Why a 50/50 division of financial assets is just a starting point

How you may be protected from losing out in a divorce settlement

There is still a perception of imbalance where one partner (often the woman) has given up work to raise a family and build a home, so becoming financially dependent on the other partner. But in reality, judges have a wide discretion to divide assets in a way that achieves a fair outcome. It doesn’t automatically follow that the higher earning partner will get the lion’s share of the financial settlement.

Divorce courts must consider several factors, including the income and financial needs of each party, the family’s standard of living before the marriage began to collapse, and whether there are any children. In terms of income, if either party has a high earning potential for the foreseeable future, then this will be an important consideration. Property and other financial assets are also included in the calculation.

One judge even coined the phrase “relationship-generated disadvantage” where, in a landmark divorce case (RC v JC), he awarded the wife an additional financial settlement by way of compensation for her loss of career. In another case (White v White) the judge awarded a settlement that “reflected the wealth of the parties, and not just their needs and requirements.” This decision emphasised that a judge should not make any presumptions of equality, but should ensure "the absence of discrimination", for instance, between a wage earner, and a child-carer, thereby recognising the non-financial contribution of the parent caring for children.

The law also applies to civil partnerships, who have the same rights as married couples when it comes to divorce matters, if they have been in the partnership for a year or more. The process for dissolution of a civil partnership is also very similar to the process for a divorce, which includes the distribution of financial assets. 

Pre- and Post-Nuptial agreements can make things easier

If you’re entering a marriage or civil partnership where there is a significant disparity in either income or capital, or where there are children from an earlier relationship, we suggest you consider drawing up a pre-nuptial agreement. This is a legal agreement that sets out how assets should be divided between a couple in the event of a divorce. It can include your rights regarding property, income, debt and other assets acquired individually (such as an inheritance) or together (such as joint purchases). 

Cohabiting couples that separate: no such thing as “Common Law Marriage”

If you are cohabiting things may not be as straightforward if you decide to separate. Even though it’s common to live together and not get married these days, there is a lot of misconception over financial rights when cohabiting.

For example, there is no such thing as “Common Law Marriage” – that is a myth. It categorically isn’t the case that couples who cohabit automatically have the same legal and financial rights as those in a marriage or civil partnership.

If you are living as an unmarried couple you have less rights, unless you have outlined your wishes in a cohabitation agreement. A cohabitation agreement can set out how you'll divide your finances if you separate, including joint bank accounts, your home and any other assets. However, without an agreement, an unmarried person’s rights in relation to property and assets are significantly affected. Furthermore, there can be serious consequences if there are children from the relationship.

If there are no children, the starting point is that neither party will have any ongoing financial obligations towards the other; they will be able to keep whatever assets or income they have in their sole name. Unmarried couples do not have the right to claim capital or maintenance against the other, irrespective of how long they have been together. A separating unmarried couple will ordinarily divide any assets held jointly in accordance with their legal ownership, then go their separate ways with no further financial obligations.

Where there are children from the partnership, one parent can make an application under Schedule 1 of the Children Act 1989 for a lump sum, settlement or transfer of property order. However, since the law is that the cohabitant herself (it is still often the mother making the claim) has no claims in her own right, any capital which is awarded to purchase a property where her and the children will live is likely to be held in trust until the child’s majority or the end of full-time education, whereupon the capital sum will revert to the payer (the other parent).

So if you are cohabiting, or planning to cohabit, we strongly advise that you consider a cohabitation agreement. While it may momentarily take some of the romance and excitement out of your decision to live together, it will give you both a clear understanding of your legal position and how your assets will be handled should the relationship break down. 

Child Contact Agreements

If there are children of the relationship upon separation or divorce, then we can assist in securing an amicable contact agreement. We believe that it is important to ensure that your child or children feel stable, safe and secure during the divorce or separation process.  So we will work with you to reach the best child contact agreement for everybody involved.

It’s more than likely that the child or children will live primarily with one parent and the other will maintain ‘contact’ at regular, pre-arranged intervals, for example, at weekends. If the break-up is amicable this can be arranged quite easily, however, if there is animosity between the parents then arranging future child contact agreements can often end up going to court.

Every situation is different, and your family needs to make some important decisions. Whatever your feelings, it’s vital to put your child’s needs first. These needs will vary depending on their age, health, abilities, life and family experiences and their personality.

Our specialist family solicitors recognise that the best outcome is one where everyone agrees on the contact arrangements. If you want to know more about your rights in this regard, need help with child matters, or want advice on whether a current agreement is legally sound, then please contact us.

What to do if you believe your relationship is over

We are experienced in family legal matters, so our first advice to you is this:-

Do not sign anything until you have obtained legal advice

It’s essential that you get legal advice and secure the services of a specialist in family law before you make any arrangements or agreements with your ex-partner, either verbally or in writing.

Our second suggestion is that you engage in mediation. Divorce law is complicated and expensive (especially now that there is limited legal aid funding) and the process can be protracted with many hurdles to jump over. This can bring its own share of suffering, especially if there are children involved. 

We can put you in touch with accredited family mediators. With divorcing couples, the mediator’s role is to help both parties identify, negotiate and come to a mutually acceptable agreement on the various issues and financial matters required to end their marriage without the need to go to court.

Mediation ensures that you – with your soon-to-be- ex-spouse or partner – will have full control over the divorce agreement and decisions you make.

If however, all other options have been exhausted, then rest assured we will uncompromisingly pursue your divorce settlement through the courts so that you are awarded your full rights under the law, financially and otherwise.

At Ash Hill Solicitors we specialise in all matters relating to family and divorce law and would be happy to have a 20-minute free initial discussion about any issues that you may have. So if you are considering a divorce, please contact us today.