Financial considerations in divorce - who gets what?
Craig Richardson, Associate Solicitor in the Family team at Berry & Lamberts Solicitors, answers questions on financial considerations in divorce.
According to the Law Commission, the current law does not “provide a cohesive framework in which parties to a divorce or dissolution can expect fair and sufficiently certain outcomes.” The reason for this is the wide-ranging discretion contained in the current law, which allows judges significant scope for interpreting the statutes.
What are the current provisions for financial settlements in divorce?
Financial settlements in divorce are based on the principle that there should be a fair division. Whilst the provisions indicate that they should be fair, that does not mean there must be a 50/50 split.
Currently, the court must consider:
- Each party’s income, earning capacity, property and other financial resources. The judge will consider each party’s resources now and for the foreseeable future.
- The financial needs, obligations and responsibilities of each party.
- The standard of living the family enjoyed during the marriage.
- The parties’ ages and how long they were married.
- Whether either party had a physical or mental disability.
- What contribution each party has made or is likely to make to the family’s welfare in the foreseeable future.
- How each party has conducted themselves. This applies if the conduct is such that, in the court’s opinion, it would be inequitable to ignore it.
- The value of each party to any benefit they will lose due to the divorce.
Craig Richardson
Are there further provisions in relation to children?
The court must consider the financial needs of children, not only those shared by the parties but also those who are not children of one of the parties.
In respect of children shared by the parties:
- The financial needs of the child.
- The child’s financial resources, including any income, earning capacity and property.
- If the child has a physical or mental disability.
- The child’s education: current and expected education requirements.
In respect of children who are not children of one of the parties:
- Whether the party who is not the natural parent assumed any responsibility, the basis on which that was done and what, if anything, they contributed to the child’s maintenance and how that contribution went on, and
- Whether they did that in the knowledge the child was not their own, and
- •he liability of any other person to maintain that child.
When the court weighs these wide-ranging provisions, it might conclude that an unequal split of assets on divorce should favour one of the parties.
The Civil Partnership Act 2004 contains provisions that mirror those in the Matrimonial Causes Act 1973 and apply to the dissolution of a civil partnership.
Are there plans to reform the current law?
The Law Commission has conducted a detailed review of the law. It has concluded that “it is not possible for an individual going through a divorce to understand, by reading statute, how their case will be decided.” In other words, the Law Commission believes this area of law badly needs remediation and consolidation.
In December 2024, the Law Commission published a Scoping Report which discusses possible models for reforming the law. The Commission believes it is essential to introduce a degree of certainty into divorce proceedings regarding financial matters. We will continue to update our clients with any legal developments in this area.