Dividing Assets on Divorce

Going through the divorce process can be emotionally charged and stressful, particularly when dividing assets. There are key factors that influence asset division that you should be aware of when going through the process, such as marital versus separate property and how things like retirement accounts, businesses, and debts come into play.

This article aims to take you through the different assets considered during a divorce, clarify the key influences on how assets are divided and how our experts can help.

There are several categories of assets that will need to be divided during the divorce process:

• Property – this includes what happens to the family home and any other jointly owned property (holiday homes, rental properties or land) and how any outstanding mortgages will be dealt with. It is also necessary to disclose any solely owned property and details surrounding the circumstances of the acquisition.
• Bank Accounts and Savings – this predominantly includes the division of money held in any joint accounts. However, individual bank accounts, savings accounts and ISAs are taken into consideration and must be disclosed. Depending on whether or not funds were accumulated during the marriage they maybe included within the financial settlement.
• Investments – any investments -held will also need to be disclosed  (including stocks or bonds), -and can be subject to division
• Pensions and Retirement – all personal retirement savings, including private and workplace pensions are taken into account and may be divided, depending on how and when they were funded. State pensions are a bit more complicated. When dealing with pensions they can either be shared (split between both parties – not necessarily equally), earmarked (a percentage of one spouse’s pension is paid to the other spouse), or offset (one spouse keeps the pension and the other takes a larger share of other assets).
• Vehicles – this includes cars, motorcycles and other vehicles which are typically divided by one spouse keeping ownership or sold and the proceeds are split (this may vary depending on any debts on the vehicle if it has been leased or financed).
• Personal Property – put simply, any assets such as furniture, electronics, household goods, jewellery and collectibles are often divided between each party. However, any items that may be of sentimental value can be contested but how these are dealt with is on a case-by-case basis.
• Debts – joint debts are typically divided between spouses based on each ability to pay them. However, individual debts remain the responsibility of that party.
• Business – if any shares are held in a business, they will likely be divided between the spouses. If one spouse keeps the shares, compensation may be negotiated for the other party to the equivalent value. If on the other hand, one spouse owns a business, its value may be divided and the remaining party awarded other assets to the equivalent value.
• Inheritance and Gifts – inherited assets and gifts are generally considered as non-marital assets. However, if anything received has been merged with marital assets or were intended for both spouses, then they will usually be shared – if possible.
• Insurance Policies – generally, any insurance policies outside of life insurance, are divided with each party securing their own individual cover. Although, the cash value of any life insurance policies taken out during the marriage may be divided.

When deciding the division of assets, the courts will take into account a number of factors that can vary depending on the couple’s circumstances. However, it is always the courts’ aim to try and ensure fairness and equitable distribution when determining how assets will be divided, taking into account that needs trump all.

Children – any impact on children that may be caused by the division of the assets will be taken into account, particularly regarding housing and stability.

Length of marriage – generally, longer marriages often have a more equal division of assets on divorce, whereas with shorter marriages the general aim is to keep assets divided as they were before marriage.

Financial needs – in every circumstance, the current and future financial needs of each party will be looked at.

Contributions – Similarly to financial and physical assets, contributions to the home (both financial and non-financial) are taken into consideration.

Standard of living – the courts will aim to keep the standard of living of each party the same or as close to the standard during the marriage.

If you are looking to start divorce proceedings, our team of Family Law experts are here to help. If you have any questions about divorce, the process or your assets, speak to one of our friendly team members to book your free 30-minute consultation.

Tel:          01245 893400
Email:     info@backhouse-solicitors.co.uk
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