Division of Assets on Divorce: Can my Spouse Take me to the Cleaners?
The pressing question for most people facing a divorce is what financial consequences they will face post-divorce.
There can be no disputing the fact that life will invariably be financially less comfortable for both parties immediately after divorce. Where the combined income of both parties has previously been used to fund one household and one set of expenses, that pot is now expected to house and maintain two households.
People will often hear horror stories from friends relating to the finances. Some fear that they will be “taken to the cleaners” or that they will take nothing away from the marriage and face financial hardship.
If you have concerns in relation to the finances, then take some reassurance in the knowledge that the Court’s overriding objective is for fairness to prevail. Fairness does not always mean equality, but it encourages a division of assets and income to ensure that neither party suffers financial hardship post-divorce. How fairness manifests itself will vary depending on each situation and this is why you should never anticipate the outcome of your own case, based on the experience of others.
Many cases are defined as “needs” cases. This is where there is not enough money in one pot to adequately house and maintain both parties. In that situation, the Court considers the “needs” of the parties, with the children as the paramount consideration. By way of an example as to how this transpires in reality is that one common scenario is where the parties to a marriage have arranged that one party may stay at home to care for the home and/or children, whilst the other pursues a career, having been enabled to do so by the other spouse’s contributions at home.
What follows in this situation can be a financial imbalance, with the party who has adopted the role of caring for the home and children finding themselves in a financially weaker position than the other, with a diminished earning capacity, pension and mortgage raising capacity. it will therefore often follow that the financially weaker party will need more of the capital to rehouse.
If one party has been out of work, or worked intermittently throughout the marriage, then the Court will expect that party to maximise their earning capacity. The income the Court will attribute to that party does have to be realistic, based on their experience and time out of work. The Court will not expect a party who has not worked throughout the marriage to generate a six-figure salary, but it does mean that the Court would expect that party to find work to suit their qualifications and experience.
If you are thinking about your future post-divorce, then a common-sense approach from both parties is most helpful. A collaborative approach to the division of assets, such as a round-table meeting, or mediation is invariably much cheaper than Court proceedings and can hopefully preserve a reasonable relationship between the two of you, post separation.
There is only one pot of money and far better that the pot is used to meet your own needs, than paid to your lawyers.
At Watson Thomas, we take a pragmatic approach to your case. We look to find a solution that works for you at an early stage. We try to avoid court proceedings where possible and will always offer collaborative solutions if you and we think that they will work.