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Considerations when making a split (YEP 31/01/08)

When a marriage breaks down there are inevitably financial implications that need resolving. Typically, this will involve the former matrimonial home, along with other assets and liabilities that have accrued during the marriage.

The Family Courts will only become embroiled where one party actively seeks resolution by this manner. It is more beneficial if the parties to the divorce can agree on a financial settlement. This can then be drawn up in a Consent order which, providing it is fair, will be endorsed by the court and will be binding on both parties.

It is useful, when attempting to negotiate a settlement, to be aware of the factors a judge would consider, should he/she be faced with the facts. These provide an invaluable guideline so that reasonable discussions can take place. Main factors to be considered are:

  • the needs of any children
  • the income and resources (both current and future) available to the husband and the wife — this includes pension provision;
  • the likely needs of the parties;
  • the standard of living enjoyed before the breakdown of the marriage;
  • the husband's and wife's age
  • the duration of the marriage
  • contributions made by each party throughout the marriage;
  • conduct of the parties (mainly in connection with finances)

Incidentally if you run your own business this will be considered as an asset. The courts however do not want to see viable businesses stripped apart for divorce settlements so will want to see it continue and flourish. If there are children involved the continuation of the business maybe in their best interests anyway.

If your business is not doing very well and is going into receivership you could find that the trustee in bankruptcy may get first shout on any value in the business rather than your partner. Depending on the circumstances, creditors may be paid off first leaving your spouse with potentially nothing from the business.

However, every case is different and reaching settlement is not an exact science. These factors should be applied to all cases but some will have more relevance than others, depending on the facts.

Certainly in recent years the starting point for all cases is a 50/50 split of the available assets. If this is fair and practicable, it is often the most sensible way forward, especially if this effects a “clean break” financially between the parties. However, in many circumstances, this starting point should be adjusted in line with the factors, as outlined above, to achieve a fair settlement.

It is a difficult time for all concerned and it is important that you seek good legal advice from an experienced family solicitor at the earliest opportunity. Both parties need to know and be prepared for what they could be facing and need to ensure that their rights are protected.

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