In This Post

This is the most complete online guide you'll find to divorce settlements.

So, If you want to:

  • Discover how to get the BEST possible settlement in your divorce.
  • Find out what happens to assets like your pensions and your home.
  • Understand how the divorce settlement process works.

Then you’ll love the detailed strategies in this guide.

Let’s dive right in.

Chapter 1.

<chaptertitleh2>What Is A Divorce Settlement?<chaptertitleh2>

In this chapter I’m going to walk you through the basics of a divorce settlement.


  • What a divorce settlement is.
  • How it differs from your formal divorce process.
  • Why it’s often the most important part of your divorce.

The Divorce Process vs The Divorce Settlement

The first thing to understand is that there are two distinct elements to every divorce:

1. The formal <bloglink>divorce process<bloglink>


2. The divorce settlement 

The Formal Divorce Process

This is where you take the official steps needed to become legally divorced. 

If your divorce is uncontested (the <bloglink>vast majority<bloglink> are), then getting your formal divorce is a largely administrative process.

It's a matter of:

  • Submitting the right paperwork to the courts, and;
  • Paying the court fee

In fact, it’s so straightforward you can now <bloglink>do-it-yourself online<bloglink> without needing a lawyer. 

The 5 key steps of divorce:

A flowchart showing the divorce process timeline

Once all the steps are complete the court will declare you legally divorced.

However, bear in mind that the process will take at least <bloglink> 6 months.<bloglink>

The Divorce Settlement

The divorce settlement is the bigger, more complicated part of most divorces.


It’s where couples often start to fight over money.

Poster from the movie the break up

You see, the formal divorce process only separates you legally from your partner. 

It does NOTHING to sort out the finances between the two of you. 

And people’s finances can become devilishly intertwined during marriage.

This is why you need a divorce settlement, which allows you to:

  • Figure out who should get what from the family finances, and;
  • Make that agreement legally binding.
Infographic comparing the divorce process and the divorce settlement

If your relationship remains good, or your finances are straightforward, you may be able to agree relatively easily. 

But if your finances are more complex, or you can’t see eye to eye, or there are acrimonious <bloglink>reasons for your divorce<bloglink>, you may need help from a lawyer, a mediator, or the courts. 

This is often the case where:

  • One of you is in a financially weaker position, for example you gave up a career to raise children.
  • You can’t agree on what should be done with the family home, or the mortgage.
  • You have more complex finances to divide, such as shares, trusts, pension funds, business interests or inheritances.
  • You don’t know how to divide any joint debts you have.
  • You suspect your spouse may be lying about their true financial position.
  • You disagree over who should pay for, or have custody of, any children.
  • There are any issues of domestic violence or child abuse.
  • Your partner is being difficult, or you’re simply finding the process too complicated.

Whether you’re using a lawyer, or doing it yourself, the divorce settlement can usually be completed at the same time as the formal divorce process.

Chapter 2.

<chaptertitleh4>What Assets Do You Own?<chaptertitleh4>

The first step to getting a fair divorce settlement is figuring out what the marital assets are. 

In this chapter I’m going to show you:

  • The difference between marital and non-marital assets (and why it matters).
  • How to easily record all your assets.
  • How to calculate your net worth.

Let’s go through the process, step by step.

What Are Marital Assets?

Your assets are everything you and your partner owned or accumulated during the marriage. 

It’s things like:

  • The family home, 
  • Cars, 
  • Savings, 
  • Investments. 

After you’ve added up all your assets, you then deduct any debts, such as mortgages, <bloglink>car loans<bloglink> and credit cards.

What’s left in the ‘pot’ makes up the marital assets, and is split between you and your partner.

Infographic showing marital assets minus  marital debts. The Divorce Settlement

There are two ways in which you can decide on the split:

1. You can agree between yourselves (either on your own or via a mediator)


2. You can ask a judge to decide for you.

We’ll talk about the pros and cons of each of these approaches in chapter 4.

But before we get to that, we first need to figure out what your marital assets are. Frankly, it can be a real pain digging through your entire family finances.

But don’t worry, 

I’m going to guide you through the whole process.

What Are Non-Marital Assets?

This is super important, because in a divorce only marital assets are shared, while non-marital assets are ring-fenced.

A marital asset is anything acquired during the marriage (ie. before your <bloglink>decree nisi and decree absolute<bloglink> are granted), regardless of which partner paid for it, or who’s name it’s in.

Think of your marriage as a window in time: Everything acquired inside that window is classed as a marital asset.

An infographic showing the difference between marital assets and non marital assets, The Divorce Settlement

Non-marital assets are assets which are acquired outside the marriage window, and are kept by the partner that owns them.  

However, sometimes the court can declare that a non-marital asset has BECOME a marital asset if they think it has been ‘intermingled’ with the family finances during the marriage.

An abstract image of a blue swirl
"Mixing" assets during the marriage can blur the lines between marital and non-marital assets.

