Cases that involve married couples, divorce and money

• Transferring Property
• Pension Sharing
• Lump Sum Orders
• Maintenance

If a divorcing couple can’t agree how to divide their assets then they may need to go to court. This is known as an application for a Financial Remedy. In this sort of case the court can make four types of order:

Transferring Property

The court has wide-ranging powers to divide and share the property of married couples. In this context property is not limited to land and houses – it also includes shares, life policies, belongings, etc.

Pension Sharing

Pension provision is an important consideration in many cases. The court has power to share pensions, so that the receiving spouse has the benefit of a pension in his or her name which they can treat as their own.

Lump Sum Orders

Perhaps the most straightforward order is a lump sum order. This is when the court directs one spouse to make a one-off payment to the other. For example, a Wife might pay a lump sum to the the Husband in return for the family home being transferred into her sole name.

Maintenance

It often happens that the income of one spouse is much greater than the other’s. Sometimes the court will order that spouse to make regular payments of maintenance. These payments can either be for a fixed period (perhaps until the youngest child reaches 18), or of unlimited duration.

When deciding how to distribute property the court must consider all the circumstances of the case including:

1. the income, earning capacity, property and other financial resources which each of the parties to the marriage has or is likely to have in the foreseeable future, including in the case of earning capacity any increase in that capacity which it would in the opinion of the court be reasonable to expect a party to the marriage to take steps to acquire
2. the financial needs, obligations and responsibilities which each of the parties to the marriage has or is likely to have in the foreseeable future
3. the standard of living enjoyed by the family before the breakdown of the marriage
4. the age of each party to the marriage and the duration of the marriage
5. any physical or mental disability of either of the parties to the marriage
6. the contributions which each of the parties has made or is likely in the foreseeable future to make to the welfare of the family, including any contribution by looking after the home or caring for the family
7. the conduct of each of the parties, if that conduct is such that it would in the opinion of the court be inequitable to disregard it

Note that the court’s first consideration is the welfare of any minor children of the family. This can mean that even though the family home is the only significant asset, it may not be divided between the spouses. Instead it may be kept by the main carer, so that the children can have a home until they reach adulthood.

Note also that the court has limited powers to direct a spouse to pay child maintenance. In fact, this can only be ordered if both spouses consent. Even then the order is only binding for 12 months or so. To a large extent the responsibility for calculating child maintenance has been taken away from the court and placed with the Child Maintenance Service.

For more information visit the Child Maintenance Service

Additional principles

Over the years various additional principles have been developed by the court. These include:

• the starting point in marriages of significant length is that family assets should be split 50/50
• however this doesn’t apply to short marriages; perhaps up to 2 years or so. In those cases the court may try to ensure that the parties leave the marriage with the assets they brought in
• marriage is a partnership. Although each spouse may contribute in different ways (homebuilder or breadwinner) they are equal contributions and justify equal division
• the court will try to ensure that property built up before or after the marriage is preserved to the spouse who acquired it. But if these assets are required to meet the needs of the other spouse then the court will include them in the matrimonial pot
• Bad behaviour by one spouse is seldom relevant. Allegations of infidelity or domestic abuse will not have a bearing on the outcome

Generally speaking there may up to three hearings in a case of this sort:

1. First Directions Appointment (FDA) This is a short hearing, perhaps 45 minutes or so, when the court will consider the case papers and make directions in order to prepare the case for the next hearing. Typically the court will direct that a particular asset is valued. The court may also authorise both sides to put written questions to the other about their financial circumstances.

2. Financial Dispute Resolution (FDR) The second stage, perhaps two or three months later, is a short hearing, maybe lasting an hour or so. Please note negotiations outside of court may take considerably longer – perhaps all day. At this point the financial picture should be more or less clear: the spouses will have disclosed all their assets and income and both will have made offers to settle in writing. These offers will then be considered by the judge who will indicate which of them is fairer. The judge cannot force a settlement on the parties at this stage, but he will indicate what the court is likely to order at a final hearing.

3. Final Hearing If the parties are unable to settle the case then there will be a final hearing. This may last one day or more and will involve the spouses giving evidence. That is answering question from their own and the other side’s lawyer on oath.

What if someone else has contributed to the matrimonial pot?

In most cases there are two parties: the husband and wife.

Sometimes however another person may claim that part of the matrimonial pot belongs to them. So, for example, a spouse’s parents or grandparents might have helped the couple to buy the family home.

In that case the parents (or grandparents) may wish to recover the money they lent when the property was bought. They can then apply to join the case so that they can argue their point in front of the judge.