A Guide to Dividing Assets in Separation or Divorce
Dividing assets during a divorce can be one of the most challenging aspects of the process. Here’s a step-by-step guide to help you navigate this critical stage fairly and efficiently.
Step 1: Understand What Counts as “Assets”
Before dividing anything, it’s essential to know what’s included in the “matrimonial pot.” Common assets include:
- The family home and any other properties.
- Savings, investments, and pensions.
- Vehicles, furniture, and valuable personal items.
- Joint business interests.
- Debts and liabilities, which also need to be considered.
Remember, in many cases, assets acquired during the marriage are considered jointly owned, regardless of whose name they’re under.
Step 2: Gather Financial Information
Both parties must provide full financial disclosure to ensure transparency. This means sharing details of:
- Bank accounts and savings.
- Mortgage balances.
- Loan agreements and credit card debts.
- Pension valuations.
- Business assets and liabilities.
Organizing this information will help you build a clear picture of your financial situation.
Step 3: Consider Needs and Contributions
Fair division doesn’t always mean a 50/50 split. Instead, courts and mediators will consider:
- Needs: What do you and your ex-partner need to maintain stability? For example, who will house the children?
- Contributions: This includes financial contributions, such as income, and non-financial ones, like childcare and homemaking.
- Future Earning Potential: If one party has limited income opportunities, this may be taken into account.
Step 4: Explore Your Options Together
During mediation or negotiations, consider how to split assets creatively and practically. Common approaches include:
- Selling and Dividing Proceeds: Selling shared assets, like the family home, and splitting the proceeds equally or proportionally.
- Offsetting: One party keeps a specific asset (e.g., the house) while the other receives a greater share of other assets (e.g., pensions or savings).
- Co-Ownership: Agreeing to retain joint ownership temporarily, especially for assets like the family home, until circumstances change (e.g., children grow up).
Step 5: Seek Professional Guidance
While mediation helps reach amicable agreements, you may also need:
- Legal Advice: A solicitor can ensure agreements are legally sound and offer guidance on complex issues.
- Financial Advice: Understanding the value of assets like pensions or investments may require specialist advice.
- You can find out more information and get some neutral guidance from the free downloadable brochure from Advice Now https://www.advicenow.org.uk/guides/sorting-out-your-finances-when-you-get-divorced
Professionals can also help you draft a consent order to make agreements legally binding, or you can decide to draft this yourself. We always suggest you obtain independent legal advice about any proposals that you reach in mediation before going ahead with a consent order application.
Step 6: Prioritise Children’s Needs
If you have children, their well-being should guide your decisions. Consider:
- Keeping them in the family home if possible.
- Ensuring financial stability for their education, health, and daily needs.
Agreements that prioritize children are more likely to be seen as fair by both parties and the court.
Step 7: Be Prepared to Compromise
Fair division often requires compromise. Focus on long-term stability and practicality rather than emotional attachment to specific assets. An agreement that feels fair to both parties is more likely to succeed.
Step 8: Finalise the Agreement
Once you’ve agreed on how to divide assets, it’s essential to formalize the arrangement. This can involve:
- Consent Orders: Legally binding agreements approved by a court.
- Deed of Separation: For couples not yet divorcing, this outlines interim agreements.
Finalizing ensures clarity and prevents future disputes.
Conclusion
Dividing assets during a divorce is a complex but manageable process with the right approach. By focusing on transparency, fairness, and the long-term needs of both parties (and any children), you can reach a resolution that works for everyone.
If you’re navigating this process, consider seeking mediation to help you and your ex-partner negotiate an agreement in a supportive, constructive environment. Mediation offers a faster, more affordable, and less stressful alternative to court proceedings.
For more guidance or to start mediation, contact us to book your initial appointment with a qualified family mediator today.