For example, say one of you <bloglink>gained an inheritance<bloglink> before you married.

This would normally be considered a non-marital asset.

But, if part of that inheritance was used to pay for the family home, or to fund your married lifestyles, the court may consider it has now been ‘intermingled’ with the family finances, and should be shared.  

This is why it’s so important to record everything you AND your partner own, so that the judge can decide which are marital assets, and which are not. 

And I’m going to show you how to do just that in the next section

Recording Your Assets - Step by Step

Before the judge will agree to your divorce settlement, they’ll ask you and your partner to both fill out an official court document called the <bloglink>'Form E'<bloglink>

It can be a pretty long and painful document to complete.

But it’s essential, and I’m going to help you.  

The <bloglink>Form E records<bloglink> all your:

  • Assets,
  • Debts,
  • And living expenses.

The court will use it as the cornerstone for approving your divorce settlement. 

The Form E:
The Form E Financial Satement

The Form E isn’t actually submitted until after the formal divorce process has begun.

BUT, it's a good idea to start recording your financial details on a spreadsheet as soon as possible.

It’s easier to keep track of things that way.

And when the time comes to complete the Form E, it’s a simple case of copying the information across. 

Your spreadsheet doesn’t have to be completed all in one go- people often remember to add things later down the line. 

But the earlier you start, the better.

You can grab my <bloglink>spreadsheet here.<bloglink>

Screenshot of the divorce calculator spreadsheet
You can use my free spreadsheet to start recording your assets.

My spreadsheet walks you through the process of recording all your assets and debts, and then calculating the marital assets ‘pot’.

Once you have all this information you’ll be in a MUCH better position to start negotiations with your partner.

And, when the time comes, it will make completing your Form E super easy.

Remember to keep a record of:

  • All your joint assets,
  • Any assets solely in your name,
  • AND any assets solely in your partner’s name.

This way, if your partner fails to disclose any assets on their Form E, you’ll be able to raise it with the judge. 

(sadly, hiding of assets is all too common, as you'll discover in Chapter 6).

Types Of Marital Asset

In the table below I’ve listed out some of the most common types of asset you should include on your spreadsheet / Form E. Most people won’t own all these different types of assets, so once you’ve covered the ones that you do own, you can simply skip on to the next section.

1. Property & Land

The family home is usually the largest asset. You can arrange a free valuation from a lot of online sites, such as Zoopla.

Once you have a valuation, you then deduct any outstanding mortgage balance (check your statement, or call your bank). The remaining figure is the equity you have in your property, and is the value of that marital asset.

Do the same process for any other property or land that either of you own. If any property is rented out, also record the monthly income, as that can be considered a marital asset too.

2. Bank Accounts & Savings

You want to take a record of all bank or savings account balances that are in your sole name, and any joint accounts you have with your partner.

Obviously your day to day current account balance will fluctuate, and you’ll update this closer to the final settlement. But for now, just take a note of any positive bank balances.

If you know that your partner has other accounts in their sole name, make a record of that too, including any substantial balances you’re aware of.

3. Income

Make a record of your employment income. You’ll find this on your latest P60.

If you’ve lost it, ask your employer for a replacement.  Also make a record of any overtime, bonuses or perks you get, such as a company car or travel allowance. 

If you’re self employed, record exactly the same details, but your income will be your share of the business profits. 

Again, if you know it, take down a record of your partner's earnings and allowances too.

4. Investments

For most investments, like shares, the current market value will suffice. But if you have more complex assets (like stock options of futures), you may need to get them valued by a financial advisor.

  • Stocks and shares
  • Bonds
  • Mutual funds
  • Options and dividends

If you or your partner own any kind of investment assets, take a record of the current value. This includes thing like:

5. Goods

List any individual items worth more than £500, such as cars, caravans, ornaments, furniture, computers etc. For most goods you can simply estimate their current value, and you can get free online vehicle valuations.

But if you have high value items such as art collections or expensive jewelry, you may want to consider arranging an independent valuation.

Be aware, a court is not going to allocate every single item (husband gets TV, wife gets laptop etc). Instead they’ll just consider the overall value of the goods as part of the settlement.

6. Pensions

There are two things to understand here:

1. Pensions can be divided on divorce

2. Sharing of pensions can get really complex

But your pensions are usually the biggest asset after the house, so it can’t be ignored. You’ll need to take a record of any pensions you and your partner have, and then get a statement of the current value for each pension. I’ll show you how to do all this in my separate post on pensions.

Top Tip:

As you are completing your spreadsheet have a folder where you keep copies of your P60, mortgage statement, bank statements etc.

For recurring payments, like your wages, try to keep a copy of your three most recent statements.

