Divorce Financial Settlement

When deciding how assets should be shared, it is important to identify which assets are ‘matrimonial property’. As a general rule, matrimonial property includes all the assets that a married couple have acquired during the course of their marriage and that they still have at the date of separation. However, any asset that one of them has acquired during the marriage either as a gift or by inheritance will not be treated as matrimonial property. 

If the family home or its furniture was acquired before the marriage to be used as a family home or furniture then that will be treated as matrimonial property and subject to division on divorce. 

When deciding upon how the property assets should be divided, the key factor to bear in mind is what is fair and reasonable in the particular circumstances of the separating couple. This fair and reasonable test is what a court would have to apply.  Generally it means that the accumulated assets will be divided up equally between the couple, but of course every separating couple’s circumstances are different.

Although generally assets will be divided equally, there can be special circumstances which can justify division in different proportions. Indeed, the court could award all of the assets to one spouse and none to the other.

The special circumstances to justify an unequal division of the assets have to exist at the date the couple separate. Factors that can allow for an unequal division of assets include:

• Source of funds – if the money used to acquire property did not come from the couple’s income or efforts during the course of the marriage 
• Destruction of assets – if one spouse has given away matrimonial assets in an attempt to dissipate assets, or has squandered assets by gambling or some other inappropriate lifestyle choice
• Nature and use of property – for example this could refer to the matrimonial home, as it may be more desirable that one of the parties continues to live in it with the children of the marriage
• Funds from a damages claim – if received by one of the couple during the marriage and personal to them, such as funds granted for pain and suffering or loss of future earnings

Every couple’s circumstances are different and there can be a number of different reasons why unequal division of assets could be justified. However, these do not include non-financial conduct, so for example the fact that one of the couple has had an affair is not grounds to depart from an equal sharing.

Any assets you had before you were married do not constitute matrimonial property and so are not subject to division.  For example if you owned a car before you were married and you still have it at the date of separation, it is not taken to form part of the assets that should be divided on separation. Likewise, if you had £5,000 in a savings account before you were married and have not added to it or taken anything out of it at the date of separation, that £5,000 would be taken to be yours and not part of the matrimonial pot. 

However, if you used some of your pre-marriage savings to buy a jointly owned matrimonial home, then the position can become more difficult. If the marriage was very short, then there may be a special circumstance to depart from the usual equal sharing of the assets, but with a longer marriage there is much less justification for that. See our section on Savings and Assets for more detail on savings on separation.

There can be reasons to depart from the usual equal sharing of financial assets if one of the separating couple is to face the economic burden of caring for a child or children of the marriage under the age of 16 years. This can take account of the fact that the spouse who has care of the children may have to pay childcare while working and may have to buy a bigger and more expensive house to accommodate the children.

The court will take into account the level of maintenance (legally known as ‘aliment’) paid by the parent who does not have the care of the children. An argument for an unequal division of assets favourable to the parent with care of the children is more likely to be successful if the children are very young and the non-resident parent is not providing generous child maintenance. 

The reason for divorce is not taken into account by the court when determining how to divide a couple’s assets.  However, if one of the parties has squandered assets during the marriage, for example, by drinking excessively, by gambling or by frivolously giving away assets, then that can be taken account of as a special circumstance to depart from the usual rule of equal sharing.