Terry & Co.

Principles Applicable in Dividing the Matrimonial Assets

 


 

 

 

 

 

 

People involved in divorce proceedings almost always want to know on what basis the Courts divide up the matrimonial assets between husband and wife if the Courts have to decide the issue. Indeed, this is what is at the heart of most divorce cases. If there is a dispute it is more likely than not to be about money. In fact, the relevant principles are set out in Section 25 of the Matrimonial Causes Act 1973 which, essentially, reads:-

"25 (1) It shall be the duty of the court in deciding whether to exercise its powers .... to have regard to all the circumstances of the case including the following matters, that is to say -


the income, earning capacity, property and other financial resources which each of the parties to the marriage has or is likely to have in the foreseeable future;


(b) the financial needs, obligations and responsibilities which each of the parties to the marriage has or is likely to have in the foreseeable future;


(c) the standard of living enjoyed by the family before the breakdown of the marriage;


(d) the age of each party to the marriage and the duration of the marriage;


(e) any physical or mental disability of either of the parties to the marriage;


(f) the contributions made by each of the parties to the welfare of the family, including any contribution made by looking after the home or caring for the family;


(g) ...the value to either of the parties to the marriage of any benefit (for example, a pension) which ... (by reason of the divorce) ..that party will lose the chance of acquiring;..."


It should be mentioned that Parliament did in fact pass the Family Law Act 1996 which would, to some extent, have modified the above factors but that Act was due to be brought into force in stages by Statutory Instruments laid before Parliament by the Lord Chancellor. It now looks as though many of the proposals of that Act have been shelved and there are unlikely to be major changes to what happens in practice.

 

It should be emphasised that each case is different and that the rules are not mechanically applied. It takes knowledge of the decisions of the courts and experience to acquire a "feel" for the sort of decision which a court is likely to make in any particular case. For that reason there is no substitute for professional advice. The procedure by which financial issues (transfers of property, maintenance etc) are resolved within the context of divorce is known as "ancillary relief" and if there are any significant assets involved it is sensible to take sound legal advice about this. It is normally the most contentious area of a divorce and there may be a great deal at stake. There are also specific issues about divorce of concern to men in particular to which attention needs to be paid if the man is not to come out of the process feeling aggrieved and bitter. It is not a mechanical process and there are many pitfalls to avoid which are not obvious from the wording of the above Act.

 

A layperson who has no experience of other divorce cases and who is personally involved in a divorce is always likely to seize upon the particular words of the above section which seem most favourable to his or her own case. This is an entirely understandable phenomenon (and one to which lawyers themselves are as prone as anyone else when personally involved in divorce) but the court must always look at matters in the round. Divining the "right" answer in a given case is precisely why one needs professional expertise.

 

If one takes the very common situation where, for example, a marriage has lasted ten years and there are young children it is quite likely that the wife and children will remain in the former matrimonial home and that the property may be transferred into the wife's sole name. The reason this happens is that the "needs" of the children to have a roof over their heads tend to outweigh most of the other factors. There is no way of knowing this from a simple reading of the words of the section but that is very often what happens because any other options are very limited.


Please contact David Terry at David_Terry@dterry.demon.co.uk if you need any further information about this or any related matters. Despite the apparently straightforward wording of the above Act a layperson cannot predict the decisions of the courts without knowledge of how the courts work in practice and for this reason professional advice is essential.