Of all the emotions, stresses and complexities of divorce, the division of assets can be one of the most difficult aspects to understand and come to terms with.
It’s important to grasp that there is no fixed formula – so it’s not quite as simple as a 50/50 split in most cases. The law aims to be fair, considering the needs of both parties and any children involved. But it may not be needed if you can agree to the same terms.
Here’s our essential guide to help you navigate the process.
What counts as a marital asset?
In most cases, the assets acquired jointly or by either spouse during the marriage will be considered for division. This includes:
- The family home: Usually the most valuable asset. Whether it’s owned outright or with a mortgage, the value is divided – though the final decision on who keeps the home will depend on various factors such as childcare responsibilities.
- Savings, pensions and investments: Any money saved or invested during the marriage will be considered for division. This can include pensions, which are often substantial, although they may be overlooked.
- Personal belongings and vehicles: High-value items, such as cars or artwork, might be included depending on their individual worth.
Assets acquired before marriage, inheritances or gifts may be excluded but not always. If any of these have mingled with marital finances, they could be up for consideration.
How are assets divided?
You and your ex-partner can agree on how to divide your assets, but it won’t be legally binding until you get a consent order. If you can’t agree, mediation is often advised to help reach a settlement. Otherwise, the case might have to go to court.
The courts always aim for a fair division of assets rather than a strict 50/50 split. What is considered fair? It’s usually determined by these factors:
- Needs of both parties: Housing and financial needs take priority, particularly if there are children.
- Financial contributions: Both spouses’ financial contributions are usually taken into account. However, this doesn’t mean that a higher earner automatically receives a larger share. Contributions as a homemaker or primary carer are equally valued.
- Length of marriage: A longer marriage may result in a more equal split, while shorter marriages could involve dividing fewer joint assets.
The role of mediation and negotiation
If an agreement can’t be reached, couples are encouraged to try mediation before taking matters to court. A mediator can help you both reach an agreement on asset division without the emotional toll and financial cost of court battles.
However, if mediation fails or one of you refuses to engage, your assets may need to be divided in court.
Court involvement
Where necessary, a judge will make a decision based on what they consider fair. As with any, your case is unique and the court will consider all factors. This can include standards of living, earning capacities and future needs.
If there’s any chance that your divorce settlement needs to be decided in court, getting legal advice is crucial. They can advise you more on the process, what you need to do and what to expect when the case goes in front of a judge.
These are the fundamentals you should be aware of when it comes to dividing assets during a divorce. Make sure to disclose all assets and look to the future when the time comes.