An icon of a lightbulb

Marital Debts

Once you’ve figured out all your assets, you then need to consider what debts you and your partner have, such as:

  • Outstanding mortgages (on your main home, or any other properties)
  • Any bank loans or overdrafts 
  • Any outstanding credit card or store card balances
  • Vehicle loans 
  • Any taxes you owe

This is important because the court will deduct any marital debts before they calculate the overall value of the settlement ‘pot’ .

Now, there’s a couple of things to remember here:


Marital debts are treated in a similar way to marital assets. Ie, if the debt was used to support the marriage (for example for home improvements or a family holiday), then the court will treat it as a joint debt, regardless of who actually took out the loan.

Only if the debt was clearly used for the benefit of just one partner will the court then exclude it from the divorce settlement (for example if it was used to pay for a bad habit like gambling). 

And just like marital assets, any debts accrued before or after the marriage will tend to be ignored by the courts.


Just because the court decides that the debt should be taken into account when deciding the divorce settlement - This does not change who is legally responsible for repaying the loan.

It just means the court might award a bit more in the settlement, to compensate a partner who took on debt for the benefit of the whole family.


Don’t suddenly stop paying your loan instalments just because the court considers it a joint debt!

Image of a person making an online payment with their credit card

Chapter 3.

<chaptertitleh4>Should You Go To Court?<chaptertitleh4>

In this chapter we’re going to discuss what your options are for reaching a settlement.


  • Should you go to court?
  • What are the alternatives to going to court?
  • What are the pros and cons of going to court?

Let’s dive in.

Should You Go To Divorce Court Or Not?

There are two ways you can sort out your divorce settlement:

  1. By negotiating and agreeing between yourselves

  2. By going to court and asking a judge to decide 

There are advantages and disadvantages of each approach.

Let’s check them out:

Avoiding Court

Often people think going to court is the only way to get a fair divorce settlement; but these days any of the following negotiation options can help you save the emotional and financial <bloglink>cost of going to court<bloglink>.

<ulheading>Solo Negotiations<ulheading>

If you and your partner are on good terms and see eye to eye, you can simply agree who gets what between yourselves. This is likely the quickest and cheapest way to decide your divorce settlement. However, you’ll still need a lawyer to draw up the final agreement if you want it to be legally binding, and, without having any legal advice during the negotiations, there’s a risk you don’t fully understand what you are entitled to and end up getting an unfair deal.


Mediation is where you <bloglink>ask a qualified mediator<bloglink> to help you and your partner decide on the settlement. They do not decide for you. Ultimately, you and your partner have to agree. But having a qualified and independent mediator can really help couples come to agreement, and ensure both sides get a fair deal. There is another method called ‘collaborative law’ where, instead of a mediator, you both have your own lawyer who help you negotiate the settlement.


Arbitration is like an informal court. Here, you hire a qualified third party who acts like a judge, and decides the case for you. The main difference to mediation is that arbitration guarantees a final decision by the arbitrator.

Image of a conference room
Negotiations are held outside of Court, usually at a neutral venue such as the Solicitor's office.

Top Tip:

Remember, if you do manage to negotiate a settlement, and you want it to be legally binding, you'll still need to send the agreement to the Court to have it validated by aConsent Order.

An icon of a lightbulb


So those are the main options to avoid court. Now let’s see what happens if you do go to court.

Going To Court

The court divorce process generally consists of three hearings, with the aim of;

1. Deciding what assets, income, liabilities and needs each of you has,


2. Dividing those assets and liabilities between you fairly.

<ulheading>Form A<ulheading>

The first step in going to court is submitting the <bloglink>Form A.<bloglink> This formally kickstarts the court process, and after it's submitted the timetable for the first hearing will be set.

But before you even get near to a courtroom, the court will first expect you to consider attending something called a "MIAM".

<ulheading>The Mediation Information and Assessment Meeting  (“MIAM”)<ulheading>

Before hearing your case, the Court will want to know that you’ve at least considered mediation. If you have already tried mediation and it has failed, that will suffice. But if you haven’t, you will be expected to <bloglink>attend a MIAM session<bloglink> to see if mediation could work for you. There are a few circumstances where this step is not required (mainly involving domestic abuse), but otherwise it’s mandatory. If, after the MIAM, you decide mediation won’t work for you, the next step is to start formal court proceedings.

The Form A MIAM declaration
The Form A will ask you to confirm you have considered attending a MIAM.

<ulheading>Form E<ulheading>

As we discussed in Chapter 2 you’ll both also need to complete and submit the Form E, giving your financial disclosure.

The Hearings

<ulheading>The First Directions Appointment (FDA)<ulheading>

The first hearing is the “First Directions Appointment” (FDA), and is usually held at least 4 weeks after the Form A has been submitted. It’s basically an administrative hearing to review all the information and documents, to make sure everything is in order, and to set a timetable for the remainder of the case. Usually no major decisions are made at this stage.

<ulheading>The Financial Dispute Resolution Hearing (FDR)<ulheading>

The second hearing is the “Financial Dispute Resolution” Hearing (FDR), and is often 3 or 4 months after the First Direction Appointment.

