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What Am I Entitled To In a Divorce Settlement?

There are no specific guaranteed entitlements for either spouse when it comes to getting divorced.

Each marriage is unique and the circumstances must, therefore, be assessed individually in terms of reaching an appropriate divorce settlement.

However, if things do end up in court, there are certain factors which will be taken into account, which we will explore below.

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How are money and financial assets split in a divorce?

Before looking at how money & assets may be split in a divorce settlement, you need to know the difference between assets.

Matrimonial assets

Assets that you have built up or acquired during the period of marriage are known as matrimonial assets or marital assets.

These typically include property, pensions, savings, personal belongings and cash in the bank.

Non-matrimonial assets

Non-marital assets are financial assets that were acquired before entering into the marriage, for example, property, pensions, businesses, etc.

These assets are usually treated differently to marital assets, however, they aren’t necessarily excluded from a divorce settlement.

For example, if an inheritance has been used during the marriage to purchase a car or house, this asset would now be classed as a marital asset.

How does the court make a decision?

Although there are no hard and fast rules about how to divide assets following a divorce, there are a couple of overriding principles that the court will examine;

1. Equal split

There is an assumption of a 50/50 split as the starting point in any divorce, which means the ‘matrimonial pot’ (all the assets built up over the course of the marriage) should be divided equally upon divorce.

This is in line with the case of White v. White, in which the judge ruled that: “As a general guide, equality should be departed from only if, and to the extent that, there is a good reason for doing so.”

2. Fairness

An equal split of the matrimonial property may not always be deemed ‘fair’ but what is considered fair will differ from case to case.

A judge in the case of White v. White described this tricky analysis of fairness: “Features which are important when assessing fairness differ in each case. And, sometimes, different minds can reach different conclusions on what fairness requires. Then fairness, like beauty, lies in the eye of the beholder.

Are matrimonial assets split 50/50 in a divorce?

This question is the most common misconception about financial settlements and divorce.

There is no rule or law that says money and assets should be divided 50:50, however, it’s often the starting point for many couples.

Subject to the principles of fairness and equal split, the court will then look at various factors set out in section 25 of the Matrimonial Causes Act 1973.

A number of factors are taken into account by the court when making a decision, including:

  • The welfare of any children under the age of 18 (this should be the primary consideration amongst these factors).
  • The income, earning capacity, property and other financial resources which each of the parties to the marriage has or is likely to have in the foreseeable future.
  • The financial needs, obligations and responsibilities which each of the parties to the marriage has or is likely to have in the foreseeable future.
  • The standard of living enjoyed by the family before the breakdown of the marriage.
  • The age of each party to the marriage and the duration of the marriage.
  • Any physical or mental disability of either of the parties to the marriage.
  • The contributions which each of the parties has made or is likely in the foreseeable future to make to the welfare of the family, including any contribution by looking after the home or caring for the family.
  • The conduct of each of the parties. If that conduct is such that it would in the opinion of the court be inequitable to disregard it.

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Is my ex-husband or wife entitled to half my house?

We hear this often too. A family home is often the most valuable asset within a marriage, followed by pensions in most cases.

So, it’s not surprising that people have a lot of questions regarding the division of their house.

How does a house get divided within a divorce settlement? There are many different ways property can be separated, including:

  1. Sell & Share – This is where both parties move out of the home and split the money to buy a new property (if sufficient).
  2. Buying Out – This involves one spouse buying the other out of the property and becoming a sole owner.
  3. Transfer of Value – This involves one party transferring some of the value of the property to the other person. The spouse leaving the home would not own any of the property but would keep a stake in the home value. If the house gets sold they would then receive a cut.
  4. Unchanged Ownership – One party will continue to live in the house, but the ownership of the property remained unchanged.

What are my rights as a spouse in a divorce?

There are generally no automatic rights to matrimonial assets. But, as discussed above, when considering a financial settlement, the position will normally start from a 50:50 split of assets and the court will apply the principle of fairness.

Above all, it will try and ensure that the welfare of any young children is protected.

Matrimonial home rights

Before a divorce has concluded, spouses have ‘home rights’ in a matrimonial home.

This essentially means that, if the house in which both husband and wife lived is owned by one party, the other party has a right to live in the property until the divorce, annulment or dissolution has been finalised and a court settlement agreed. 

How does the court decide what is a fair divorce settlement?

In summary, on divorce, the aim is to divide the assets fairly. Fairness does not necessarily mean an equal division.

The Court is under a duty to consider all the circumstances of the case and in particular the Section 25 Factors and apply these to the particular case.

Having considered the Section 25 Factors, the Court may order an unequal division of the assets but this very much depends on the particular facts of the case.

The general rule is that assets should be divided equally unless there is a good reason not to.

The first consideration must always be given to the needs of the dependent children. Practically this means accommodation must be provided for the children and the custodial parent.

This could mean one party may retain the marital home to house the children until they reach a certain age.

Generally, the Court will always look to meet the needs of each party.

If no agreement can be reached between the parties by way of a consent order then the Court may go on to consider dividing the remaining assets taking into account how they were created.

This requires dividing the assets into matrimonial and non-matrimonial. The matrimonial property comprises those assets that have been acquired during the marriage and non-matrimonial assets are those assets that have accrued outside the marriage (i.e. assets brought into the marriage by either party at the outset, or Inheritance or gifts.)

Once the needs of each party have been met, then anything over may be divided further.

This post was written by Mark Keenan. Editor of Divorce-Online and Managing Director of Online Legal Services Ltd. Mark has been writing about divorce and related subjects for over 20+ years and is an expert in legal marketing.

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