While we’d all love to believe in happily ever after, statistics show that a high percentage of marriages and civil partnerships will end in divorce. That’s not even counting the number of cohabiting couples who also split up.
The emotional impact of a relationship breakdown is difficult enough to deal with. Even where the split is mutual and amicable, there will inevitably be some major changes involved, such as potentially moving out of the home that you shared, agreeing custody of any children, and dividing up your finances. This includes deciding how you’re going to divide up any pensions, savings and investments as well as property.
As far as English Family Law is concerned, the principle is a 50-50 split of assets in accordance with the Matrimonial Causes Act 1973 – but this is just the starting point. In fact, there’s no set formula when calculating financial settlements, and they can vary significantly depending on the specific circumstances of each case.
Neither does it automatically follow that the higher earning partner will get the lion’s share of the financial settlement. In reality the courts have wide discretion on how to divide assets in a way that achieves a fair outcome for all parties.
What are you entitled to?
The court must consider several factors, including the income and financial needs of each party, the family’s standard of living before the relationship began to collapse, and whether there are any children. In terms of income, if either party has a high earning potential for the foreseeable future, then this will be an important consideration. Property and other financial assets are also included in the calculation.
The law also applies to civil partnerships, which have the same rights as married couples when it comes to divorce matters – if they have been in the partnership for a year or more.
Cohabiting couples that separate: No such thing as “Common Law Marriage”
If you are cohabiting things may not be as straightforward. Even though it’s common to live together and not get married these days, there is a lot of misconception over financial rights when cohabiting.
For example, there is no such thing as “Common Law Marriage” – that is a myth. It categorically isn’t the case that couples who cohabit automatically have the same legal and financial rights as those in a marriage or civil partnership, unless you have outlined your wishes in a formal cohabitation agreement.
Before you do anything, you should take legal advice. You can find out more about reaching a financial agreement after divorce or separation at www.gov.uk/money-property-when-relationship-ends.
Disclaimer: This article is for informational purposes only. You should not construe any such information or other material as legal, tax, investment, financial, or other advice. You should consult an Independent Financial Advisor for more information.
About the Author: Helen Say is a freelance copywriter and blogger www.cblservices.co.uk
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