How are assets split in a divorce settlement?

Chris Brown, Family Solicitor at Hegarty Solicitors
↑ Chris Brown, Family Solicitor at Hegarty Solicitors

Divorce can be an incredibly stressful and difficult time. Not only are you ending a relationship of often years, sometimes decades, but wondering how you will cope financially and the uncertainty around how assets are to be divided can add to the stress. Chris Brown, Family Solicitor at Hegarty Solicitors highlights the important things to consider to ensure you are fairly compensated and supported through the financial side of a divorce

The process for splitting assets
Usually, the first stage in the process is for each spouse to make a ‘full and frank disclosure’ to the other of their financial circumstances. This should include all assets along with any money owed from loans or credit cards.

Careful consideration then needs to be given to each party’s post-divorce capital and income needs and each must keep the other informed of any changes in financial circumstances throughout the process.

It’s worthwhile considering using a divorce solicitor and financial advisor who are experienced in divorce and financial matters, as they can help you to review your assets and advise the most tax-efficient way in which to divide them.

Once both spouses have reached a point of agreement, they should then apply for a financial remedy order or consent order, to make the agreement official and legally binding.

If an agreement between spouses cannot be reached, divorcing parties will need to apply
to the court and start a process where a judge will help them to work out what the financial remedy order or consent order should look like.

The assets that are taken into consideration
Broadly speaking, assets that need to be considered within a divorce settlement include the family home, any other property owned by either spouse, savings, business interests and other investments – anything that has a value. Even assets that cannot be readily liquidated for their value must be included, such as patents, businesses, or publishing rights. Assets can also include anything with future value, such as pensions, a tax refund or accounts payable.

‘Fair’ doesn’t always mean ‘equal’
When it comes to the splitting of assets, ‘fair’doesn’t always mean ‘equal’. More often than not, an exact 50/50 split is not feasible. Perhaps an unequal division is needed to meet the particular needs of one party, or maybe some assets are ‘non-matrimonial’ such as inheritance or post-separation accrual.

This is why it is so important to consider the individual needs and circumstances of each party when deciding on the division of assets. The court will look at what will enable the needs of both parties to be met, with the first consideration being any children involved under 18.

A good example is if one spouse is a stay- at-home parent and incurs the majority of childcare responsibilities, they might need a higher share of financial support in order to assist them in getting back into the workplace, compared to the other spouse who already has a stable job with a good salary.

Any debts which have accrued during the marriage will usually need to be deducted from the asset pot before it is divided.

If a spouse has incurred personal debts, such as credit card debts, and the card is solely in their name, that one spouse is responsible for the repayment of these. However, a court could order a payment towards them if the spouse with the credit card debt can prove that the debts were jointly raised – or spent on something both spouses used or experienced.

Joint debts, such as a joint mortgage, cannot easily be divided after divorce. Each former spouse will be responsible for the whole joint debt (including their former partner’s share).

Interestingly, the responsibility for any debts held by a spouse before they married depends upon the length of the marriage, because as time passes, they could be seen as part of the joint financial situation.

Debt can be an incredibly complex issue and it is where a divorce solicitor can really add value and help reduce emotional stress during divorce settlement conversations.

There are three ways of dealing with personal or workplace pensions at the point of divorce – pension offsetting, pension sharing and pension attachment orders. All offer slightly different ways to split or share a pension asset. The options for dealing with state pensions are different, however, and will depend on the date each spouse reaches state pension age.

Spousal maintenance
Spousal maintenance is a regular payment made by a former spouse to their ex-husband or wife and is usually only paid where one partner can’t support themselves financially without it. The amount they could receive depends on how much they need to live on, how much income they already generate and their earning potential in the future, and, of course, if children are involved.

Alternatively, arranging a ‘clean break’ ends any financial ties between spouses meaning there are no spousal maintenance payments required. A court order should be obtained to set out the financial arrangements and state that there is to be a clean break.

● At Hegarty, our family law specialists draw on years of experience to guide our clients through the entire divorce process, including the ins and outs of agreeing a mutually beneficial and agreeable divorce settlement. If you require practical, helpful advice and support regarding any aspect of divorce, please contact us on 01733 346333 or visit to make an appointment today.

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