Are Personal Savings Classed as Assets In Divorce?
Financial settlements are essential in divorce. It outlines exactly what you plan to do with your assets, including savings following the divorce and provides a clean break ensuring neither couple can make future claims against one another’s future assets.
The section 25 martial clause act (1975) is the law, which provides the guidelines in regards to what is considered in a financial order.
Is my spouse entitled to half my savings?
All savings, including ISA’s, must be disclosed as part of the financial proceedings, even those that are held in one sole name.
More often than not the savings will have been built up within the marriage, classing them as a matrimonial asset.
Any matrimonial assets can be split fairly during a financial settlement.
How are savings divided in a divorce?
The way in which savings are divided during a financial settlement is different for each divorce, however; a fair split is always desired. In the majority of cases, a 50/50 split is often the starting point.
Fairness is the key to dividing assets including savings within a divorce, it’s important to understand fair doesn’t always mean equal.
Some factors that are taken into consideration are:
- Earning capability,
- Needs & age,
- Duration of the marriage
The general principle is that personal assets within the matrimonial pot should be divided equally upon divorce. To find out more visit: How Assets Are Split in a Divorce.
Are any savings exempt from a financial settlement?
There is only one exemption and this is if you are able to prove that the savings were built up before the marriage, classing it as a non-matrimonial asset.
Some examples are:
- Your savings were brought into the marriage
- You have built up the money in the savings since separating
- The savings were received during the marriage from an outside source (a gift or inheritance.)
However, although the above often means that your savings can be exempt from your financial agreement it doesn’t mean that they always are.
If your settlement is taken to court, the judge has the ability to include it if they feel it’s necessary.
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How to divide personal savings accounts
The process of Dividing saving accounts differ depending on the type of savings account you hold and who’s name is on it.
Savings accounts- dividing savings accounts is often rather straight forward and simply involves one party transferring the other a set amount in which has been decided upon.
However, some savings accounts can have clauses so it’s important to contact the bank before making any transaction.
Cash ISA’s- Cash Isa’s are only ever held in one person’s name, this means you are unable to transfer the money to the other party. You will have to withdraw the money and then give them the money personally.
Savings & Financial Consent Orders
Savings can be included within a financial consent order along with all other assets. A financial consent order simply means that your financial arrangements are written in a legally binding order sealed by the court.
Protecting both parties and enabling them to take legal action if either party fails to comply with the order.
We offer a range of solicitor drafted financial consent order services to suit your needs and budget. All saving you on over £750 compared to your local high street solicitor- without compromising on the service you receive.