All divorcing couples need to sort out their finances. The family court has considerable power when it comes to arguments over money. A judge can order assets to be sold and can decide how the proceeds should be divided, they can order one spouse to pay a lump sum to the other or to transfer assets to them. They can order a spouse to provide their former partner with an income – potentially for the rest of their life. How does the court decide what to do? The law in this area has become complicated, but the basic principles are straightforward.
All assets are in the ‘pot’ and must be disclosed regardless of whose name they are in, when they were acquired or where they came from. That includes pensions, inherited assets and business interests. The court will consider the assets globally and decide how they should be shared. The emphasis is on equality. In almost all cases the court will treat spouses as having made an equal contribution to the marriage, even if one of them was a homemaker. Assets will generally be shared equally unless there is a good reason to do something else, and most often that reason is ‘reasonable need’. One spouse may be in a weaker financial position than the other often because they have focused on caring for the family. The court may take into account the nature of the assets – not all assets are easily realisable or risk free. If assets were generated before the marriage, after the separation, or were inherited that may also be relevant. The length of the marriage will be an important factor. All of this adds up to the court doing what is ‘fair’ in a particular case although the outcome can feel anything but fair to those involved.
If there are children it is quite likely that one parent will pay child maintenance to the other. That is often calculated as a percentage of their net income, Jersey tends to broadly follow the English guidelines. There may also be school and university costs to pay. On top of that, if there is insufficient capital to meet everyone’s needs, a higher earner may well find that they have to pay spousal maintenance to their former spouse. The amount will depend on their ability to pay it, and the needs of their spouse. In these days of equality, all spouses must do their best to improve their own position and it is now less likely that spousal maintenance will be paid for many years.
The process can be a minefield and specialist advice is important. Legal costs can be high, and may even become an obstacle to a fair settlement if they get out of hand. All clients should discuss costs with their lawyers. You may need to negotiate a payment plan that will enable you to retain the lawyer of your choice, whilst structuring legal fees in an affordable way.
Divorce is never easy. The majority of couples will, however, reach an agreement that they can both live with. At the end of the day, perhaps that is what ‘fair’ means.
Advocate Claire Davies
This article first appeared in Connect April 2019