How are assets split on divorce?

The parties will have to obtain a final financial order from the court, and the court will only approve the agreement reached without further enquiry if it is within the realms of what the court itself would order. 

Clients need to know how much leverage they have in negotiations and make cost-proportionate decisions about when to settle. 

Clients also need to know that the court has a discretion, so there is no guaranteed outcome. Therefore, family lawyers advise on a bracket of orders that the court could make. 

The court will first carry out a computation of the assets and then decide how those assets should be divided. Each party must disclose their financial status to the other.

This case established that there would not be a distinction between the breadwinner and the homemaker.  

The statute that guides the court when deciding the division of finances is the Matrimonial Causes Act 1973, which states that first consideration must be given to the welfare of any minor child of the family.

The court will then look at the following factors set out in section 25 of the act for each party:

• Their current and likely foreseeable future income, earning capacity, property and other financial resources, including any increase to earning capacity that could be reasonably expected.
• Their current and likely foreseeable future financial needs, obligations and responsibilities.
• The standard of living enjoyed by the family during the marriage.
• The age of each party and the duration of the marriage.
• Any physical or mental disability.
• The contribution each party has made or is likely in the foreseeable future to make, including by looking after the home/caring for the family.
• Their conduct, if that conduct is such that it would in the opinion of the court be inequitable to disregard it.
• The value of any benefit which by reason of the dissolution or annulment of the marriage that party will lose the chance of acquiring.

The weight given to each of these factors will depend on the facts and circumstances of each case, for example:

1. Section 25(a): in relation to earning capacity, if the breadwinner during the marriage now says that he/she does not want to work after the divorce, meaning they cannot pay spousal maintenance to their former spouse who needs it, then the court will likely attribute the breadwinning party with an earning capacity.