Financial arrangements on separation or divorce
There is no standard formula for calculating appropriate financial provision on divorce.
Instead, the court has a duty to consider all the circumstances of the case. The court’s approach is to calculate and then distribute the parties’ available resources.
The court first considers the welfare of any child(ren) of the family under the age of 18.
The starting point is that assets accrued during a marriage (known as matrimonial assets) are divided equally, and the guiding principles applied are ‘’equal sharing’’, ‘’needs’’ and “compensation’’.
Where an equal division of matrimonial assets adequately provides for the capital and income needs of each party and any children, this is the appropriate financial outcome.
Where the needs of the parties and any children cannot be met by an equal division, an unequal division of resources may be appropriate instead.
In some cases, the sharing principle may be applied at a later date, with a reallocation of resources in the future. Typically, this may involve one party having a deferred interest in the matrimonial home that will be realised once any children finish their education (usually to first degree level).
Where possible, the court seeks to achieve a clean break between parties on divorce, so that they are no longer financially dependent on one another.
Where the parties’ resources exceed their needs, applying the sharing principle generally leads to an equal division of matrimonial assets.
Where significant matrimonial assets have been generated by the special contribution of one party (that is, by exceptional efforts that are greater than the contribution of the other), the court may provide the other party with a less than equal share to reflect this.
Where assets are entirely, or largely, non-matrimonial, the division of resources may be determined entirely by the claimant’s needs. The financial provision may also include compensation for economic disadvantage (for example, because the party has given up a successful or lucrative career to look after children).
Child maintenance is a separate issue. The Child Maintenance Service (CMS) has primary jurisdiction for assessing and enforcing child maintenance.
To discuss your individual circumstance with one of our friendly family lawyers, please contact 0800 160 10 10.