What Assets Will Be Divided In My Divorce?
In most cases the matrimonial home is the most important property owned by the family, unless of course you are Tatiana Akhmedova who has been at war with her husband Farkhad Akhmedov since 2016 over assets which include a $450 million super yacht and famous works of art!
Back in the real world of MG Legal Family Solicitors in Lancaster we are mindful that whilst the matrimonial home is generally seen as an important capital asset, it can also feel like a liability with mortgage repayments and general maintenance. As a result, the Courts will consider s.25 of the Matrimonial Causes Act 1973 which sets out what factors should be taken into account when considering financial orders, these factors include consideration of income, earning capacity , contributions to the family, conduct and standard of living. The factors will assist the Court in deciding which type of order to make and what size each party’s respective share in the home should be. Your Family Law Solicitor will always warn you that the Court has wide discretion as to its decision and it will take into account both parties past and future contributions alongside the factors in s.25 in order to reach the fairest possible outcome. The case of Piglowska v Piglowska 1999 serves as a reminder that there is no presumption that both spouses have a right to be able to buy a new home from the assets available to the family.
So how will the Courts divide a family home on divorce?
The Family Courts have the power to make the following property adjustment orders:
Immediate Sale – useful to effect a clean break and generally allows for a division of the sale proceeds so that each spouse can purchase a new home either in full or so that the proceeds can be used towards a deposit for a new home.
Outright Transfer – means that the home can be retained by one party. In some instances, if one party is giving up a significant amount of capital by transferring their share the Court will seek to compensate them for their loss so they may order 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.
Deferred trust of land – seen by many as a compromise to the problem of the matrimonial home when an immediate sale is inappropriate but an outright transfer is too harsh. The Court will order that the house be held in the parties joint names, they will specify who will occupy it until a specified trigger event occurs, the order will then specify how the net proceeds of the sale are to be shared between the parties. The Court may use a Mesher Order, Martin Order or Harvey Order when considering trigger events.
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 have a charge registered against the property protecting their interest.
What happens to my rented house if I get divorced?
S.24 of the MCA 1973 allows the court an opportunity to consider if the tenancy can and should be transferred into the sole name of one party.
What if the matrimonial home is not in my name?
MG Legal Family Law Solicitor in Lancaster will recommend that you register your matrimonial home rights to protect your equitable interest in a property. The Land Registry has a simple form to allow for this.
A brief note on lump sums, pensions and other assets
Generally speaking where the family assets are modest a lump sum would not be ordered other than in relation to a division of the net proceeds of the matrimonial home however if following the breakdown of a marriage one spouse has incurred debts due to the failure of the respondent to maintain them, the Court may remedy this by ordering a lump sum payment.
Pensions will often be the most valuable asset in a divorce whether you both have a pension or just one of you does. There are three possible ways of dealing with pension rights on divorce: off-setting; pension attachment; and pension sharing.
It is important to remember that that the Court will look at all assets whether jointly owned or in each party’s sole name when considering how assets are to be divided, this can include anything from investments and savings to motor vehicles.
For more advice about how your assets may be affected following divorce contact our Family Solicitors to discuss your financial matters via email@example.com or by calling 01524 581 306 to discuss.