In the context of divorce, there is often a misconception that the higher earner keeps most of the assets upon separation.
This article is part of a series of articles that aim to debunk the top 10 myths and misconceptions around divorce and finances that we have come across with our clients.
Is it true that the higher earner keeps the majority on divorce?
It is incorrect to assume that if one party earned significantly more than the other and made a greater financial contribution during the marriage, then they will retain the lion’s share of the assets on divorce.
What do the Courts take into consideration when dividing matrimonial finances?
When considering what each party has contributed to a marriage, the court do not make a distinction between who is the bread winner and who is the home maker. Everyone is at liberty to decide how they arrange their lives and responsibilities within their marriage, the court will not therefore punish the financially weaker party simply because a joint decision may have been made that they will assume the role of the home maker or sacrifice their career to support the family.
When considering how the matrimonial finances should be divided, the Court must have regard to the factors set out at S25 Matrimonial Causes Act 1973.
The first consideration will be the needs of any minor children of the family, thereafter, the remaining factors are taken into account. This is not a straightforward process as there are numerous competing factors to be considered and it is a highly discretionary area of law. The outcome of each case will be dependent upon the individual circumstances and there is no formula that can be applied to each case; the concept of fairness cannot be calculated with precision.
The financial needs, obligations and responsibilities of the parties will need to be considered. When considering an agreement, the Court should be satisfied that the parties respective needs can be met adequately from the division of assets available, it is not simply the case whereby each party will retain the assets they brought into the marriage or recover their financial contributions in full. If an agreement appears very one sided, without adequate provision for the financially weaker spouse, the court should refuse to approve the order.
Whilst there may be circumstances when non-matrimonial assets can be ring-fenced, if there are sufficient matrimonial assets to meet the parties needs, the vast majority of cases will be assessed on a need’s basis. This can lead to a deviation from equality and the financially weaker party receiving a greater share of the assets or ongoing support from the financially stronger party.
To see the full series of our Top 10 divorce finance myths, please click here.