Divorce Financial Settlements.

The divorce financial settlement is an agreement that aims to fairly divide the financial assets during or after divorce. A divorce settlement will require both parties to disclose all their marital assets and then dictate how they are split.

What assets are considered marital assets?
Marital assets are assets that have been purchased or gained during marriage. Some examples of marital assets are:

• Properties
• Debts (including mortgages)
• Stocks, bonds, mutual funds and other investments or financial products
• Businesses
• Pensions
• Overseas property and investments
• Cash and savings in the bank
• Vehicles
• Furniture and appliances

Assets that you acquired prior to marriage may or may not be considered marital ssets, depending on your individual circumstances.

Yes, you can. You can also agree to split your finances informally without court intervention, but going down either of these routes means you risk your partner claiming for finances at a later date.

The most common example of this is with the family home where many couples will informally agree to split it 50/50. However, when one person’s financial situation changes, or their outgoings increase, they may re-think this and this is where arguments begin. They are fully entitled to do so as there is no formal arrangement.

Formal financial arrangements agree a full and final split that can only be varied further down the line through the court. However, the likelihood of success of this variation is slim.

Not normally. The court doesn’t look at who did what to whom. It only seeks to divide finances on a needs basis.

The only exception where the court will modify the divorce financial settlement is if there is domestic violence involved that has affected the victim’s long-term ability to work.

When it comes to the divorce financial settlement, the court will assess each side’s requiredments on a needs basis starting from a 50/50 split. What each side needs can be vastly different from what they want.

Two examples of when the court may weigh the division of assets in favour of one party include:

Example 1 – Future earnings. This point analyses whether one part sacrificed career progression for the marriage, for example, to look after any children. In this instance, the court will likely compensate for this sacrifice in the financial settlement as the party has less capacity to earn in the future.

Example 2 – Child custody. The parent who is awarded custody of any children will likely receive a higher financial share of assets to protect the children’s wellbeing.

Example 3 – Extreme domestic violence. As highlighted above, if there have been extreme domestic violence cases that caused a lasting injury to one party and, therefore, impacted that parties ability to earn in the future. In this instance, the court may weigh the assets in the victim’s favour to compensate for their future earning loss.

If you have questions regarding the division of the marital assets, please don’t hesitate to contact our solicitors on 020 3007 5500.

One of the main assets to come into question during a financial settlement is the marital home. The marital home can be dealt with in many ways, including:

• Selling the property and splitting the money.
• One person buying the other out of their share, commonly referred to as the transfer of equity.
• Deferring the sale of the property through a mesher order. A mesher order commonly dictates the sale of the marital home in the future, after a certain amount of time or at a specific event. An example of a specific event can be when the youngest child reaches the age of 18.
• Leaving the ownership untouched. In this circumstance, one partner will remain living in the house, and the property ownership remains shared.
• Partial transfer. In this instance, one person transfers part of their share into the other party’s name. This reduces the departing party’s percentage ownership of the property.

How the marital home is split will depend entirely on you and your partner’s current circumstances.

Prenuptial agreements aren’t legally binding but they can hold legal weight. This means your prenup may not be followed to the letter, but in the event either side wants to depart from what was agreed, a judge may ask why.

Only in circumstances where the prenuptial agreement has been correctly drafted, regularly reviewed, and is deemed fair to both parties will the agreement hold any legal weight in court.

For more information on your prenuptial agreement’s legal weight, please visit our article on ‘What is a prenup and how do they work?‘.

We are currently unable to offer legal aid in any capacity as we lack the necessary legal aid certificate. We also don’t offer pro bono divorce financial settlement work at present.