The FDR is kind of like a mediation appointment, but at court. A judge will look at all the documentary evidence, will hear arguments from either partner’s lawyer, and will consider any settlement offers either of you have made.

The judge will then try to help you reach agreement by dispelling any unrealistic expectations either of you may have, and by indicating what the most likely outcome would be at a full trial. In essence, the judge will say something like “I think Mrs A would get £X, and Mr A would pay £X in maintenance payments for £X years”

At this stage, many couples are able to reach an agreement, and the court approves it, thereby concluding the case.  

But if you don’t agree, the court can’t force a settlement on you at this stage. Instead, the case will be listed for a full trial, often 6 to 12 months later.

<ulheading>The Trial<ulheading>

The third and final hearing is the trial itself. This will be a full formal hearing before a single judge. You and your partner will both give live evidence, including being cross-examined by the other side’s lawyer. At the end of the trial judgement will be given determining the final financial settlement.

The court can make a number of different orders, including awarding a lump-sum or ordering regular maintenance payments.

So, now you've had a brief overview of the out-of-court settlement options, and of the court process itself.

Let’s recap by looking at the advantages and disadvantages of each approach:

Avoiding Court

Going to Court


Almost invariably, you’ll save money by avoiding court.


Going to court is usually the most expensive option.


Out of court settlements are usually many months quicker than going to court.


Going through the full court process can easily take 12 months or more.


Out of court settlement allows the parties, not the court, to make decisions affecting their future. You decide timings and appointments, unlike at court where you are just one case in a queue of many.


The court manages the process and sets the timeline.


Everyone has to agree to the process and outcome. No-one can force a decision on the other side.


The court has the power to force either party to come to court, and can enforce financial disclosure.


The process is less formal than court, so you may feel more comfortable and confident.


The process is very formal, and can be intimidating. However, it maintains distance between the parties which can help if relations between you are very bad, or if there have been issues like domestic abuse.


Out of court settlement is private and confidential.


At court trials are open to the public, as are all the papers and documents filed with the court.

Chapter 4.

<chaptertitleh4>How Is The Settlement Determined?<chaptertitleh4>

In Chapter 2 you discovered what the marital assets are, the next step is to understand how they will be shared.

In this chapter you’ll discover:

  • How does the court decide on a fair settlement?
  • Does the conduct of the parties (such as cheating) matter?
  • How do any children affect the settlement?

And more…

Let’s get started.

Dividing Assets

When it comes to dividing your assets, the courts have a VERY wide discretion.

There are guidelines and principles they follow, but no real hard and fast rules. The upside of this approach is that it allows them to remain flexible and to be sensitive to the unique circumstances of your case.

But the downside is that it makes it hard for your lawyer to predict what the court will do! The key point to understand is that the court’s overriding objective is to achieve fairness.

Now, fairness does not necessarily mean equal.

Think about it - If you worked 20 hours and your colleague worked 10, but your boss paid you equally, you wouldn’t say that was fair.

To achieve fairness, sometimes an unequal outcome is required. What the court tends to do is take a 50/50 split as the starting point. They’ll then consider all the unique factors of your marriage, and will make adjustments from that 50/50 starting point to achieve what they think is a fair outcome.

To do this, they use the Matrimonial Causes Act 1973.

Emoji of a hand pointing down

The Matrimonial Causes Act 1973

This is the main piece of divorce law in the UK.

It lays out the relevant grounds for getting divorced, and the various orders the court can make.

And, at <bloglink>section 25 of the Matrimonial Causes Act<bloglink>, it lists the main factors the court will take into account when deciding on your divorce settlement. Section 25 is basically a checklist (think broad guidelines, not strict rules).  However these are not the only factors the court can consider- the judge will always try to look at your case in the round. 

That being said, let's take a look at the section 25 factors.

1. The welfare of any children

The first of the factors is the welfare of any children. This means any dependent child under the age of 18, including any step-children. The welfare of the children is known as “the first consideration”. This means it is the most important factor, and it pretty much trumps everything else. The court will want to make sure any children have proper accommodation and sufficient funding to support their lifestyle until adulthood, and if this means using most of the marital assets, so be it. 

This is why there is sometimes a misplaced belief that the divorce courts favour the wife in settlements....

They don’t.

The simple reality is that in the majority of cases the mother takes custody of the children. And this means she’ll often be awarded a disproportionate share of the divorce settlement, and will often get <bloglink>rights to the family home<bloglink> so that the children can be housed. Not all cases are the same (plenty of fathers fight for custody rights these days)- but overall, this is a very common scenario.

Image of a young boy playing alone

2. The needs of the parties

After any children are provided for, the needs of each partner is the next most important factor. ‘Needs’ includes common expenses like housing, and an adequate income both now and in the future. The court will calculate how much you both need to live on, and will then divide the assets accordingly. However, the simple truth is that it’s just more expensive to run two households instead of one, and a common issue is that there just isn’t enough money to go around. 

