Financial Issues on Divorce or Civil Partnership Dissolution
On divorce or same-sex civil partnership dissolution there are no rules in English law that prescribe a mathematical formula on how to divide assets or how much maintenance a spouse or civil partner has to pay to the other. The court has a discretion on what to do, but it is guided by a number of factors:
- It has to give first consideration to the welfare of any children under 18.
- It has to consider all the circumstances of the case.
- It has to look at whether a clean break without ongoing maintenance would be appropriate.
- The outcome should be fair and in a lot of cases this means equality.
The law sets out a list of items that the court needs to take into account as part of all the circumstances of the case. These are just examples and this is not a complete list:
This includes the income, earning capacity, property and other financial resources which each spouse or civil partner has or is likely to have in the foreseeable future including, in the case of earning capacity, any reasonable possible increase in it. So it is no good to say for someone that they have no income because they are not working if there is no reason why they should not do so.
Financial needs include obligations and responsibilities which each spouse or civil partner has or is likely to have in the foreseeable future.
Standards of Living
This means the standard of living enjoyed by the family before the breakdown of the marriage or civil partnership. So the budget for food, holidays and leisure activities in cases where maintenance is payable will vary depending on the standard of living previously enjoyed.
Ages of the Parties and Duration of the Marriage or Civil Partnership
The court takes into account the ages of each spouse or civil partner. Younger people are more able to build up their own career and pension provision than older people.
The duration of the marriage or civil partnership is also relevant. In most cases, if the marriage or civil partnership has been long, the court tends to look less on what the parties contributed or what the situation was at the day of the wedding or civil partnership registration and more towards an equal division of assets.
Since same-sex couples have only been able to register a civil partnership since 2005, but may have been living together for many years or decades before that, the courts take the entire period of cohabitation into account as they do for married couples where there has been a seamless transition from cohabitation to marriage. So the courts treat such cases as if the couple had been married or civil partners for the entire period.
Under this heading the court considers any physical or mental disability of each spouse or civil partner. to top of text
The court will consider such contribution which each spouse or civil partner has made or is likely to make in the foreseeable future to the welfare of the family, including any contribution by looking after the home or caring for the family. This interrelates with the duration of the marriage or civil partnership. For example the court will not put much weight on who paid the deposit to the house of £5,000 in 1985 after 30 years of marriage when the couple brought up two children, went through career development and a change of jobs. By contrast assets acquired post-separation may be treated differently to those accumulated during the marriage.
This can only be taken into account if “it would in the opinion of the court be inequitable to disregard.” It is rare that a court puts great weight on this unless it is gross and obvious misconduct, mostly of a financial nature, such as siphoning off of funds on a large scale, or financial deception, especially in the course of the financial negotiation and proceedings in connection with the divorce or civil partnership dissolution. Even then this is a difficult argument to run. An “affair” is not conduct. to top of text
The court will consider each party’s pensions as well as survivors’ pensions which are lost on divorce or the dissolution of a civil partnership.
There is no provision in English law that pre-nuptial or other agreements made between the spouses are binding (or pre-registration agreements for civil partners), but they can be very persuasive to the court. However, the parties’ needs would usually be taken into account first and have to be met.
Both spouses or civil partners must provide full disclosure of their financial position so that a proper financial arrangement can be made.
Both spouses or civil partners should obtain independent advice from a specialist English family solicitor to ensure that they know where the court order may lie in their case. Even if the parties are dealing with matters in mediation or have reached an agreement, they should discuss this with a family lawyer to ensure that there are no pitfalls, such as that one party takes on a tax liability that will only become apparent at a later stage.
Even if an agreement is reached, it is vital to get the court to approve the agreement in the form of a consent order so that there can be no come-back if one party changes their mind or circumstances change.. .
20 May 2016 by Andrea Woelke