Who gets what?
When going through a divorce, rational discussion about division of assets can be extremely difficult. If the divorcing couple cannot decide between themselves how best to split their assets, their solicitors can guide them through a mediation process. Of course, if that ultimately is not helpful, the courts are there to step in as final arbitrator and may take the decision away from them.
What will a court consider if it comes to a fight?
The courts will look to make what is called “proper provision” for the parties involved. The big picture aim is fairness and justice and the court will consider a list of criteria, such as :
- the income, earning capacity, property and other financial resources each spouse has or is likely to have in the foreseeable future
- the financial needs, obligations and responsibilities each spouse had or is likely to have in the foreseeable future (a remarriage of one or both of the spouses might be considered here)
- the standard of living enjoyed by the family before the proceedings began or before the spouses separated
- the age of the spouses and the length of time which they lived together
- the physical or mental disability of either of the spouses
- the contributions which each of the spouses has or is likely in the foreseeable future (either directly or indirectly) to make to the welfare of the family, including any contribution made by them to the income, earning capacity, property and financial resources of the other spouse and any contribution made by either of them by looking after the home or caring for the family
- any income or benefits to which either spouse is entitled by or under statute
- the conduct of each of the spouses if it would be unjust to disregard it
- the accommodation needs of either of the spouses
- the rights of any other person other than the spouses but including a person to whom either spouse is married
What if we have a prior agreement?
The courts support the idea of couples making agreements between themselves and will give any such agreement significant weight if either of the parties later wish to re-visit the matter.
This is particularly relevant if it is a recent agreement and if the couple had specified that it should be final.
In the case of such a seemingly ‘final’ agreement between the couple themselves, the court will only alter it if it does not “properly provide” for one party or if the circumstances have changed dramatically since it was entered into.
However, it should be noted that the courts have indicated that any windfall or wealth which one party gets after the couple’s relationship has formally ended or, very importantly, assets which were inherited by one party should not automatically be open to a claim by the other unless they were involved directly in obtaining them.
These windfalls may however be considered relevant to “proper provisions” criteria is cases where there are insufficient other assets to cater for the parties’ needs.
Can you have a clean break?
There is a general principle of law that supports any effort to arrive at finality or closure whenever possible. If there are ample resources to provide for each party (and any dependents) then this is particularly true.
However, there is no explicit provision for a “clean break” in legislation and there are some limited cases where any division of assets may be re-visited and changed. This situation came before the High Court on two occasions recently and the courts have taken the view that unless the change that has occurred makes the previous terms impossible to comply with they will be very reluctant to alter what was intended to be the final settlement.
Any chance of a second bite of the cherry?
In a recent case, the Supreme Court held that substantial weight should be given to a separation agreement, especially when it was concluded some time ago and there was no dramatic change in circumstances of the parties. In this particular case, the court was prepared to accept that a deterioration in health was a change in circumstance and also that a significant decrease in the value of a person’s assets would also be a change in circumstances. However the Court overriding consideration was not allow a reopening of an agreed settlement between the parties and of not treating family law cases as an opportunity to re-distribute wealth simpliciter.
The Court also said that inherited assets should not be seen as assets obtained by both parties in a marriage.
Click here for further details of the case