These types of case are often referred to as ‘needs based cases’ and, sadly, the majority of divorces fall into this category. This is the only situation where the court can dip into any non-matrimonial assets (remember, that means any assets acquired before or after the marriage). If the court looks at each party’s basic living costs, and realises one of you will be left short, they can order the other party to share any non-matrimonial assets they may have, so that the basic needs of each side are met.

So you can see why it’s important to take an accurate record, not only of all your assets, but also all of your costs. You want to give the court the most accurate picture of what your living expenses are, so that they can make sure you’re adequately provided for. My <bloglink>spreadsheet<bloglink> also has a budget tab where you can make a record of all your costs. If there are more than enough assets to meet each of your needs, then the court will turn to the other section 25 factors to decide how the excess should be split.

3. The income of the parties

The court will look at how much each of you earns now, and how it might change in the future (such as increases, like a promotion or bonus, or a reduction in income, like retirement).  If either of you isn’t currently working, the court will expect you to go back to work if you can. They are likely to allocate you a hypothetical income, equivalent to what they think you would earn if you were working. 

This is also where the court will also take into account any other assets that could produce an income, like share dividends, rental income, or business profits.  

Be aware, if either of you is living with a new partner, the court can take that new partner’s income into account. So if one of you doesn’t work, but has recently moved in with a millionaire, it’s unlikely the court will treat you as having no income. Assessing your incomes is an example where the court will start to adjust from the 50/50 starting point. Ie. If one of you earns three times what the other does, the court will likely award the poorer party a bigger share of the divorce settlement to offset this imbalance.

Image of a calculator

4. The standard of living

The courts will look at the standard of living enjoyed by the family prior to the divorce. Your ‘standard of living’ is things like:

  • How much you had to spend each month
  • The type of cars you drove, and holidays you took
  • How often you went to restaurants, and what type
  • Whether your kids went to an expensive school

The reality is that, after a divorce, both of your standards of living are likely to take a hit. What the courts will try to avoid is one side suffering a much bigger decline in their lifestyle than the other.

5. The age of the parties and duration of the marriage

In simple terms, the younger the parties and the shorter the marriage, the more likely the court is to try to make a ‘clean break’ by returning each of you to the financial position you had before entering the marriage.

If you are both older or have been together for a long time, things will be less straight-forward. The older you are, the less time you have to build up your finances, and the harder it is to get a mortgage. So the court may order the lower earning party to receive a bigger share of the divorce settlement to compensate for this.

If you lived together before the marriage, this period of time can be included as part of the marriage period. On the other hand, if you are living apart and are estranged for a long time before actually getting divorced, the court may exclude this period when calculating the marriage length.

6. Any physical or mental disability

If either of you has a physical or mental disability that impacts your earning capacity, the court may award them a larger part of the settlement or maintenance payments. The court will need to see medical evidence of any disability.

7. The contributions to the marriage

The courts consider your contributions to the marriage to be equal. This means that staying home to raise children is considered to be just as important as being the main breadwinner. They also won’t make any distinction if one of you happens to earn more than the other.

Regardless of what you earn, the starting point is still a 50/50 split.

Very rarely, the court can award a larger part of the settlement in recognition of a “special contribution” made by one party.

However, this is exceptionally rare.

Just consider the case of Work v Gray, where the husband claimed he earned more than £7 billion for his hedge fund, and so should get a larger share of the £180 million in marital assets.

The court still decided that this wasn’t enough to justify departing from an even split because, while the numbers were very large, he had done nothing exceptional that other members of his firm weren’t capable of.

An executive corner office overlooking New York

8. The value of any benefit lost through divorce

This factor usually comes into play when <bloglink>pensions<bloglink> are involved. For example, if one of you would have had an entitlement to part of your partner’s <bloglink>pension<bloglink>, and that right has now been lost due to the divorce, then the court can take that into account when dividing the assets.

9. The conduct of the parties

Ok- so this question comes up a lot.

People tend to expect that if one side cheated or behaved badly during the marriage, then the court will take this into account.

However, rightly or wrongly, this is generally not the case.

The courts take the view that bad behaviour like adultery is part of the reason people get divorced in the first place, and is not significant enough in itself to deny one party their fair share of the financial assets.

Only if the behaviour is really bad (like child abuse or domestic violence), will the court consider changing the divorce settlement.

Sometimes the court will also consider financial misconduct, such as one party hiding or stealing money from the other.

Be aware though that arguing about misconduct in the marriage can add quite a lot to your <bloglink>legal costs<bloglink>, as it complicates the case. You should discuss with your lawyer the likelihood of a misconduct argument succeeding, and whether the additional legal costs will be made up for by any higher settlement award.

A couple having an argument

Chapter 5.

