The answer to the question “what am I entitled to in a divorce settlement?” will vary depending on the exact nature of your case and the assets and circumstances involved.
The starting point will normally be a 50/50 split. However, it is important to understand that this is very much only a starting point. From there, a variety of things will be considered. How long have you been married? Are children involved? What is each party’s immediate financial needs? What is each party’s ability to generate income in in the future?
In this blog, we will look at the different aspects that you will encounter whilst reaching a divorce settlement and hopefully give you an initial steer on what you might be entitled to in a divorce settlement.
What is a financial settlement?
‘Financial settlement’ may be a phrase you are unfamiliar with so it may be best to start by providing some explanation.
In a divorce the financial settlement is an agreement between the parties as to how they will split all the relevant assets. These assets will likely include property, savings, investments, pensions, inheritances, businesses, fine art, antiques and jewellery.
For the purposes of divorce, assets are usually referred to as either ‘marital’ or ‘pre-marital’ assets.
Marital Assets cover what has been acquired during the marriage (including pension funds either party has paid into during the marriage). In England and Wales, these belong legally to both spouses.
Pre-Marital Assets are any assets either party acquired before the marriage. These are treated differently. This doesn’t mean they are discounted from the financial settlement, it means how they are treated is usually more complex. The division of pre-marital assets will also be impacted if there is a pre- or post-nuptial agreement is in place.
In addition, if children are involved, the agreement will also set out the details of child maintenance payments going forward.
While couples can reach a financial agreement between them, you need to remember any settlement has to be made legally binding by obtaining a consent order from the court so that it protects both parties’ positions both now and in the future.
What will I be entitled to in the financial settlement?
Again, there is no set answer. However, parties must seek an agreement that is ‘fair’ to both of them. ‘Fair’ does not mean a straightforward 50/50 split. ‘Fair’ is more about finding a way to make sure both parties remain in an equal position after the settlement is awarded so they can achieve financial independence as quickly as possible.
Section 25 of the Matrimonial Causes Act 1973 and the Civil Partnerships Act 2004 provide a better guide as to which factors the courts will take into account to find the fairest division of assets. These include:
- The welfare of any children involved (this is likely to have a bearing on who will get to keep the marital home)
- The financial needs, obligations and responsibilities each party has now/is likely to have in the future
- Each party’s current income
- Each party’s ability to earn in the future
- The standard of living both parties enjoyed before the marriage breakdown
- The financial commitments of each party
- Any physical or mental disability either party has
- Contributions made to the welfare of the family, including looking after the home or caring for the family
Again, the final financial outcome will be driven by the factors listed above and the court’s decision as to what represents to be ‘fair’ for each party. The process will also be much more productive if you ensure your lawyer has a complete and genuine picture as to your financial needs and financial priorities.
If you would like a estimate as to what you should expect in terms of a divorce settlement, you can take a look at Moneyhelper.org.uk’s divorce settlement calculator. It will make assumptions based on the information you enter but we would stress these are only assumptions and, therefore, should under no circumstances be relied upon.