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What am I entitled to in a divorce settlement?

What am I entitled to in a divorce settlement

As with many questions in family law there is no one, simple answer to the question: what am I entitled to in a divorce settlement? Every case is different because the circumstances of each couple is different.

Perhaps it is better to look at what needs to be considered so that a fair divorce settlement can be reached.

What to consider before agreeing a divorce settlement

All aspects of your finances will need to be considered before a fair financial settlement can be reached. The first of these is capital assets and debts, which includes properties, shares and savings as well as any debt that you have individually or as a couple.

Secondly, pension valuations must be considered. Pensions are all too often ignored or glossed over but, in many cases, can be the second most valuable asset, after the family home. Income, for both parties, will also need to be considered as will any business interests.

If you are making an application to the court for their judgement on a divorce settlement you will be asked to complete a Form E financial disclosure document. In fact, this is often the best method of gathering all the information needed to reach a fair settlement and work out what you are entitled to.

What is a fair divorce settlement

Before agreeing to a divorce settlement, it is essential to get to the real value of all of the assets of both parties. In the past there has been a huge tendency to underestimate the value of a pension and maybe forget the value of a house must be offset against any outstanding mortgage commitment.

Getting to the true value can be tricky but unless you do it’s unlikely you will achieve a fair divorce settlement.

It is important to remember that you are not always comparing like with like – money that is tied up in a property isn’t the same as cash in the bank. Cash isn’t the same as an investment (which might rise or fall in value). And pensions, whilst they can often be a very valuable asset aren’t readily available and accessing them may come with strings attached.

The thing to remember is that you should not focus too much on each asset individually, you need to look at the overall picture – the sum total of the marital assets. When splitting the assets between the parties the division needs to be fair. This can be quite a difficult concept to get your head around if you do not have the benefit of someone who has experience in looking at how particular assets may be offset against each other. It may be in a lot of cases that equalising the pension after a long marriage is right, but that does not necessarily mean that you should equalise what happens to the property as well. It is important to think about the overall picture – not just each individual component.

If you are in this position you will need to obtain valuations for your assets – but do speak to a specialist family lawyer first as the devil is in the detail, especially when it comes to pensions valuations and the type of valuation you will need.

How are assets split in a divorce?

The starting point for dividing assets will normally be a 50/50 split. It is important to understand that this is very much a starting point. From there, a variety of things are considered. It is worth bearing in mind that the final settlement amount will consider the length of your marriage, your ability to generate income, as well as your needs now and in the future.

For most couples there will be several assets to be considered and how each will be treated will depend on your needs now and in the future. There are options like pension sharing, equity transfer, splitting the proceeds of sale. It is essential to consider all options carefully before making a decision.

The starting point must be an understanding of your priorities – of course you can’t always have what you want but an understanding of your financial needs is an important consideration for your lawyer.

Someone in their 50s and 60s might have retirement needs on their mind whilst for a young mother for example, housing needs are going to be the absolute priority.  This will determine how the assets are split. The young mother for example will be more likely to take her share, whatever that may be, as equity in the house rather than as a pension share.

How is the house divided in a divorce settlement?

The family home is often the largest asset to be considered.  There are several ways it might be dealt with:

  • Sell and divide the equity
  • One party buys the other party out
  • Remain as joint owners but with one party living in the house (often used whether there are children who need a stable home) and agreement that the house will be sold, and proceeds split at a date in the future.

As we have indicated elsewhere the house should not be considered in isolation and whatever option is chosen needs to be considered in the context of other assets and the needs of both parties.

Who gets what in a divorce settlement?

Many couples are concerned about who will get to stay in the house, who will keep the family car and how household furnishings will be divided.  There are no hard and fast rules on this matter.  In an ideal world you should try and agree between yourselves how household possessions are divided, although this can be tricky and may require some perseverance.

Failing to reach an agreement could mean taking your case to court, which is costly and ultimately eats into the pot of assets you are arguing about. Better to make concessions than go to court, potentially lose more and have a judge give a ruling which might be less favourable to you.

Of course, what we have not mentioned so far are the needs of any children. Their needs and rights take priority, and their care needs to be considered when agreeing a divorce settlement.

Is a wife entitled to half of everything?

As you’ve probably realised if you’ve read the details above, yes in principle they are, although it will depend on your particular circumstances.  Things that will affect the 50/50 stance are the fact that one party may wish to relinquish their benefit from the sale of any property in return for keeping a greater portion of the pensions pot and savings. If one party, often the wife, has given up a career to stay at home and raise children, it may be considered that her earning potential in the future has been affected and so she may be entitled to a larger chunk of the assets from the divorce. The answer is therefore very much case dependant, and you should seek advice before agreeing to a settlement.

How much will I get in a divorce settlement?

The Money Advice Service (MAS) offers a divorce settlement calculator, but it makes a lot of assumptions, and we would urge extreme caution if using a tool like this. In short, don’t get your hopes up or, conversely, get disheartened, if you get a figure tumble out of the bottom after entering your details.  The only way to find out what you might get in a divorce settlement is to speak to an experienced family lawyer and ask them for advice on your circumstances. They will give you an honest view on a likely settlement, factors to be considered and the approach you might take to reach your own fair settlement.

Kate Butler
Family lawyer Northampton

Blog Author - Kate Butler

Kate ButlerKate Butler

Kate is a Northamptonshire-based divorce and family lawyer with Woolley & Co, Solicitors.


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