Often clients come to us with the misconception that on divorce assets are always divided equally. Whilst in many cases this is the starting point, there can be reasons to depart from equality.
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.
What is the primary concern when assets are divided on divorce?
The Court’s primary concern relates to the needs of minor children. Therefore if there needs to be a departure from equality to enable the children’s needs to be met, that will usually be the approach taken by the Court. The financial needs of each spouse are also taken into consideration, but the court will also consider other factors such as the length of the relationship.
What happens when there are pre-marital assets?
If it has been established that needs (outlined above) can be met from the available resources, there can be other reasons to depart from equality.
If one spouse had a significant amount in unmatched assets at the start of the relationship which has not been shared with the other spouse, and the needs of the other spouse can be met from a share of the funds built up during the relationship, very often it can be argued that the pre-marital assets should be retained by the person who had them prior to the relationship. The same can be said of inheritances that have been received during the marriage and not shared with the other spouse. This is particularly the case if the inheritance came closer to the end of the relationship.
How are assets split when there is a pre or post-nuptial agreement?
Another reason to depart from equality can be the existence of a pre or post-nuptial agreement, particularly if they have been entered into without duress, with the benefit of legal advice, and with a full appreciation of each other’s financial positions. Whilst pre and post-nuptial agreements are not technically binding, they are extremely persuasive to the Court, and generally, they should be upheld unless there is a very good reason why there should be a departure from the terms agreed. If there is a departure from the terms of the agreement, the starting point should be the terms of the agreement rather than a 50-50 arrangement.
Divorce assets are not always divided equally
Assets will not always be divided equally, and in most cases, there are reasons for a departure from equality. However, each divorce will be determined on its own particular facts and circumstances, and it is therefore very important to take advice at an early stage to see what you may be entitled to on divorce.
To see the full series of our Top 10 divorce finance myths, please click here.