How Are Assets Split in a Divorce? 50/50, 70/30 80/20, 100/0 Splits Explained
The short answer is ”not necessarily”. There is no automatic 50/50 split of assets on divorce in England and Wales. However, equality is often a useful starting point, particularly in longer marriages where wealth has been built up during the relationship but, as with so much in family law, it really does depend upon the individual circumstances.
The court’s aim is to achieve a fair outcome after considering the circumstances of the marriage. This means looking at things such as the couple’s assets, income, pensions and debts as well as their housing and other financial needs and needs of the children. As a result, a 70/30 or even 100/0 division can sometimes be appropriate.
There is no standard percentage that applies to every divorce. Rather than focusing too heavily on a particular percentage, couples are encouraged to look at what each person and any children actually need and what a fair and financial settlement would look like in practice.
When a couple divorces, the court does not simply add everything up and divide it in half.
Under section 25 of the Matrimonial Causes Act 1973, the court must consider all the circumstances of the case and if there are children under 18, their welfare must be given first consideration.
The court will look at a range of factors, including:
The court therefore looks at the whole financial picture, rather than applying a simple percentage to each asset.
No. There is no rule that says matrimonial assets must always be divided equally.
That said, equality is often a starting point, particularly in longer marriages where assets have been built up together, as it provides a benchmark when considering whether the eventual outcome is fair.
But 50/50 is not the end of the conversation. The Court can depart from equality where the circumstances justify it.
Two important principles when looking at a financial settlement are ‘sharing’ and ‘needs’. The sharing principle reflects the idea that marriage is a partnership. Assets built up during the marriage will generally be considered matrimonial assets and subject to the circumstances of the case, may be shared equally between the parties. This applies even where one person earned most or all the income while the other looked after the children or the home.
Needs can lead to a different result. In many cases, particularly where resources are limited, meeting the parties’ needs is prioritised over a strict 50/50 split. For example, if one party needs a larger share of the available capital to provide a suitable home for themselves and the parties’ children (if any), an unequal division is likely to be appropriate.
Yes. A 70/30, 80/20 or 100/0 split is possible, but there is no set formula used by the Courts.
An unequal division may be appropriate for several reasons, including:
The percentage alone does not determine whether an outcome is fair.
For example, one spouse might receive a larger proportion of the equity in the family home while the other retains more pension provision or other investments. Looking only at how one asset has been divided can therefore give a misleading impression of the overall settlement.
It is also important not to assume that a difference in income automatically means the higher earner should receive less capital. Earning capacity is one of the factors the Court considers, but it is not an asset that is simply divided between the parties.
This is why starting with a fixed target such as “I want 70%” is not helpful. The most useful question is: What does each person need, what resources are available and what would be a fair way of meeting those needs?
Not necessarily.
The courts may distinguish between matrimonial assets and non-matrimonial assets.
Matrimonial assets will generally include wealth built up during the marriage. The family home Is particularly important and can have special status, regardless of whose name it is in or who contributed more towards buying it.
Non-matrimonial assets can include property or other wealth owned before the marriage, as well as some inheritances and gifts.
The court still must consider the needs of both people and any children. If there are not enough other assets to meet those needs, a non-matrimonial asset may need to be considered.
The way an asset has been treated during the marriage can also matter. For example, an asset that has been kept separate may be treated differently from one that has been put into a joint account, used to buy the family home or otherwise integrated into the family’s finances.
The Supreme Court’s decision in Standish v Standish has also provided important clarification about the distinction between matrimonial and non-matrimonial property and the circumstances in which an asset may become matrimonial.
The position can therefore be more complicated than simply asking whether an asset was acquired before or during the marriage.
A financial settlement is about much more than the family home.
The court should consider all the financial resources available, including:
Although, as above, how they are treated will vary depending upon the circumstances.
Pensions are particularly important because they can represent a significant part of a couple’s overall wealth, even though they may not provide an immediate source of capital or income.
A pension sharing order is one way of dealing with pensions. This allows a specified percentage of one person’s pension rights to be transferred to the other person. In some cases, the parties may instead agree to offset the value of a pension against other assets, such as the family home.
The right approach will depend on the circumstances. It is important to look at the overall settlement, rather than assuming that two assets with the same cash value should be considered equal. For example one asset may carry more risk than another.
Once there is a clear picture of the finances (achieved through full and frank financial disclosure), the next step is to work out how the available resources can fairly meet everyone’s needs.
Not every couple needs to go to court to do this.
Many people can reach an agreement through negotiation or with the help of a family law specialist. Depending on the circumstances, this might involve mediation, the collaborative model, lawyer-led negotiation, hybrid mediation, arbitration or a private Financial Dispute Resolution (pFDR) hearing.
The right approach will depend on the circumstances. The complexity of the finances, the level of disagreement and the support each person needs can all influence which option is most suitable.
If an agreement is reached, it should be recorded in a financial consent order and submitted to the court for approval.
This is important because reaching an agreement between yourselves is not the same as having a legally binding financial order. Once approved by the court, a consent order makes the agreed financial arrangements legally binding.
Court proceedings may still be necessary where an agreement cannot be reached, where there are concerns about financial disclosure or where judicial intervention is otherwise required.
Ultimately, there is no single percentage that represents a fair divorce settlement in every case. 50/50, 70/30, 80/20 or even 100/0 may all be appropriate depending on the circumstances.
The more important question is whether the overall settlement is fair, takes account of the available resources and properly and most importantly meets the financial needs of both people and any children.
Our team of specialist family lawyers can advise you on how property, pensions, savings, investments, business interests, inheritance and other assets may be treated on divorce. We can also help you explore the most appropriate way to reach a financial settlement, with a focus on finding a practical solution outside court wherever possible.
Please get in touch if you would like advice about your financial position on divorce.