid requires a detailed consideration of the matters outlined above and particular “in (“c”)”. Whoever seeks maintenance must establish a realistic and reasonable case of need and not simply an exaggerated expectation of need. They must also demonstrate that they have, insofar as is possible, maximised any earning potential they may have. They should not view their former partner as a meal ticket for life. They are expected to move towards financial independence. It follows that maintenance can be for a fixed term or on a continuing basis. It can be varied upwards, downwards or terminated by agreement or court order. It ends automatically on the re-marriage of the recipient.’
If you require advice or legal assistance with divorce proceedings, contact our Family Law department today.
Written by Viv Clough, Matrimonial Consultant