Property division is a crucial component of dissolution proceedings, whether it be a divorce, separation or the conclusion of a cohabitation agreement. In these particular instances, it’s essential to fully comprehend the fundamentals of property division in the United Kingdom before you proceed. This comprehensive guide aims to walk you through all aspects of property division, from understanding what it entails, identifying the types of properties involved, how they are valued, and considerations for dividing them, to obtaining legal assistance.
Property Division: An Overview
Property division is the process that involves separating assets between parties when their relationship comes to an end. It’s important to note that this does not necessarily imply physical separation but rather refers to assigning ownership rights to one party or another. The primary objective is to guarantee that both parties exit the relationship with an equitable distribution of shared assets.
In order for this procedure to be carried out smoothly and fairly, both parties should endeavour to maintain transparency throughout. It’s also beneficial if both individuals have a solid understanding of their legal rights and obligations relating to asset division.
Types of Property
For property division purposes in England and Scotland, there are generally two types of property: marital (jointly-owned) and non-marital (individually-owned).
- Marital Property: This category includes any assets acquired during marriage or a civil partnership. Examples include homes purchased together, vehicles bought while married or in a civil partnership, furniture acquired jointly, etc., regardless of whether only one party made the purchase. Even investments made during this timeframe are considered marital properties.
- Non-Marital Property: This refers specifically to any assets obtained by either party prior to entering into marriage or a civil partnership. Additionally, gifts or inheritances designated solely for one spouse during their union fall under this category as well.
It’s vital for couples to identify and categorise their assets prior to starting the division process. This can help avoid disagreements or confusion down the line.
Valuing Property
Before properties can be equitably divided among parties, they must first be accurately valued. This may require professional appraisers for tangible assets like houses and automobiles as well as financial experts for intangible ones such as investment portfolios and pension accounts.
Valuation should ideally be performed by a neutral third-party in order to ensure fairness and objectivity. It’s also prudent to get multiple valuations if possible, particularly for high-value items, since this can provide you with a more accurate estimate of your property’s worth.
Considerations in Dividing Property
When dividing property in England and Wales, numerous factors are taken into account by courts:
- Duration of Marriage/Partnership: The length of the relationship often influences property division. Generally, longer relationships result in more equal divisions of joint assets, while shorter ones may lead to each party retaining what they brought into the union.
- Economic Needs: Courts will consider whether one spouse sacrificed career opportunities or earning potential during the marriage for childcare responsibilities or other reasons. If so, that individual might receive a larger share of marital property than the other party, who retained their earning capacity unabated.
- Future Earning Capacity: If one party is likely to have significantly higher future earnings due to their career progression or qualifications, this could influence how properties are divided between both parties.
- Age & Health: Older partners or those with health issues might receive a larger share due to reduced future earnings potential and potentially higher healthcare costs.
These factors aren’t exhaustive but give an insight into how courts make judgements regarding asset division in dissolution proceedings.
Legal Assistance
It’s advisable that you engage a solicitor who specialises in family law when navigating the complex landscape of property division. Having a legal expert by your side can prove invaluable, as they can provide advice tailored to your specific situation and advocate on your behalf during negotiations or court proceedings.
Court Orders
In the event that you and your partner cannot reach a fair and equitable agreement on asset division, the court has jurisdiction to issue orders to resolve this dispute. The following are examples of such orders:
- Property Adjustment Order: This alters ownership rights over a particular property.
- Lump Sum Order: This mandates one party to pay the other a fixed amount.
- Pension Sharing Order: This divides one party’s pension benefits equally or according to a specific ratio between both parties.
These orders offer another pathway for resolving disagreements over property division if mediation or negotiations fail.
Mediation
Before resorting to court orders, mediation is often recommended. It’s a process whereby an impartial third-party facilitator assists you and your spouse in reaching an agreement on property division. Mediation is typically faster, more cost-effective and less adversarial than court proceedings, making it a preferred choice for many couples navigating dissolution.
Financial Disclosure
Full disclosure of all assets held by both parties is essential in property division cases. Any attempt at concealing assets can potentially result in agreements being overturned by courts at a later date or possibly even criminal charges being laid against the offending party.
Financial disclosure promotes honesty and fairness during asset division and helps ensure that both parties receive their rightful share of jointly-held properties.
Emotional Considerations
The process of dividing up property frequently involves making tough decisions about cherished possessions or family homes. Emotionally-charged disputes can lead to protracted legal battles so it’s important to approach matters with calmness and perspective. Where possible, try to make decisions based on logical and fair principles rather than letting emotions dictate your choices.
Post-Divorce/Separation
After the division process, it’s important to ensure that all changes in asset ownership are properly recorded. For instance, deeds for real estate properties should be updated immediately after the division is finalised. Also, consider updating your will, as divorce/separation may have a significant impact on inheritance plans.
In conclusion, property division can appear complex, but with a thorough understanding of principles, detailed preparation and professional guidance; you can navigate this process effectively. The end goal is to ensure an equitable distribution of shared assets when relationships come to an end, thus helping both parties move forward independently in a fair manner.