<chaptertitleh4>What Happens To The Marital Home?<chaptertitleh4>

9 times out of 10 the marital home is the biggest shared asset in a divorce. 

That’s why it deserves its own chapter, to consider some of the key issues.

In this chapter we’ll discuss:

  • Does it matter who legally owns the home?
  • What are the different ways you can split the property?
  • How can you use your home to help secure divorce funding?

Let's begin...

Who Owns The Marital Home?

If you own the house jointly (ie. both names are on the title deeds) then things are pretty straight forward-  You are both legal owners and have rights to the property.

But what if only ONE of you is named as the legal owner?

Well, as you’ve probably figured out by now, the courts don’t draw such fine distinctions when it comes to the marital assets.

“the matrimonial home, even if brought into the marriage by one party at the outset of the marriage, plays a central part in the marriage and so should normally be treated as matrimonial property”

<quotesub>Lord Nicholls in Miller v Miller, McFarlane v McFarlane 2006<quotesub>


If the property IS OR WAS lived in by you as the family home, then you have home rights and will get a share of it on divorce (even if you’re not you’re registered on the title deeds).

Top Tip:

If you’re not the legal owner, and are worried your partner may try to sell the property or evict you before the case gets to court, you can prevent this until the divorce settlement is finalised by registering your home rights.

An icon of a lightbulb

How Can The House Be Divided?

Let's have a look at the 4 main ways that the marital home can be divided:

Sell and Split

This option does what it says on the tin- You sell the property and the cash is split between you. This is by far the most common outcome, as most couples:

1) Want to move on after a divorce.

2) Recognise that, as a single income household, they need to downsize.

Buying Out

Here, the departing partner simply gets a cash payment to compensate them for their share of the property. 9 times out of 10 the remaining partner funds this by remortgaging.

“Buying out” is a common solution where the custodial parent wants to stay in the family home; often to keep hold of a good school place or provide stability for the children.

Transfer Value

Here, the departing partner transfers their legal ownership of the property to the other partner. This can be done in two ways:

1) The departing partner surrenders their share of the property; usually in return for getting a bigger share the divorce settlement (such as pensions or cash savings).

2) The departing partner transfers their legal ownership, but retains a financial interest (their lawyer does this by registering a charge). Then, when the property is eventually sold, they are entitled to their share of the sale price (this is a bit like a delayed “Buy out”, and is useful if you don’t want to sell straight away).

Leave Ownership Unchanged

One of you simply moves out, but you continue to jointly own the property. This is common where the court has ordered a delayed sale, via a ‘Mescher’ Order or a ‘Martin’ Order

Let’s check out what these two orders mean, below...

Mesher And Martin Orders

Mescher and Martin Orders (both named after real-world cases) are two ways the court can protect the interests of children or a less well off spouse when it comes to the marital home.

They come into play when the court decides that, if the house were sold, there wouldn’t be enough money left over for one of the parties to re-home themselves adequately.

So, what’s the difference between the two?

Mesher Orders

These apply when there are children under 18 living in the home. It’s basically an order delaying the sale of the property, usually until the youngest child turns 18. 

The property will remain in both party’s names, but the custodial parent will be allowed to live there with the children for the duration of the order.

Martin Orders

A Martin Order also delays the sale of the home, but this time it's nothing to do with children. A Martin order is made where the departing partner is wealthy and does not immediately need access to the property capital, but the remaining partner would be unable to afford a new home should they be forced to move out. They are often ordered until re-marriage or death of the remaining partner.

Property Adjustment Orders

In addition to Mescher and Martin Orders, the court can make a general property adjustment order. The court has a LOT of powers to vary property rights, and can basically do what it sees fit in order to reach a fair divorce settlement. This can include transferring legal ownership from one partner to the other, changing the equity split, and postponing or <bloglink>ordering the property’s sale.<bloglink>

What Happens To The Mortgage?

Ok, first things first.

Just like any other joint debt, your responsibility for the mortgage doesn’t stop just because you’re divorcing.

So, even if you move out, DON’T just walk away and suddenly stop paying your share!

Homer hides in a hedge GIF

It can seriously damage your credit score, and if the house is repossessed by the lender you’ll end up with a lot less to share when it comes to the divorce settlement.

First step: Contact your bank.

As soon as you know that one of you will be moving out, call your bank. They are often sympathetic and should try to help accommodate your circumstances by offering you a payment holiday if you need it.

You’ll then need to decide what your long term plans are. If you know you are going to sell the property relatively soon, then you should be able to pay off the mortgage after the sale and go your separate ways.

But if one of you is staying in the property longer term the other partner may want to consider being released from the mortgage (usually by buying the other partner out).  

The advantages of this are:

  1. Removing your name from the mortgage frees up more of your credit score, allowing you to take out your own mortgage.
  2. Removing your name from the mortgage will be necessary if you want to <bloglink>break the link<bloglink> between you and your partner’s credit scores.

