There are often many questions people may have if they are considering divorce. Here Anthony Jones looks at some of the most frequently asked questions, particularly around finances.
What grounds can be used for divorce?
The current law is based around a marriage having irretrievably broken down. One of 5 reasons must be cited for the breakdown, the most common which being ‘unreasonable behaviour’. From April 2022, the law is set to change in this regard, and a reason will no longer need to be cited. Whilst this is unlikely to change the outcome of divorces; as in the vast majority of cases, the reason for divorce will not have any impact on the outcome of the financial settlement or arrangements for children; it is hoped that it will make the overall process less acrimonious.
Will I need to sell my home?
When you divorce or end a civil partnership you and your ex-partner need to agree how to separate your finances. Any properties, whether owned jointly or in individual names, will be considered as part of this. To begin this process, an up-to-date valuation will be obtained for any property belonging to either partner.
Where the family home is concerned, there are usually three options – one spouse buys out the other spouse’s share of the property, the property is sold and the proceeds are divided, or the sale is deferred until a later date. The third option is often the chosen route where there are dependent children from the relationship. As the law in England and Wales prioritises the needs of dependants and tries to minimise disruption, a Mesher Order defers the sale of the family home until a later time, for example when the youngest child turns 18. Until this time, the partner who is the primary carer of the children usually remains in the house.
How would my business be treated on divorce?
Where a couple own a business on a 50/50 basis, a joint decision will have to be made regarding the future of the business. It would be very rare for a business to be forced to close, as this could result in the loss of livelihood for both parties.
In general, there are two potential outcomes; either one spouse will buy the other out or the couple decide to continue to work together.
Where a business or shares in a business are owned by one spouse and not the other, the timing of when the ownership commenced could play a role. If the business was owned before the parties began their relationship, it may be possible to ‘ring fence’ some or all of the value of the business/shares from division in divorce. When a business was formed or where ownership began during the course of the marriage, it will usually be treated as a shared asset for the purposes of divorce.
Are pensions considered as part of a divorce?
Pensions can often be amongst the most valuable assets a person owns. Despite this, they are not always taken into account during a financial settlement following divorce.
There are a number of ways of dealing with a pension on divorce. A pension sharing order allocates a percentage of one spouse’s pension to the other spouse and it is transferred into their ownership with immediate effect. Pension earmarking is another option; with a proportion of retirement benefits being paid to the other spouse from the point the pension is accessed. Recent guidance around pensions means that ‘offsetting’, where the value of a pension is offset against other assets, typically the family home, is now generally not a preferred route.
Dealing with pensions on divorce can be complicated but this doesn’t mean they should be overlooked. Our family law solicitors have a number of pension experts we are able to call upon to provide further guidance in this area.
Anthony Jones is a director at O’Donnell Solicitors. Contact Anthony on 01457 761670 or email at anthony@odonnellsolicitors.co.uk for a no obligation appointment.
