How Are Assets Divided on Divorce?

A common assumption is that every asset will simply be divided equally when a marriage ends. The position is more nuanced.

Equal sharing may provide a useful starting point for matrimonial assets, particularly following a longer marriage. However, an equal division is not guaranteed and may not meet the needs of both parties and any children.

Matrimonial and non-matrimonial assets

Matrimonial assets are generally those acquired or built up during the marriage. These may include:

• The family home

• Savings accumulated during the marriage

• Investments

• Pension benefits

• Business interests

• Other property purchased during the marriage

Assets owned before the marriage, received through inheritance or acquired after separation may sometimes be treated differently.

However, the distinction is not absolute. A non-matrimonial asset may still need to be considered where the available matrimonial assets are insufficient to meet the parties’ reasonable needs.

The importance of financial needs

Where resources are limited, the court’s priority is often to ensure that practical needs can be met.

This may include considering:

• Suitable housing for each party

• The housing needs of children

• Mortgage capacity

• Income and earning capacity

• Debts and regular expenses

• Health or caring responsibilities

A needs-based outcome can result in one person receiving more than half of the available assets.

What happens to the family home?

The family home is usually central to the financial settlement.

It is commonly treated as a matrimonial asset, even where one spouse owned it before the marriage or it is registered in one person’s sole name. Its treatment will depend on the wider circumstances, including the length of the marriage, contributions, available resources and the housing needs of any children.

Possible outcomes may include:

• Selling the property and dividing the proceeds

• Transferring the property to one spouse

• Delaying a sale until a specified event

• One spouse buying out the other’s interest

The correct outcome cannot be determined by ownership alone. The family’s complete financial circumstances must be considered.

The next part of this series examines pensions, which can be among the most valuable and easily overlooked matrimonial assets.

Elizabeth Stocker can help identify the assets that form part of the financial settlement and advise on proposals for the family home, savings, investments and other property. Book an appointment with Elizabeth or complete the enquiry form.