Property division, also frequently referred to as asset allocation, is an inseparable aspect of any separation or divorce procedure. This process comes into play whether you have been part of a marriage, a civil partnership or even a cohabitation relationship. Often marked by complexity and causing considerable stress, the process of property division demands meticulous attention and careful navigation. This comprehensive guide aims to provide clear and detailed advice on how you can navigate through this convoluted process under the constraints and guidelines provided by UK law.
Understand the Legal Framework:
To ensure fair and appropriate property division after a separation or divorce, there are specific legal frameworks in place within England and Wales. The Matrimonial Causes Act 1973 provides pertinent guidelines for asset distribution following a formal divorce. For those involved in the dissolution of civil partnerships, the Civil Partnership Act 2004 offers clear governing regulations.
Contrarily, cohabiting couples find themselves in a unique situation where there is no specific legislation to protect their claims. Their claims usually rest on property law fundamentals.
The courts wield extensive powers when it boils down to deciding how assets should be divided amongst both parties. They take into consideration all circumstances surrounding the case while striving to achieve equity between both parties involved. It’s important to note that if children under 18 years old are involved, they become the court’s prime concern.
Identifying Marital Assets:
Marital assets are essentially assets that were jointly acquired during the course of a marriage or civil partnership. These can include various properties such as homes (commonly referred to as matrimonial homes), businesses operated jointly by the couple, accumulated pensions, joint savings accounts and personal items like cars or furniture.
At this point in the process, it is imperative that you seek an agreement with your partner on what constitutes marital property. If a consensus cannot be reached due to disagreements or discrepancies, professional advice should be sought. Solicitors experienced in family law can provide valuable insight and guidance.
Valuation of Assets:
Upon identification of all marital assets, these need to be accurately valued. A common approach is to base valuations on their current market value. However, remember that debts must also be included in this valuation process, as they could potentially reduce the overall total net worth of the marital estate.
Certain assets, such as business interests, may require an expert valuer who specialises in company valuations. Similarly, for pension valuation, you may need actuarial calculations, which can help determine the present-day value.
Consideration of Non-Marital Assets:
Non-marital assets refer to those assets that were acquired either before marriage or after separation. They also encompass gifts or inheritances received by one party during the course of marriage but never intended to be shared with the other spouse.
However, there are cases where non-marital assets can be divided if it is deemed necessary by the court. This usually happens when marital assets are not sufficient to meet both parties’ needs post-separation.
The Principles of Needs and Fairness:
When it comes to dividing assets following a divorce or separation, ‘needs and fairness’ are leading principles employed by courts. The financial needs of each party will be closely scrutinised, along with their potential earning capacity versus their living costs.
Fairness does not always imply a 50/50 split, as many factors come into play. These considerations can include the length of the marriage, age, health, income and future earning capacity, among others.
Understanding the Welfare of Children:
Children’s welfare is paramount in any separation or divorce proceedings involving children under 18. The courts will ensure that their housing and other financial requirements are met so they do not experience any significant drop in living standards post-divorce.
Legal Advice:
Every case of property division is unique, with its own set of complexities. Therefore, it’s highly advisable to seek expert legal advice early on in the process. A family law solicitor can help you understand your rights, guide you through the process, draft any necessary legal documents, and represent you before the court if needed.
Negotiation/Mediation:
Prior to applying for a formal court order, most couples attempt negotiation or mediation first in order to reach an agreement regarding property division. A mediator who is an impartial third party can assist by facilitating communication and aiding in conflict resolution.
Court Proceedings:
Unsuccessful negotiations or situations unsuitable for mediation, such as cases involving domestic violence, may necessitate court proceedings. The judge will then make a final decision on asset distribution based on the principles mentioned above.
The Final Settlement:
The final step in the property division process involves implementing the agreed settlement or court-ordered verdict, which might involve selling off properties, transferring titles or dividing pensions.
It’s crucial to remember that following this settlement, it is important to review your will, as it may contain provisions for your former spouse or partner that need updating.
It’s crucial to remember that this guide merely provides a general understanding of property division. It is highly recommended to consult with a qualified legal professional who can advise you based on your specific circumstances.
The process of property division can be emotionally and financially demanding, but with proper guidance and careful planning, it is possible to achieve a fair and amicable resolution.
