It’s not fair: financial settlements when you divorce
As family lawyers, people often remark to us that they were “taken to the cleaners” when they got divorced. We are always intrigued by what this means. All financial settlement orders are made by a judge, following a court hearing, or by agreement between the parties which then needs to be checked for fairness and approved by the court.
The court is never a rubber stamp, and if a proposal is considered unfair, a judge will refuse to approve it.
What is at stake is each judge’s view of fairness versus each party’s sense of this word. The Court of Appeal famously said that fairness is much like beauty: it’s in the eye of the beholder.
You will always want a court order: it's binding, can be enforced and provides a high degree of certainty as to what should happen in the future. A court order enables the parties to move on knowing what the obligations are and what each will receive by way of settlement.
How does the court approach division of assets on divorce?
What does fairness mean in practice? First, it means allocating the assets of the parties in a way that meets their needs, regardless of whether the assets were marital or not. Second, unless there is good reason, the leading case of White v White established that the marital assets should, in most cases, be shared equally. The objective is to avoid any discrimination between the roles each party played during the marriage.
Simple? Not really, as in practice the law enables a wide range of factors to be considered, set out in section 25 of the Matrimonial Causes Act 1973, and each case is therefore judged on its own facts. These factors include the income, earning capacity and financial needs of each party, the standard of living enjoyed during the marriage, the length of the marriage and the age of each party, and any physical or mental disability. Generally, however, the needs of children aged under 18 will take priority, and the party in the weaker position will likely receive a greater share; they have less, so they need more.
What happens in practice
Most cases turn on managing where each party will live, how much they will have to live on and their pension claims. If there is a surplus after that, it should be shared equally.
Our sense of being “taken to the cleaners” is the difference between individual expectations and how the law considers a claim should be settled. Sometimes tough decisions must be taken, and it is often the case that in the short term each party must lower their sights and take a realistic view.
Get support for your relationship breakdown
A court rarely takes the behaviour of people into account, and the reasons the marriage came to an end will be significant to you, but not to a judge. If you would like to understand more about the limited circumstances in which conduct can be relevant, our colleague Navida Ullah has written in more detail on conduct in divorce. Forewarned is forearmed, so rather than rely on the friend who was taken to the cleaners, better to get advice at an early stage to enable you to evaluate your options.
If you wish to discuss this with one of the team, please get in touch.
Frequently Asked Questions about Division of Assets on Divorce
What does "division of assets on divorce" actually mean?
It refers to how the court, or the parties by agreement, allocate the matrimonial assets between a divorcing couple, guided by fairness rather than a fixed formula. In most cases, this means meeting both parties' needs first, then, where there's a surplus, sharing what remains equally.
Does everything get split 50:50 in a divorce?
Not automatically. Following White v White, equal sharing is the starting point for marital assets once both parties' needs have been met, but the court may depart from this where there is good reason, such as significant non-matrimonial property or unequal needs.
What factors does the court consider when dividing assets?
The court considers the section 25 factors set out in the Matrimonial Causes Act 1973, which include each party's income and earning capacity, financial needs, the standard of living during the marriage, and the length of the marriage. The needs of any children under 18 are generally treated as the first consideration.
Does bad behaviour during the marriage affect how assets are divided?
In most cases, no. The court rarely takes conduct into account, and the reasons a marriage ended are unlikely to influence how assets are divided unless the behaviour meets a very high legal threshold.
