When a married couple separate or divorce they often need to divide up their assets and deal with any liabilities so that they can both move forward. The law considers marriage a partnership and if a couple resort to the courts, the courts will take into account all assets the couple possess, whether together or separately. Below is a summary of the ‘section 25 factors’ which are enshrined in the Matrimonial Causes Act. In particular the court will consider:
1. The income, earning capacity, property and other financial resources which each of them has or is likely to have in the foreseeable future
2. The financial needs, obligations and responsibilities which each of the parties to the marriage has or is likely to have in the foreseeable future
3. The standard of living enjoyed by the family before the breakdown of the marriage
4. The age of each party to the marriage and the duration of the marriage
5. Any physical or mental disability of either of the parties the marriage
6. The contribution which each of the couple has made or is likely to make to the welfare of the family and this includes looking after the home or caring for the family
7. In extreme cases, the conduct of either spouse
8. The value of any benefit which will be lost on divorce, for instance pension rights.
It is better both financially and emotionally for couples to negotiate if at all possible either between themselves or through mediation rather than resorting to the courts, and the above factors can be taken into account in the negotiations. Together a couple can decide which factors are most important to them in order to achieve a realistic settlement rather than leaving it to the court to decide on an arrangement which may be less attractive to both parties. But the court is always a last resort.
From a legal point of view the situation for unmarried couples separating is very different in terms of division of assets.
The law focuses on property rights, rather than taking into account the above factors to help achieve a fair and realistic settlement.
For unmarried couples it is sometimes possible for an individual to argue that they made a contribution to an asset not in joint names. They can go to court to try and prove it but litigation can be very expensive, can take a long time and the outcome can be very uncertain.
For an unmarried couple mediation can be very beneficial because there they can consider whether they have they to all intents and purposes lived together as if they were married. If the answer to this is 'yes' then it is perfectly possible to negotiate a settlement together which to them seems realistic and fair, taking into account some of the above factors rather than just looking at property rights.
If a couple has children, and both parents are really putting the interests of the children first, they will want to find a fair financial outcome that everyone can live with and will want to maintain a reasonable relationship where they can continue to communicate as parents. Simply dividing up finances looking at the law and property rights may make this hard to achieve. Where there are children often one partner’s earning power is greater than the other but the law as it stands would not take this into account for an unmarried couple. Justice, it seems, is not always fair.
Frances Place is a qualified solicitor and partner in a family mediation service.