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  • Louise Sagar

Defining the marital assets and how they are split during divorce.


Going through divorce is a traumatic and stressful time and as well as getting your head around all the legal processes that you will be going through, you also have to work out your financial position too.


If you can, it is better to establish your existing joint assets together ahead of starting the divorce process, but sometimes this can be a challenge. Alternatively, this can be decided in court, but the outcome is better if you and your ex-spouse can decide this between yourselves.


By law in England and Wales, any assets that you acquired during the marriage are legally considered to be owned by you and your spouse. This includes your pension savings as well as any inheritance that you have received. Other assets that were obtained before you married, you may consider to not be included in your marital wealth, but they should still be disclosed for complete transparency.


The Marital Assets include:


· Businesses owned

· Cash savings and other investments.

· Pensions

· The marital home

· Direct Equities / Shares


It is important that all of these are included during this process and you need to be aware that regardless of who contributed what towards them, they will be treated fairly when deciding how to be split.


Throughout this process, the ideal outcome is for you both to become financially independent of each other and this may mean one of you getting more than the other – depending on your personal circumstances.



Your Marital Home


Sometimes, one party would like to remain in the family home, and this brings several questions around both affordability and feasibility of this option.


A key issue with this asset is that it usually holds a significant part of the marital wealth and therefore if someone wishes to remain in it, the other must then be fairly compensated.


This can be done by giving more of the other wealth over to spouse or by the person staying in the house taking out a mortgage to pass capital over to the spouse.


You may both agree to let one of you stay in the house until a later date (such as the youngest child finishing full time education. Sometimes a legal order may be put in place to allow one party to stay in the marital home for a certain timeframe.



Your Cash Savings, Other Investments and Direct Equities and Shares


Should you decide between yourselves how to split your wealth, then dividing your assets should be relatively simple.


For cash, you can just share between you and if anything is in your sole name, its easy enough to move over to your spouse. Be mindful of accounts paying you a higher rate of interest which might not be accessible immediately without losing interest.


There are also a number of other invested assets that you may hold such as: ISAs (both cash and stocks & shares), Unit trust and OEICs, direct equities / shares and Investment Bonds to name a few common ones). You may be able to divide these up between you, but some may need extra work ahead of selling and you may need the support of a financial planner to ensure this is done in the most appropriate way. They may actually have a different option for you to consider instead.


Your Pension


Pensions need to be included in this process and it may be that you lose some of your pension savings. Quite often this is the second largest asset behind the marital home, and this is also another area where seeking financial advice can be crucial as pensions can be extremely complex.


What happens to the ring?


Sometimes, the engagement ring can be an expensive asset and can cause division between parties as to what should happen to it. But it all depends on when the person received it.

Unless originally agreed, if it was given before marriage occurred, then it is technically considered a gift and does not need to be given back to the original purchaser or included as marital property.


If it was purchased after marriage (such as for a ring upgrade etc), then it forms part of the marital property and needs to be included in any calculations with regards to division of assets during divorce.


If this is you, then you may have strong feelings one way or another about what to do with it but working with your divorce team of specialists should help you make the best decision.


When things cannot be agreed amicably


Should you be unable to agree between yourselves how to divide your wealth then you may need to involve the courts. They will consider several factors before making their decision such as:


· Income and earning potential of each party

· Their individual expenditure needs and future obligations

· How much each party assists with the welfare of the family.

· Whether either of you have any physical or mental disabilities.

· The duration you were married and your age.


Do please remember that it’s not just about splitting your assets equally, often one spouse may have less opportunity going forwards for saving for their future life and therefore it may be considered that they need a larger share of the wealth now.


With any financial matters, seeking the help of a financial planner can make the process much less complicated and easier for you. Please do get in touch if I can help.