Dividing the finances or ‘matrimonial pot’ following divorce or dissolution can be extremely tricky and every case is different. The law surrounding this area is complex and the Courts often have a wide discretion on how the pot should be divided making it difficult for unrepresented parties to agree between themselves.
Dividing the finances following divorce or dissolution is always a court process and therefore a useful starting point is to think what a judge would have in mind when considering what financial orders should be made.
The court takes into account all of the circumstances of the case and the first consideration is to the welfare of any children of the family. Furthermore, the court will have regard to the following matters:
a) The income, earning capacity, property and other financial resources which each spouse has or is likely to have in the foreseeable future including, in the case of earning capacity, any increase in that capacity which would be, in the opinion of the Court, reasonable to expect a person to take steps to acquire;
b) The financial needs, obligations and responsibilities which each spouse has or is likely to have in the foreseeable future;
c) The standard of living enjoyed by the family before the breakdown of the marriage;
d) The age of each spouse and duration of the marriage;
e) Any physical or mental disability of each spouse;
f) The contributions which each spouse has made or is likely to make for the foreseeable future to the welfare of the family, including any contribution by looking after the home or caring for the family;
g) The conduct of each spouse, if that conduct is such that it would, in the opinion of the Court, be inequitable to disregard;
h) The value to each spouse of any benefit which one spouse, because of the divorce, would lose the chance of acquiring;
The judge’s main aim is to achieve fairness and often, reasonable need is the overarching factor. The Courts will require both parties to have disclosed their financial affairs openly and honestly before a decision can be made.