A key part of UK divorce settlements, once arrangements for the care of children and other dependents has been agreed upon, is the division of marital assets. These are belongings and financial effects that have been acquired during the marriage. Under the law in England and Wales, it doesn’t matter which person has contributed to, or purchased each one – if something was accumulated during the marriage, it counts in the calculations when dividing assets in a divorce. If only one person was earning money from paid employment during the marriage, any income from this can be considered a joint marital asset, since it was acquired during the union.
What Are Some Examples of Marital Assets?
Marital assets can encompass savings, stocks and shares, as well as physical belongings acquired during the union. These can include, but are not limited to the following:
1. Joint and individual savings and investments
2. Stocks and shares
3. Joint bank accounts
4. Pension funds and contributions
5. Salary, wages and bonuses from paid employment
10. Sentimental memorabilia
11. Joint business assets
What About Non-marital Assets?
Conversely, non-marital assets are those that were acquired by either party before the marriage took place, or after the divorce has been finalised. These remain with the person who owns them and do not count as part of UK divorce settlements. Three examples of non-marital assets include property bought before or after the marriage, an inheritance left to just one party involved in the divorce or a family business that the husband or wife has not invested in, nor played any part in running.
How Are Marital Assets Divided in a Divorce?
The law concerning the division of assets in UK divorce settlements is covered under Section 25 of the Matrimonial Causes Act of 1973. This Act sets out basic guidelines for English and Welsh courts to follow when dividing assets in a divorce. Sharing out assets is an area that will depend entirely on the circumstances of each individual case.
Normally, all relevant property, belongings and financial effects will be formally identified, valued and shared out between the two separating spouses by the court. A judge will take into account non-financial contributions made by the non-earning party, for example raising children, supporting a spouse’s career and running the home.
Marital assets are not always split equally in a 50/50 divide. Calculations will be made based on each person’s needs and financial situation going forward. Providing for children will be an important consideration, with a judge aiming to ensure that sufficient financial resources are made available for their upbringing and welfare. Sometimes, a judge will instruct a divorcing couple to sell assets, such as the family home, to allow each party to access enough funds to start again in a new property elsewhere. A pension fund could also be divided to allow both parties adequate resources to expect a reasonable post-divorce lifestyle.
Other issues that will be taken into account will include the lifestyle enjoyed by the couple or family before the breakdown of the marriage, how long the marriage lasted, the age of each party and any physical or mental disabilities that exist. Allocated assets can be paid in one lump sum after property has been sold, or as a series of sums, property transfers or handing over belongings as agreed by the divorcing couple and directed by the court.
Can You Keep Non-marital Assets Out of the Settlement?
Sometimes, non-marital assets can be taken into account by the court when dividing assets in a divorce. For example, if a pre-marriage inheritance was used to fund the main family home or joint business. They can also be included if there are insufficient marital assets available to ensure the financial wellbeing of any children from the marriage. Non-marital assets can sometimes be protected by a pre-nuptial agreement that is signed before a marriage takes place.
In this document, written agreement is laid out about what will happen to any significant or especially sentimental assets that are being brought into the marriage, should the union end in divorce. While a prenuptial agreement is not a legally binding document, they are often taken very seriously by a divorce court, or used to settle an associated conflict when the final financial settlements are being made. A family solicitor can help draw up a pre-nuptial agreement prior to entering into a marriage if this is felt necessary by either party.