Dividing property on divorce
The family home should be a place of security, a major investment in emotional as well as financial terms. Where a married couple split up, however, the family home can become the subject of uncertainty and anger. How do you divide this major asset when two people decide to divorce? How is the home valued by a court, and how is it divided? It is often thought that property will be split 50-50 between the couple. This, however, will not always, or even usually, be the case. It is impossible to say exactly how property will be divided, because the circumstances will be different for each divorcing couple. It is always advisable to seek independent legal advice, to make sure you are fully informed of your rights and responsibilities before you come to an agreement. In the emotional turmoil of a divorce, it can be hard to think logically about the best solution, but seeking independent legal advice should help to make sure neither party is short-changed in the divorce.
Asking a court to arrange the division of your property is an expensive option. It may be better, if both people agree, for the couple to use mediation or collaborative (non-confrontational) law processes to decide on the division of property.
What happens on divorce?
The settling of a couple’s financial matters on divorce (or dissolution of a civil partnership) is called ‘ancillary relief’. This could cover cash payments, transfer of property and other assets, ongoing maintenance and pension sharing.
The court has wide powers to decide how the assets will be apportioned, and will take many things into consideration. Where there are children, the welfare of the children will be given priority.
In deciding what will happen to the family home, the courts will take several factors into consideration. The following are options that couple can consider, whether they have gone to court, or sought the help of a mediator or other adviser.
The needs of the children are of paramount consideration, and a suitable home should be maintained for them.
The couple may be in a position to sell the home and divide the proceeds in order for both parties to find new homes. If this is the situation, then the proceeds may not necessarily be split equally.
The home could be transferred into the name of one person, with the other receiving a greater share of other assets.
One person could stay in the house, while the other keeps a financial share in it.
Relevant factors to consider
The Matrimonial Causes Act 1973 and Civil Partnership Act 2004 are the main pieces of legislation on the division of property on divorce or dissolution of a civil partnership. They set out a list of factors that will be considered by a court when couples divorce.
These are:
- the welfare of any children;
- the income, earning capacity, property and resources of each person;
- the financial needs, obligations and responsibilities of each person;
- the standard of living enjoyed by the family before the marriage broke down;
- the age of each person and the duration of the marriage;
- any physical or mental disability;
- the contribution made by each person to the welfare of the family, including looking after the home and bringing up children; and
- the conduct of each person, but only if it is so bad it would be unfair to ignore it (this is a consideration only in exceptional cases).
There are also pre-nuptial and post-nuptial agreements to take into consideration (these are the subject of a separate article). Pre-nuptial agreements are not legally binding, but post-nuptial agreements are, as long as they have been properly constituted. However, the court will always have discretion to alter them where, for example, the welfare of the children would be jeopardised.
Scotland
Scotland has a separate legal system from the rest of the UK, and a very different history of laws relating to the family. Couples who divorce in Scotland can, however, expect as fair a result regarding the division of property as their counterparts south of the border or in Northern Ireland.
In Scotland, a couple must have achieved a ‘fair and equitable’ split of the matrimonial assets before a court will grant them a divorce. Generally, couple are encouraged to make a clean break, where possible, so that they are no longer financially reliant on each other. Parents will still have to provide financial support for their children. Generally, property is split equally, but the court can order as it deems fit.
