How Assets are Divided on Divorce

Section 25 of The Matrimonial Causes Act 1973 provides a statutory framework of the factors which are relevant to how matrimonial assets are divided up on divorce.

The most important and paramount consideration is the welfare of any child of the family under the age of 18. Consideration will be given first and foremost to providing accommodation for the children.

In practice, this means that the appropriate outcome will be one which balances the financial needs of each parent, whilst at the same time making appropriate arrangements for the children’s financial needs.

There are other factors which are also relevant:

  • The income, earning capacity, property and other financial resources which each party has, or is likely to have in the foreseeable future. In the case of earning capacity, it would also be relevant to examine whether it was reasonable to expect one party to take steps to acquire an earning capacity;
  • The financial needs, obligations and responsibilities which each of the parties to the marriage has or is likely to have in the foreseeable future;
  • The standard of living enjoyed by the family before the breakdown of the marriage;
  • The respective ages of the parties and the length of the marriage;
  • Any physical or mental disability of either party to the marriage;
  • 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;
  • The conduct of each of the parties in rare and exceptional cases; and
  • The value to each of the parties to the marriage of any benefit which, by reason of the divorce, that party will lose the chance of acquiring.

The court has wide ranging powers to order:

  • An immediate or deferred sale of property;
  • A transfer of property;
  • A payment of a lump sum;
  • Maintenance pending suit;
  • Interim and continued maintenance payments;
  • Child maintenance payments in limited circumstances;
  • Pension Sharing; and
  • An injunction to freeze assets.

There is no automatic guarantee that assets will be shared equally, but often this is the most appropriate solution to produce fairness for both.

Consideration will be given as to whether it is possible to achieve a clean break financial settlement, which will prevent either party from making any subsequent financial claim against the other.

Leading case law is useful in providing guidelines for the legal profession when considering how assets should be divided. For example, financial contributions can be regarded as equal to home making contributions.

Therefore, a housewife should not be penalised for remaining in the home and looking after the children whilst her husband goes out to work. The court will wish to achieve equality in this regard.

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