Info & Advice

Are 50/ 50 divorce settlements always fair?

Answer: no. Although an equal division of assets is the normal starting point in divorce settlements, fairness, not mathematical equality, is the guiding principle and this is achieved by fully considering each party’s specific “needs”.

In the context of divorce, ‘needs’ refers to the funds or other assets each party to a divorce requires to pay their bills and continue their lives after the divorce.

Request a Free Consultation with a Solicitor

If one spouse has a high-paying job, they will have fewer needs than an estranged partner with a more modest salary, or no job at all. The higher earner can pay their way more easily. If a divorcing couple cannot agree a fair settlement between themselves, and one party applies for ‘financial remedy’ (settlement) hearings in a family court, judges will recognise differences in earning power and take them into account when calculating the settlement.

A fair settlement

In many instances of course, a straightforward, equal division of the couple’s money and property will indeed be the fairest outcome, if this provides sufficient means to meet both parties’ needs.

But if this is not the case, the party with greater needs will normally be allocated a greater share of jointly owned assets – although not necessarily a greater financial one. They may, for example, be granted more than 50 per cent ownership of the former family home, or of other property owned by the couple. Housing is often a major consideration when couples split up: where will each party live and will they be able to afford to maintain themselves there?

Divorce courts distinguish between “matrimonial” and “non-matrimonial” property. The former is wealth accumulated during the marriage, and therefore unambiguously subject to division on divorce. Non-matrimonial property refers to assets brought into the marriage by each spouse, or acquired on a personal basis during the marriage – for example, via an inheritance. Normally this wealth will not be eligible for division if the couple divorce – but only if the matrimonial assets are sufficient to meet each person’s needs. If they are not, then the courts may need look to non-matrimonial wealth if there is no other way to meet the needs of the less wealthy party.

There is one additional consideration that takes a higher priority even than needs, and that is the welfare and best interests of any children of the family.  In rare instances, these may conflict with their parents’ financial interests.

The law

Needs and fairness are more than just guiding principles: the Courts are required to take individual circumstances into account. Section 25 of the central piece of marital legislation, the Matrimonial Causes Act 1973, states that the following must be considered during financial remedy proceedings:

  • Each party’s resources and income.
  • The standard of living enjoyed by each party prior to the separation.
  • The ages of each individual (because this could affect their ability to earn a salary).
  • How long the couple were married for.
  • Whether either party has disabilities (which, again, could affect their ability to earn).

In addition, divorce courts need to factor in:

  • The contributions each party made to the marriage. These need not be financial: a stay-at-home mother is considered to have made a significant contribution by caring for children and the couple’s home, and this must be recognised in the settlement.
  • Benefit entitlements – for example, pensions – that could be at risk following the divorce.

The two elements of divorce

Your marriage is coming to an end: you or your spouse have submitted the application and the clock is ticking. You may be relieved you don’t have to keep on pretending any more or you may feel your world is about to turn upside down. Whatever the case, it’s important to understand the two-pronged process that is about to begin.

Legally ending the marriage is an administrative matter. It involves formally declaring that the marriage is over, and then submitting two subsequent declarations at the required intervals, applying for:

  • A conditional order of divorce, 20 weeks after the initial application
  • A final order of divorce, six weeks and one day after the court has issued the conditional order.

Formally ending the marriage can still be done by posting paper forms but it is now more usual to do so online. But crucially, this process does not involve the sharing out of your money or property and reaching a financial settlement. That is a separate process, although one that is normally conducted at the same time.

Negotiating with your soon-to-be-ex spouse and agreeing on a fair division can be a complex undertaking, especially if you have substantial assets. Expert legal assistance can pay real dividends here, helping to ensure the agreement you eventually reach will be legally watertight and – wherever possible – final. Divorce courts work to end the financial relationship between the spouses as soon as possible. It may not be possible to do so immediately – one spouse, for example, may require maintenance payments – but a legally tight settlement will be designed to help each spouse eventually become fully independent, with no further claims on their ex-husband or wife.

Related Articles

Load More

Podcast: Listen Now