Are assets split 50 50 on divorce?
The starting point for dividing assets in divorce proceedings is that there should be an equal division of the matrimonial pot, ie assets split 50 50 on divorce. However, there are factors that may be taken into account which deviate from this starting point.
If the matter is before the Royal Court, the Court will take into account all the circumstances of the case to determine what is fair and reasonable for the parties. The Court will only deviate from the concept of equal division, namely assets split 50 50 on divorce, where it is proportionate to do so.
There may be certain aspects of the matrimonial pot which the Court does not deem fair to include as part of the parties’ division. This is where legal arguments come into play in order to protect certain assets of one party, such as pre-acquired property, businesses, inheritance and gifts. Although it must be noted that, where it would be inequitable for the Court not to regard an asset in order to provide equal standing for the parties, it would be unconscionable of the Court not to take it into consideration.
Can inheritance be considered for division of assets split 50 50 on divorce?
Inheritance received is on a case-by-case basis and, as such, it cannot be said for certain whether it would be quarantined or excluded from the matrimonial pot.
In cases where inheritance may be included, it is where a spouse or the children’s needs are unable to be adequately met without giving consideration or weight to it. In contrast, if the needs are met by the assets which the parties’ have available, then this will be taken into account upon division.
The length of the marriage will also be a factor, as well as the consideration as to whether the inherited assets have been included as part of the duration of the marriage.
Will a business always need to be sold on divorce?
The simple answer, not always. However, this does not mean that the business will not be taken into consideration.
Of course, the value of a business may be of significant importance when calculating what is in the parties’ matrimonial pot.
The Court would not order for a business to be sold where it affords financial support for the family. The aim in this sense would be to preserve the business to continue to allow for the monies it provides for the family’s financial stability.
In order to arrive at a solution which suits everyone, with the least amount of direct dealings between the parties, it is likely that one party would continue to run the business and receive an income derived from the business. However, at the same time, the other party would continue to receive an award, for example ongoing spousal maintenance.
What about pensions?
In matrimonial law, pensions are considered on the basis of their ‘cash equivalent transfer value’ (CETV). This where your pension provider offers a lump sum figure on the basis that you give up any future claims to your current pension scheme. If you agree to the offer provided, this is known as a final salary pension transfer.
The concept of ‘cash equivalent’ can be confusing; it is therefore important to note that by agreeing to the offer, you will not receive a lump sum in cash. When it comes to division, the lump sum figure should not be regarded as a liquid asset.
In situations where a lump sum may be awarded to a spouse from the CETV value, it is important to seek the advice of a pensions expert as to what would be available should you be ordered to provide your spouse with a lump sum. It is also advisable to seek confirmation as to when you are able to access the monies, should this be before the usual age of retirement.
To conclude, division of financial assets can be a difficult process; it is not always as straightforward as assets being split 50 50 on divorce. It is important to seek independent legal advice in order to achieve what is fair and reasonable in accordance with your needs, and to afford you the best possible solution in your endeavours for independent living.
Author: Stephanie Devine