What Assets Will Be Divided In My Divorce or Civil Partnership Dissolution?
As mentioned on the previous page, all assets start off as potentially forming part of the matrimonial pot. These will include, but are not limited to :-
Houses and land
Bank and Building Society Accounts;
ISAs, investments, shares, premium bonds;
Life insurance policies;
Jewellery, artwork and other valuables;
The assets will include those in joint names and those in the sole names of either spouse, and will include any assets held abroad as well as in the UK.
A value will need to be obtained for those assets which are not ready money. Once it is known how much everything is worth, and once any assets which should be kept out of the pot have been identified, we can then look at what percentage of the total pot each party should receive and how the assets should be divided.
It is important to note that it is not the case of each and every asset being divided. It can become a balancing act, with one party retaining one asset and the other retaining two which, when added together, have the same value as the one asset retained by the other party. There are no set rules and a settlement should be acheived which suits the needs of the parties, for example, one party may need ready cash whilst the other is happy with an investment to use in the future.
How will the Courts deal with a family home on divorce or dissolution?
The Family Courts have the power to make the following orders which are referred to as property adjustment orders:
Immediate Sale – useful to effect a clean break and usually allows for a division of the sale proceeds so that each spouse can purchase a new home either mortgage free or by using their share towards a deposit for a new home. Depending on the other assets and the circumstances of the case, the sale proceeds may be retained by one of the parties only.
Transfer – means that the home can be retained by one party and will be held in their sole name. It is common for the person who is transferring their share of the property to receive a lump sum payment from the person who is retaining the home. If the equity is small the transferor may not receive anything in return. Another option is that the party transferring their share retains another asset of equal value instead.
Deferred trust of land – this option is avoided wherever possible so that a clean break can be acheived, but it is still needed where an immediate sale of the matrimonial home is not appropriate and a transfer cannot take place, for example, when the person remaining cannot borrow enough money to remortgage and pay the other party a lump sum but needs to stay in the home so that the housing needs of any minor children are met. The former matrimonial home will still be held in the parties joint names, the party in occupation will be resposible for all outgoings until sale, and the property will be sold upon a certain 'trigger event' happening, for example the youngest child reaching 18 years or finishing full-time education or the party in occupation remarrying or cohabiting for over six months. The order will still specify how the net proceeds of the sale are to be shared between the parties.
Transfer and charge back – This method is becoming increasingly common and involves the house being transferred to the person remaining in the property but their spouse will register a charge against the property to protect their interest.
What happens to my rented house if I get divorced?
S.24 of the MCA 1973 allows the court to consider if the tenancy can and should be transferred into the sole name of one party.
What if the matrimonial home is in the sole name of my spouse?
It does not matter if the matrimonial home is held on the name of one of the parties only. It is still a matrimonial asset and will form part of the pot unless there is a justifiable reason for it not to be included. However, the party whose name is not on the title to the property is strongly advised to register a Notice of Home Rights against the property with the Land Registry to protect their equitable interest and to ensure that the other cannot sell or remortgage without their knowledge.
For more advice about how your assets may be affected following divorce contact our Family Solicitors to discuss your financial matters via firstname.lastname@example.org or by calling 01524 581 306 to arrange an initial fixed fee consultation.