How are assets divided after a divorce?
After child custody, financial assets are the second most contentious part of a divorce. Just like child custody, you and your ex-partner can choose exactly how to divide your money and property. However, if you can't agree, a court will decide for you.
If you and your ex-partner can agree how to divide financial assets you won't have to complete any official paperwork. However, your agreement will not be legally binding and can be challenged in the future.
It is best to obtain a 'consent order', that confirms how you will be dividing property, money, savings and investments. It can also include arrangements for maintenance payments. You will need a solicitor to help you draft a consent order. Both you and your ex-partner will need to sign the consent order and complete two forms:
The two forms and the consent order are then sent to court for a judge review. This costs £50.
Once the judge approves the consent order, it is legally binding. However, they can refuse a consent order if they think it is unfair. This will result in either the order being changed or you needing to submit a completely new consent order.
If you and your ex-partner can't agree how to divide your financial assets you must try mediation before apply to a court. If you are able to agree through mediation, you will follow the same process above.
In certain circumstances you will not need to try mediation before applying to a court. These include:
- Domestic violence
- Social services involvement
If you can't agree how to divide your assets you can ask the court to make a 'financial order'. When making a financial order the court will take various factors into account, including:
- The income and earning capacity, property and other financial resources that each of you have or are likely to have in the future
- The financial needs, obligations and responsibilities each of you have or are likely to have in the future
- The standard of living enjoyed during your marriage
- Your age and the duration of the marriage
- Any physical or mental disabilities either of you might have
- The contribution each of you has made or is likely to make in the future to the welfare of your family
- The conduct of each spouse, if the conduct is such that it would be unfair to disregard in the opinion of the court
- The value of each spouse that the other would lose because of the divorce
The first consideration of the court will be the welfare of any children.
The court also applies two principles:
- Sharing: marriage is a partnership and the fruits of that partnership should be shared.
- Compensation: if one spouse may have lost out the chance of accruing assets, income or pension provisions they should be compensated for it.
Each spouse must provide evidence of their financial circumstances for the court to consider the factors above and come to a decision.
There is a lot of uncertainty if you ask a court to decide on your financial assets for you. That is why we strongly recommend you try and come to an agreement outside of court with your ex-spouse.
If you're considering divorce or have any questions about financial assets or any other aspects of divorce, please contact us in London (West Drayton) on 01895 449288 or in Hertfordshire (St Albans) on 01727 840900 or by email via our contact page.