Regulation  

How the courts will apportion assets of a divorcing couple

  • Describe some of the challenges the courts face when dividing up assets of divorcing couples
  • Explain some of the problems around maintenance payments from income
  • Describe how the courts resolve these problems
CPD
Approx.30min

When considering the parties' future income needs, their standard of living during the marriage will be a factor the court takes into account and will have more weight after a long marriage.

Whilst the court expects a divorcing wife to maximise her earning capacity, in many cases this will not enable the wife to earn sufficient income to meet her needs.

Reasons for this could include that she will remain the primary carer for young children, that she is approaching retirement age, or that choices made during the marriage mean she lacks the skills and experience to develop a significant earning capacity.

The reality is that after a long marriage with a comfortable standard of living, many wives will be unable to meet their future income needs from earned income.

If the husband's financial position permits, the court can order that he pay maintenance amounting to the shortfall between the wife's income and her needs. 

If the wife has surplus capital, beyond that which is needed for housing, then any income it produces should be put towards meeting her needs.

Using capital for income

A more difficult question is whether the wife should be expected to exhaust the capital to meet her income needs over her lifetime, that is, to "amortise" it, or whether she should be entitled to preserve her capital and receive maintenance from her husband. 

Lord Justice Moylan in Waggott phrased the question as: "to what extent is it fair for the wife to be required to use her sharing award to meet her income needs when the husband will meet his needs from earned income?".

Judges have taken different approaches to this question.

Most have suggested flexibility is key, but a recent decision suggests a stricter approach. 

In a Court of Appeal case decided shortly after White, Lambert v Lambert [2002] EWCA Civ 1685, it was indicated that it would be unfair to require the wife to spend her capital on meeting her income needs where the husband would not be doing so.

Lord Justice Thorpe said he could see "no possible reason" why only the wife should have to spend her capital on costs of living, and Mr Justice Bodey expressed the view that for the wife to have to spend her capital on living costs, when the husband would not have to, did not seem fair after a long marriage. 

Several years later, in Vaughan v Vaughan [2010] EWCA Civ 349, the court of Appeal set out a flexible approach.