When it comes to the breakdown of a marriage, it is natural for those separating to reflect on how they had both contributed towards the marriage in their own ways. As family lawyers, a common question we are asked is, ‘how will contributions be taken into account when dividing the assets?’
A further concern, commonly raised by the financially weaker party, is whether they will be left worse off because they did not contribute financially to the same extent as the other person, whilst they adopted the role of the primary carer or homemaker during the relationship.
Under section 25 of the Matrimonial Causes Act 1973, one of the factors that the Court may take into account when exercising its discretion and considering what a fair outcome may be is the contributions that each party has made. This is not however, limited to financial contributions and there is generally no distinction between financial contributions and domestic contributions of the parties. The wording of the Act is clear in this respect, the contributions referred to are:
“the contributions which each of the parties has made or is likely in the foreseeable future to make to the welfare of the family, including any contribution by looking after the home or caring for the family”
Contributions in divorce | Division in assets
The starting point in terms of the division of capital assets is equality and whilst there may be reasons to depart from equality in order to meet either party’s needs or those of the children, simply having contributed more financially does not justify a deviation from equality in the majority of cases.
There are however, some circumstances where contributions may be far more relevant, such as:
- Short marriages: in cases where there has been a particularly short marriage, there may be reason to depart from equality if the majority of assets were accrued as a result of one person’s contributions, prior to the marriage.
- Non-matrimonial property: where significant contributions have been made by one party, often by way of inheritance that has not been mingled, there may be a justification for the contributions to be taken into account by way of ring-fencing the non-matrimonial property or a departure from equality. The parties needs will be relevant under such circumstances.
- Nuptial Agreements: The presence of a pre or post-nuptial agreement can also have a significant impact on the way in which contributions are taken into account. If one party has brought significant wealth into the marriage and an appropriate nuptial agreement has been entered into, then it will likely hold persuasive weight and again, justify a deviation on the basis of the financial contributions made by one person and protect separate property.
- Special contributions: In extremely rare circumstances, special contributions may be taken into account, however, the threshold is exceptionally high and simply earning significantly more than the other person is certainly not enough.
Regardless of the circumstances, it is prudent to seek legal advice at the earliest opportunity to gain a full understanding of not only the process, but the weight likely to be placed on the various relevant factors the court can take into consideration.
If you have any further enquiries regarding contributions in divorce, please feel free to contact our Family Team and we would be happy to help.