Divorce and Family Assets
When a couple decides to get a divorce, there are usually financial issues to be sorted out. Most of those issues relate to maintenance (support) and family assets. Often the matrimonial home is the most significant family asset. What follows is a brief discussion of the division of family assets.
What are family assets?
Note the following regarding family assets:
Family assets are normally assets owned/earned by the spouses during their marriage. Examples are a family home (often called the “matrimonial home”), a car, savings, a holiday cottage, a boat, and a pension.
Normally assets owned by either spouse before the marriage do not constitute family assets. However, depending on the circumstances, if one spouse owns an asset before marrying, but buys it so that the spouses can live together or use it together, then that asset will be considered as a family asset. Thus, a matrimonial home can be a family asset in that situation.
The Court has Wide Powers to Distribute Family Assets
The court has a very wide discretion to redistribute family assets. Although the legislation regarding the distribution is quite short, each case is decided on its merits. This is good in that every case is decided individually, but this also has the effect of lack of certainty – it is difficult to predict what a court will do in any given case. However, the following are the basic principles.
The children come first .in any financial arrangements on divorce.
A judge can order periodic child and spouse maintenance (support) payments, and can order that those payments be secured against property. For example, if you must pay spousal support and those payments are secured against your holiday cottage, then if you do not make the payments, your holiday cottage can be sold so that the payments are made from the sale proceeds of the cottage.
A court can also order lump sum payments. For example, if you have £20,000 in your bank account, a judge can order a transfer of, say, £10,000 to your spouse either by way of support or property adjustment. These payments can also be secured against property.
A court can make property adjustment orders, that is, order a transfer of property from one spouse to another if the judge feels this is necessary to come to a fair arrangement.
Many judges follow the “clean break” principle if the marriage has certain characteristics:
The marriage has been short-lived
There are no children
The parties are young
There are sufficient assets to satisfy each party’s current maintenance needs
For more information on:
- Factors the court considers when making its orders
- Orders regarding the matrimonial home