Your guide to family money and property when you separate

Dividing assets

The main objective to be achieved when apportioning capital assets between parties should be one of fairness. The starting point is one of equal division and should only be departed from if there is good reason. This reasoning is enshrined in case law from a very prominent family law case White v White, HL (2000) 2 FLR 981

The court has reinforced the need to apply the criteria set out at S25(2) of the Matrimonial Causes Act 1973 (as amended).

Section 25(2) of the Matrimonial Causes Act 1973/Schedule 5 Civil Partnership Act 2004

This sets out how the court exercises its powers when considering the level of a financial order. The court shall in particular have regard to the following matters:

1. The income, earning capacity, property and other financial resources which each of the parties to the marriage or civil partnership 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 or civil partnership to take steps to acquire;
2. The financial needs, obligations and responsibilities which each of the parties to the marriage or civil partnership 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 or civil partnership;
4. The age of each party to the marriage and the duration of the marriage or civil partnership;
5. Any physical or mental disability of either of the parties to the marriage or civil partnership;
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, [whatever the nature of the conduct and whether it occurred during the marriage or civil partnership or after the separation of the parties or (as the case may be) dissolution or annulment of the marriage or civil partnership], if that conduct is such that it would in the opinion of the court be inequitable to disregard it;

Maintenance

In marital or civil partnership proceedings there may be circumstances which entitle one party to claim an income from the other.

In all cases it must be considered whether or not all claims should be extinguished - this would result in an arrangement known as a "clean break". Nowadays many parties both work full time and income claims may not be appropriate. Sometimes it may be appropriate to provide one party with more of the available capital in place of maintenance to achieve a clean break or provide capitalised maintenance which would achieve the same result.

If a clean break is achieved then neither party will be entitled to raise any future claims against the others income.

Property

Most families will have a privately owned home, but what should happen to it? The needs of the children are the first consideration and maintaining a suitable home for the children of utmost importance.

The main options for you and the property are:

1. For the property to be sold and the net proceeds divided between parties (not necessarily on a 50/50 basis).
2. For the property to be transferred to one party (usually with the other being released from any mortgage) on the following basis:-

• Outright i.e. with no payment to the departing party.
• Lump sum i.e. with a cash payment or capital adjustment awarded to the departing party.
• Retained interest i.e with the departing party keeping a percentage interest or fixed amount of equity in the property which will be received in the future upon the sale of the property. The sale could be triggered by an event such as the youngest child attaining the age of 17 or finishing full time education.

For advice and information on asset division following separation contact Jo Thurlow at jt@kidwellssolicitors.co.uk or telephone 01432 278179.