Facing the end of a marriage and filing for divorce can be an upsetting and traumatic experience for both parties. Uncertainty or disagreements surrounding how assets are going to be fairly divided between the separated couple can further add to this stress.
Divorce can be a longwinded and costly experience for many, so it’s important that you understand your rights and entitlements as soon as you start to think about divorce proceedings to significantly reduce stress and help manage your expectations.
Here, we’ll be discussing different types of assets, the division of debt and how to make divorce financial settlements legally binding.
The division of assets
When reaching a divorce financial settlement, there are two types of assets to take into consideration.
Matrimonial assets are the financial assets that have been accrued during the course of the marriage and typically will include items such as:
- Any property acquired during the marriage, for example the family home
- Cash in the bank (e.g. current accounts)
- Furniture and appliances
- Stocks, bonds and mutual funds
Other assets are also considered during divorce proceedings and include non-matrimonial assets. These can include the following:
- Cash gifts
- Capital Interest
Unlike matrimonial assets, non-matrimonial assets are often much harder to define and have no standard definition to work to. This makes it much more challenging to divide such assets and means it may take longer to reach an agreement between both parties on how they should be fairly divided.
It is illegal to leave any assets undeclared, so you must be 100% transparent with your solicitor from the start to avoid any unnecessary setbacks later on in the process.
How are assets worked out?
All assets, regardless if they are matrimonial or otherwise, have a financial worth. Working out the worth of such assets can take time and significantly hold up the entire divorce process. It is a good idea to be as prepared as you possibly can before a divorce financial settlement begins if you wish the marriage to be legally dissolved as quickly and painlessly as possible.
A divorce solicitor will be able to help you list any assets that potentially need to be divided and assign a provisional value to them. This will include the property value of the family home and any real estate you may have, total household income, total debts from the marriage, valuable assets such as vehicles and jewellery as well as any investments you hold.
Once you have a clearer picture of your assets and the other party has followed the same process, it will be much easier for the courts to decide on a fair split. Aim to be as clear and transparent as you possibly can as the court will not look kindly upon any party that has tried to conceal assets from the court or their former spouse.
Debts accrued during the marriage
As many people going through a divorce are firmly focused on the division of any monies or assets, few consider the question of debt that may have been accrued during the marriage.
Such debts include mortgages, credit cards, loans and any other financial commitments you entered into as a couple. These must be taken into consideration as part of the final financial settlement.
Again, it is up to the solicitors and court to reach a decision on the amounts that each person is responsible for going forward. Having an experienced divorce solicitor on your side can help you put forward a case on what you consider fair when it comes to the division of debt.
This is often one of the biggest sticking points when it comes to divorce financial settlements, but an experienced family law solicitor can help you find evidence that might strengthen your case in this area including bank statements, loan agreements and credit card paperwork.
Will I receive 50% of everything in a settlement?
One of the biggest myths in family law is the misconception that both parties involved in a divorce financial settlement will receive exactly half of any assets.
Courts try to be as fair and as balanced in their approach to the division of assets as possible, but as the circumstances of both parties can differ dramatically, its is very rare to see everything split straight down the middle.
There are a number of factors that allow a court to decide what is fair, including the relative needs of each party.
For example, if one person stayed home to raise children and the other was the main earner, the courts will also consider how child living arrangements will be split. Those with the greater degree of responsibility for the children may be awarded more to ensure their wellbeing.
Future earnings are also taken into consideration when reaching a financial settlement, with courts looking into the current and future earning potential of both parties if a spouse has sacrificed career progression to care for children.
With so many things to take into account when it comes to finalising a financial settlement, it is virtually impossible to create a one-size-fits-all formula for the division of assets. This can be complex and emotive, making it critical that you have the backup and support of an experienced divorce law specialist on side to ensure that you achieve a settlement that is both fair and represents the genuine needs of each party.
How do I make the settlement legally binding?
Once all assets and circumstances have been considered and a final decision has been made by the solicitors or the courts, a consent order must be drafted and presented to the court for approval.
Without this, the divorce financial settlement cannot be enforced by either party later on should any issues occur, so this final step must be taken in order to make the settlement legally binding.
If you are being represented by a family law solicitor, they will undertake this stage on your behalf to ensure that you are properly protected legally.