You should also ensure you don't breach any previous court orders that affect the property, such as an <bloglink>occupation order.<bloglink>

Your House Could Be Your Best Funding Asset

The <bloglink>marital home<bloglink> is usually the biggest asset to be shared in a divorce settlement. But many people don’t realise it can also be used as an asset to help secure funding for their divorce lawyer. If you have reasonable equity in your home, it’s possible you might be eligible for a legal funding loan.

Specialist funding is rapidly becoming one of the most convenient and cost-effective ways to fund your divorce.

This specialist funding can help you pay for:

  • Mediations session
  • Solicitor led negotiations
  • Going to divorce court
  • And more...

Check out my guide divorce funding page to learn more…

Chapter 6.

<chaptertitleh4>Bad Behaviour And Hiding Assets<chaptertitleh4>

Going through a divorce is often one of the most high stakes financial events in a person's life.

This means, sometimes, the temptation to cheat is just too strong.

There are two key ways people try to avoid paying their fair share during a divorce:

  1. Not declaring or hiding their assets.
  2. Dissipating (getting rid of) assets prior to the divorce.

Let's take a look at how you can identify and combat these tactics...

The Duty Of Disclosure

Remember the Form E we discussed earlier?

That long and complex document you both need to fill out detailing all your finances?

Well, here’s what it says right on the first page:

The fraud warning on the first page of the Form E

Pretty serious stuff.

Both you and your partner have a legal duty to make “FULL and FRANK and CLEAR disclosure of your finances”

This is not a request.

It’s a legal duty.

And there are consequences if a person is found to have breached that duty.

What Are The Penalties For Non-Disclosure?

The court can impose some pretty severe penalties if they discover a party has been hiding any of their assets.

This can include ordering that the at-fault party pays some or all of the other side’s legal costs, and/or gets a smaller share of the divorce settlement.

If the non-disclosure is very serious, the at-fault party could ultimately face criminal charges for misleading the court, leading to large fines or even imprisonment.

Despite these risks, it’s still quite common for hiding of assets to occur (usually by the wealthier partner).

So how do they do it?

What Are The Common Ways People Hide Their Assets?

Some of the most common ways people try to minimise the divorce settlement include:

Not disclosing bank accounts

This can be a failure to disclose any bank account, but is increasingly common with Paypal or cryptocurrency accounts, where the partner transfers money there and hides it until after the divorce.

Generating debts that don’t exist

This can be common where the non-disclosing partner has a business, and generates fake invoices or bills to suggest they have large debts to pay.

Transferring money to family or friends

If there is a legitimate reason for this, it’s fine. But if it’s done purely to evade the divorce settlement, it’s not. If the court thinks any transfer made within 3 years of the divorce was improper, they can include that value in the settlement.

Underestimating the value of an asset

The Form E generally asks for an estimate of each item’s value, and it can be irresistible for a partner to understate an asset’s true value. This can apply to anything from business interests, to shares, pictures, cars, jewellery, etc.

Dissipating Assets

There is a second way a dishonest partner can try to avoid sharing money in the divorce settlement: Dissipating assets.

This simply means spending money for the sole purpose of getting rid of it.

Scene from the Wolf of Wall Street where man throws away money

This can include activity such as gambling, making unusually large purchases, selling assets, or spending money on lavish items or events.

However, merely spending money is not enough. The court needs to find that it was ‘wanton’ spending. In short, this means:

  • The spending had no serious purpose and was made purely to reduce funds;

  • It started once it became obvious that the parties would separate, and was done in order to frustrate the divorce settlement;

  • The amount spent is enough to have made a substantial difference to the divorce settlement.

What Steps Can You Take?

So, what are the actions you can take if you think your partner is hiding or dissipating assets?

The first thing is to act quickly.

As soon as you suspect any bad activity is occurring, you should inform your solicitor who will advise you on what steps to take.

A word of warning- be wary of conducting your own investigations. Activities such as hacking into your partner’s emails or filing cabinet could land you in trouble, and won’t leave the court with a good impression of you.  

So, once you’ve told your solicitor of your suspicions, there are a number of actions they can consider, including:

  • Once Form Es have been exchanged, your solicitor can raise a formal questionnaire asking about any suspicions you have. This is a fairly low level way of bringing the issue to the court’s attention. If your partner can’t answer basic questions convincingly, the court will likely allow or order further investigations.
  • A next step is to apply to the court for a forensic accountant to investigate the discrepancies. Often the court merely making this order can be enough to convince the at-fault party to declare their hidden assets.
  • Another tool the court can order is non-party disclosure. This means side-stepping the at-fault partner, and going directly to their bank or HMRC etc. The court can then order these third party organisations to disclose the necessary financial information.
  • The final steps that can be taken are obtaining a court search order, which allows the non-disclosing partner’s property to be searched; and/or a freezing order which prevents assets being disposed of (eg. by ordering a bank not to allow funds to be spent).

