Divorce and splitting assets

How are assets divided in a divorce? 

There is no fixed formula for working out a division of assets in a divorce. The English court has a wide discretion to decide on what it thinks is a fair financial outcome, having regard to all the circumstances of the couple.  

The court's first priority will be to ensure that any children have their financial needs met. Beyond that, the court's starting point is that all assets generated during the relationship (which will usually include any period of cohabitation prior to marriage where a relationship has moved 'seamlessly' from cohabitation to marriage) should be shared equally unless there is a good reason to depart from equal sharing.

Reasons to depart from equal sharing might include:

• Non-matrimonial property.  Matrimonial property is built up during the marriage through the active work of one or both spouses, whereas non-matrimonial property comes from a source which is external to the marriage (for example, one spouse might have already owned it when the spouses began their relationship, or one spouse might have inherited it during the marriage and kept it separate from matrimonial property). Non-matrimonial property will usually not be shared equally but will instead be kept by the spouse who owned it throughout the marriage, but one reason why it might be divided is if it is required to meet 'needs' – see below.
• A pre- or post-nuptial agreement which specifies that certain assets are not to be shared (see are pre-nups legally binding?).
• Needs. The court ensures that, wherever possible, each spouse has their financial needs  met. Quantification of those needs is influenced by (though not determined by) the standard of living during the marriage and the financial resources available. If the standard of living during the marriage was high, needs will be assessed more generously and it is possible to include in the assessment all manner of things that the spouses are used to (for example, additional properties, staff, holidays and leisure, designer clothes etc.).

When dividing assets in a divorce, the court will try to achieve a 'clean break' between the spouses if it is affordable and fair, i.e. it will not wish to see spouses continue to co-own assets following their divorce, and it will consider capitalising any spousal maintenance (i.e. ordering the payment of a lump sum instead of ongoing payments out of income).