When getting a divorce, some of the most common questions concern how assets are split and what needs to be taken into consideration. Is it always 50:50? Are all assets split? What if we can’t agree? This post will cover these topics.
Is it always 50:50?
50:50 is the usual starting point for solicitors and courts, but this isn’t always the end point. Depending on how much you and your ex need to live on, whether you have children and if one of you will be looking after them, both of your abilities to earn and your role in the marriage (i.e. breadwinner or carer) the split can be altered quite considerably.
The judge or solicitor will usually try to ensure all assets are shared out (known as a clean break), so that after divorce you’re not financially tied to each other.
In terms of the home, this can be split in various ways:
- One ex gets the house completely. The other gets assets equal to the house’s value. This is the typical case where children are involved. A Mesher Order may also be agreed to. This can state that when the children leave home, if the ex staying in the house remarries or a new partner moves in, the other will get a share of the house’s value. You can discover more about Mesher Orders here.
- If you have a joint tenancy, one ex buys the other out.
It’s important to note that if you, or your ex individually owns the house (sole tenancy), this usually has no bearing on who gets the house or how much value you each get from its sale. This is because the house was likely a marital asset which you both shared. A judge can also transfer ownership to meet the others financial needs.
- You both decide to sell the house and share its sale value. This would allow you to put money towards new houses.
What if our house is rented?
A rented home can also be split as it still considered an asset. As above, the tenancy can be transferred between you both, so long as your landlord agrees. This is more likely if the remaining tenant can afford the rent. If you can’t agree on who should remain in your home, you will need to ask the court to decide and your landlord must agree to this court order.
Unfortunately, if you and your ex are joint tenants in a rented home, and one of you gives notice to quit the whole tenancy, then it automatically comes to an end and neither of you will be able to live there. Applying for a court order can prevent this from happening, and talking through your options with your ex is also advised.
What if we signed a pre-nuptial agreement?
You may have signed a pre-nuptial agreement claiming you (or your ex) would get the house in the event of a divorce. Though the agreement is not actually legally binding, it does present the court with good evidence for a claim. The court may decide to honour this agreement, or they may believe doing so would be unfair. Whether the other invested in the house, you both gave full financial disclosure and the current state of both of your financial situations will be taken into consideration, among other factors.
However you decide to split the house and your shared assets, it is advised you have them all valued, as well as determining how much mortgage is left to be paid off (and the cost of paying the mortgage off early – known as, ‘‘early redemption penalties’’). Coupled with legal costs and estate agent fees if you decide to sell, this will give you a better understanding of how much money you will be left with.
If you can agree on a split:
You can avoid going to court, instead asking your solicitor to create a consent order detailing your agreement on how assets will be split, which will be sent to court for approval. Upon approval, the agreement becomes legally binding. If the court does not think the agreement is fair they may change the court order or create one themselves suggesting how you could split your assets. A consent order costs £50.
If you can’t agree on a split:
You will need to ask the court for a financial order. This will state who will gain ownership of your home and applying costs around £255. It may involve various court hearings and last between 6-12 months. It is clearly a lengthy and potentially expensive option.
Splitting up assets can seem like an endless process, but one that can be beneficial for both sides. Talking with your ex about what you both want and need can potentially create a more fruitful and less expensive situation. As with anything regarding divorce, thoroughly research your options ensuring you are well-equipped to put your case forward.