Top Tip:

Pursuing a court order (such as a freezing order) can get expensive. Your solicitor will be able to advise you of the costs and benefits.

An icon of a lightbulb

Can The Divorce Settlement Be Reopened?

If bad behaviour is exposed before the settlement is finalised, then the court can order that any hidden assets are included in the final divorce pot.

They can also ‘add back’ any funds that were unreasonably spent.. For example, if the court found that one partner had purposely spent £20,000 to avoid the settlement, then they could offset this by making a larger award to the innocent party.

But what if the bad behaviour is only discovered after the divorce settlement has been agreed? 

Well, if you can show there was fraud or dishonesty you will very likely be allowed to apply to court to have the settlement reopened.

Chapter 7.

<chaptertitleh4>High Net Worth Divorce & Prenuptial Agreements<chaptertitleh4>

On the face of it, a high net worth divorce is no different to a normal divorce.

The value of the marital assets is just higher.

However, they can bring some additional complications, such as:

This can often mean high net worth divorces can cost more and take longer.

What Is Classed As A High Net Worth Divorce?

There is no official definition of a high net worth divorce. However, many specialist solicitors would consider a couple with a combined income of £150k+, or £1million in liquid assets (ie. excluding the family home), to be a high net worth client.

Beyond that, high net worth divorces can stretch into millions or even billions.

The high net worth pyramid
Banks typically categorise anyone with £1-5 million or more as high net worth client

What Are The Common Features Of A High Net Worth Divorce?

Some common features of a high net worth divorce include:

Business Assets

Business ownership is a common source of high net worth, and is likely to form a part of the divorce settlement. A proper business valuation will be essential, and may need assessment by an expert.

One partner can choose to buy the other side out, or the court can order shares to be transferred to the other partner. In extreme circumstances, the court can even order the sale of the business, though this is rare.

Overseas Assets

Very wealthy couples commonly have multiple properties and assets, often spread across other countries. This can add a great deal of complexity to a divorce, as these assets will be under a foreign jurisdiction and it may need a court order from that country to enforce the settlement. A specialist lawyer who has experience in cross border disputes should be used.

Trusts and Inheritance

Many wealthy people use trusts to maximise their tax efficiency, and/or have substantial inherited wealth. As you have probably noticed, the theme here is that these issues add a lot of complexity to the divorce, and a specialist lawyer should be consulted.

Expert Assessments

High net worth divorces are more likely to need the input of independent experts. For example, valuations may be needed for expensive items (such as artwork or investments), or a forensic accountant may be needed to investigate any complex financial arrangements or non-disclosure issues.

Privacy and Alternative Dispute Resolution

Whether it’s due to celebrity status, big business involvement, or even political exposure, high net worth divorces tend to attract more attention than your run of the mill cases. The default is that all divorce proceedings in court are open to public scrutiny as part of the official record (meaning journalists and others can access the details).

For that reason, privacy can be of increased importance in high net worth cases, and the benefits of alternative dispute resolution methods (such as mediation or arbitration) become obvious, as these proceedings can be conducted in private.

Spousal Maintenance

When there is a big disparity in income between spouses, the court may order spousal maintenance.

This is where the court orders the wealthier party to continue making regular payments to their ex-spouse after divorce, because they believe it is necessary in order for the less wealthy partner to transition to independence.

What Is A Prenuptial Agreement?

A <bloglink>prenup<bloglink> is simply a written contract stating who gets what in the event of a divorce. They are generally more common in high net worth cases, simply because there are more valuable assets to be divided or protected.

You can also have a ‘post-nuptial’ agreement, which is the same thing, only signed after the marriage.

Can Prenuptial Agreements Be Enforced?

Unlike the US, strictly speaking pre-nuptial agreements are not enforceable in UK courts. Simply put, the courts will not allow a written contract to override what they view to be a fair outcome in the divorce.

However, the UK courts' approach has softened in recent years, and while they remain technically unenforceable, the court will generally give the agreement a lot of weight and seek to uphold it, if they view it to be reasonable and fair.

What does reasonable and fair mean?

Well, the court will likely look favourably on the agreement provided:

  1. Each party had full disclosure and knowledge of the other partner’s financial assets and liabilities.
  2. Both parties entered into the agreement voluntarily.
  3. Both sides had independent legal advice.
  4. The agreement is judged to be a fair by the court.

If the agreement falls foul of these criteria, then it’s likely it could be successfully challenged in court.

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Neil Johnstone is a barrister and the founder of Neil is a barrister with an interest in all forms of civil and family law, and has appeared at all Court levels, up to and including the Court of Appeal.

Neil started this site in response to a common problem he noticed: Clients were unable to pursue deserving cases due to a lack of up-front funds. Neil knew that better access to No-Win-No-Fee representation and legal funding could help bridge the gap, and so founded; a unique comparison site connecting clients, law firms, and specialist funders.

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