In any separation, reaching arrangements over children, money and property can be challenging. This is especially true of high net worth relationships, as negotiations are usually complicated by intricate factors like the future of businesses, overseas properties, and luxury assets. For some spouses, protecting what happens to these features is their main priority. For other spouses, all that matters is getting a fair outcome.
This often leads into the age-old question, “what am I entitled to in a divorce settlement?” After all, it’s natural to feel that, having invested time, money, and effort into a relationship, you’ve earned a reasonable share when it ends. However, what individual partners feel entitled to is not the main consideration for the courts during a divorce settlement. The process is often much more nuanced than this.
In this guide, we’ll explain the principles that govern how possessions are divided in divorce proceedings. We’ll also explore key topics such as pre-marital assets and divorce, the various factors that can influence a settlement, and the strategic steps you can take to secure the fairest possible outcome.
What is a Divorce Settlement?
Often referred to as a ‘financial settlement’, a divorce settlement determines how any and all assets accrued during the course of a relationship are divided when it ends. These assets often include the family home, cars, pensions, and savings, but can also incorporate features associated with high net worth divorce, such as investments, overseas properties, and business interests.
Although the division of assets is often assumed to invariably involve going to court, a divorce settlement can be made without court proceedings — but will still need to be made binding in an official consent order.
The ease with which you reach a divorce settlement often depends upon how amicable relations are with your other half. If communication is severely strained, your family lawyer may encourage you to try a form of alternative dispute resolution (ADR), such as mediation, arbitration, or collaboration. Should these approaches fail, the future of your hard-earned assets will be decided by a judge, which can be a costly and time-consuming process with no definite outcome.
What are Marital Assets?
Also widely known as matrimonial assets, marital assets are any possessions that you or your spouse have accrued over the course of the relationship. In simple terms, if something is classed as being a marital asset, it is seen as the result of shared endeavour.
Many people assume this to mean that any possessions brought into the relationship cannot be classed as being matrimonial, as they pre-date it. However, division of more complex marital assets — such as a business, future inheritance, overseas assets, or even cryptocurrency — in divorce, means that this is certainly not cut and dried in higher net worth separations.
The courts will take a range of factors into account when dividing possessions, including the length of the relationship, the overall financial picture, and the most practical way to ensure that you can both live comfortably post-divorce. In essence, it will focus on everyone’s ‘needs’ being taken care of first.
This means that, even if you owned your own home before you met your spouse, it could still end up being divided between you both in order to ensure that both parties are treated fairly — and needs are at the forefront of this. Therefore, just because an asset could be argued to be ‘non matrimonial’ doesn’t mean that it will not be shared if those needs demand.
What Am I Entitled to in a Divorce Settlement?
“What am I entitled to in a divorce settlement?” may seem like a straightforward question, but it has an ambiguous answer. The reason for this ambiguity boils down to there being no one blanket approach. Effectively, this means that the concept of entitlement is negated by the broader principles of what is fair and reasonable.
The courts may start from a position of both you and your spouse getting a 50/50 share of everything, but will often deviate from this when the finer details of the relationship’s finances are out in the open. Therefore what you’re entitled to in a divorce settlement is seen as being less relevant than the ongoing financial needs of both spouses. This could result in you getting less, or more, of the overall division, depending on a range of complex factors.
The courts will refer to Section 25 of the Matrimonial Causes Act 1973 when deliberating entitlements in divorce in the UK. This criteria stipulates that the following factors should guide the decision-making process:
- The current and future income, earning potential, property, and other financial resources of both spouses.
- The financial needs, obligations, and responsibilities of both spouses now and in the future.
- The standard of living the family had prior to the marriage breaking down
- The age of both spouses and the length of the marriage
- Are any physical or mental disabilities present in either spouse?
- The extent of contributions made by both spouses to the family’s welfare, including homemaking and caring for the family
- The conduct of either spouse
- Benefit value (including pensions) that either spouse will lose due to the separation.
Alongside these factors, the welfare of the wider family unit will also take precedence. This means that factors like the timing of your acquisitions, whether separate finances have mingled too much to be separated, and the future of pre-marital assets and divorce, will be superseded by a desire to limit the impact of separation on children and ensuring that needs of all parties are taken care of.
How Do I Get My Fair Share of Marital Assets?
As we’ve already established, the answer to, “What am I entitled to in a divorce settlement?” isn’t a definitive 50/50 split. Ultimately, there are no cast iron ‘entitlements’ in divorce in the UK. There are, however, a number of crucial steps you can take to greatly improve your chances of getting your fair share from the final settlement.
Obtain Reliable Legal Guidance
The ‘right’ family law solicitor will put you at ease, listen carefully to your main objectives, and fully explain both the divorce process and your available options. Additionally, they’ll help you to complete all necessary documentation, while also discussing the suitability of mediation, collaborative law, and other forms of ADR along the way. Crucially, they will also ensure that your spouse’s disclosure is as thorough as possible, which can be vital if there are genuine concerns about hidden assets.
Commit to Mediation
Separations that reach the family courts tend to be drawn out and costly. Mediation offers a neutral environment for you and your spouse that can make it easier to collaborate over the biggest sticking points. A mediator won’t take sides, but will encourage both parties to open up about the likes of child arrangements and finances.
The discreet environment created in mediation and other forms of out of court dispute resolution, can be especially appealing for high profile figures, However, any couple could find the process beneficial, as it often creates a more positive foundation for future communication.
Accurate Asset Valuation
If uncertainty over pre marital assets and divorce is a feature of your relationship, this could be because those assets are of high value. Therefore, the only way to know for sure that you’re getting your fair share of everything is to make sure that any valuations are as accurate as possible. Full financial disclosure is a legal requirement during divorce in England and Wales, so everything you both own will need to be included in a document called Form E.
Valuations will be made independently using a single joint expert (SJE). There are a range of methods at their disposal, including Market, Cost, Comparison, and Dividend Yield when looking at company valuations, for example. However, these valuations may still be contested if one side thinks that they’re incomplete or inaccurate. If this is the case, your solicitor will need to present evidence to the courts.
Uncovering Hidden Assets
Although concealing assets could lead to a lesser settlement or even criminal charges, it does happen. If you suspect that your spouse is trying to hide marital assets, it’s vital that you don’t investigate this on your own. It’s illegal to access/copy someone else’s documents, open their post, or take something from them that doesn’t belong to you.
Therefore if addressing the likes of pre marital assets and divorce has created suspicion, it’s much better to raise this with your solicitor and let them tackle it through legitimate channels.
Get Your Fair Share with Lowry Legal
While the road to a divorce settlement can be a challenging process, it’s much more straightforward with experienced representation. Lowry Legal has an impressive reputation for helping clients on both sides of the conversation. A highly-regarded member of the Legal 500, we’re equally comfortable helping clients to protect their best interests as we are guiding others towards their fair share.
Because we know that separation can be tough, we adopt a sensitive approach at a difficult time. We prioritise the collaborative approach where appropriate, as this can keep costs low, reduce timescales, and minimise the stress involved. However, if this strategy isn’t right for you, we’ll defend you robustly in court to get the result you deserve.
To speak to one of our specialist family lawyers, get in touch today.
