Financial Settlement in a Divorce: How Assets are Split

Divorce or separation is never a pleasant process to go through, even though it may be a last resort. Dividing the assets and who gets the kids when is a messy and unfortunate by-product of the world that we live in today. A divorce financial settlement may be the last thing on your mind, but it is something that needs to be dealt with sooner rather than later. 

What is a Financial Settlement in a Divorce?

The financial settlement portion of divorce proceedings is the point at which decisions are made about the dividing of the assets, including other financial agreements and ongoing financial support, of the individuals involved. Financial settlement is something that can be agreed upon without the intervention of the courts.

In many of these cases, a settlement is not possible, and the next best option is to go into mediation, allowing the courts to decide the appropriate resolution. 

How Assets are Split in a Divorce

Section 25 of the Matrimonial Causes Act 1973 is followed by the courts in determining the division of assets upon divorce. The most important factor that is considered during these proceedings is the presence of a dependent child/children. If this is the case, the needs and welfare of the child take precedence and are the first point of consideration. 

1. Current and Future Financial Assets

As stated by the Act: “the income, earnings capacity, property, and other financial resources which each of the parties to the marriage has or is likely to have in the foreseeable future’ will be considered. 

Both parties need to submit financial disclosures to the Court. Existing assets will be valued, and consideration may be given to the potential for earnings in the future. 

2. Current and Future Financial Needs

Here the Court tries to determine and account for any future potential financial obligations that each party may see as a likelihood. This involves the re-housing of each party, with particular attention being paid to whoever is the primary caregiver for any children. 

3. Family’s Standard of Living Before the Divorce

The Court must try and maintain, as far as possible for both parties, a similar standard of life that was enjoyed before the separation. Sadly, this is not a true reflection of reality, and most times, both parties are left a little worse off than before. 

4. Age of Each Party and the Duration of the Marriage

In the case of a shorter-term marriage, the contribution made by each party before the marriage becomes more relevant. It may stand to be that if the marriage was for a short period, and there are no children involved, the Court may decide that a clean break order is best. Meaning that neither party has a financial claim against the other.

However, older parties that have been together for a longer period may be subject to childcare, pensions, and earning potential considerations. 

Divorce is never a fun road to walk, and it has the potential to leave you destitute and on the bones of your bare bum. Get the right attorneys today, and save yourself a comfy seat.