Does adultery or unreasonable behaviour affect the asset separation in divorce?
As it can be seen from this case, it is a common misconception that if divorce is based on adultery or unreasonable behaviour, then the affected party should be entitled to a compensation in form of a bigger share of matrimonial assets. After all, the reasoning goes, they are not the ones to have caused the breakdown of the marriage and have suffered emotional distress. Interestingly, our divorce lawyers have noticed such approach not only from clients who claim to have been the injured party, but oftentimes by those who have displayed the behaviour. For instance, we often would hear from our clients that while the allegations are true, they cannot escape from fear of losing considerable share of their assets.
The idea that the grounds for divorce can affect the outcome of the financial settlement is completely incorrect. Neither adultery, nor unreasonable behaviour, or any other ground for that matter, will normally affect the outcome of asset separation following a breakdown of marriage. There are only exceptionally limited behaviour patterns that will be taken into account when discussing asset separation.
In this particular case, Ms Singal explained to the client that none of the reasons brought forward by his wife as grounds of divorce had any impact on how the matrimonial assets would be divided.
How the assets are split in a divorce?
Having clarified the initial misconception, Ms Singal then went through the major factors that are taken into account when splitting matrimonial assets, to determine what outcome would be reasonably achievable for the client.
The factors that are normally taken into account by the courts when splitting matrimonial assets are as follows:
Needs of the children
In all the cases where children are involved, their welfare and future financial security will always be the first factor to be considered. Therefore, the party that will have the residency of the child, is likely to have a better position when assets are split.
In this case, the children of the couple were already adults with their own lives and as such, they were not a factor in how the arrangements would play out.
Available Capital, income and other resources
All assets, whether family home, second homes, investment properties, interest in business, pension etc are considered to be part of the matrimonial assets. All these assets need to be valued and if parties disagree in their value, an independent valuation will need to be carried out, which will increase the legal costs. There can also be some difficulties in identifying what is considered a marital asset and what is not.
In this particular case, due to the length of marriage, even assets that were acquired by our client prior to his marriage, could potentially be included in the pot that would need to be divided. This is because non-matrimonial assets, during time of marriage can potentially mingle with matrimonial assets, leading to them being treated as matrimonial, rather than non-matrimonial asset. In the present case, there was an issue with a complex inheritance from our client’s family that had the potential of being taken as a matrimonial asset, even though it was our client’s inheritance.
Financial needs of the parties
In all cases of financial settlement, the financial needs of the parties will also be an important aspect, in particular the need of rehousing. Each party will need to confirm their outgoings and disclose their income. This helps to assess how the assets should be split, in order to not cause any significant financial hardship for any of the parties leaving the marriage.
Length of marriage and age of parties
The longer the marriage the more likely that all assets of the parties are matrimonial assets that will need to be separated. Moreover, the age of the parties will also have an impact on determining their financial needs. For instance, in this particular case, had the couple not been married for such a lengthy time and the wife was much younger, it would have been expected that she could get back to her professional career and become financially independent, whereas in the current circumstances such line of argument would have been very unlikely to succeed.
Contribution of each parties
It is important to understand that the Courts of England do not view the contribution of each party in respect of matrimonial asset accumulation as something directly proportional to their income. For instance, a homemaker, like the wife of our client, would be seen to have contributed in equal measure to the overall wealth of the family.
Standard of living before the breakdown of marriage
This is a major factor for high net worth divorces. When assessing the distribution of assets, the courts will always look at what the standard of living was like during the marriage and will distribute assets in a manner that the financially weaker party can maintain a reasonably close standard of living.
Any physical or mental incapacity
Any physical or mental impairment can also be an argument in favour of the suffering party. In this case, this aspect was not relevant, as both parties were in relatively good health.
Having discussed the matter with the client in detail, explaining to him the relevant factors that could impact his case, Rakhi Singal took the final instructions from the client. As always, she emphasised that settling the matter without having to resort to the courts should be the main focus. Matters like these, easily became very contentious when issues such as inherited assets, pensions, maintenance and liability of debts are involved. This in turn means quickly mounting legal costs that in the end do not really benefit anyone.
Rakhi and her divorce team worked closely with the client to come up with a reasonable proposal that could be put to the other side to start negotiations. With a clear starting point and endgame in mind, we were able to negotiate effectively with the other side and settle the matter without the need for parties to attend a final hearing.
The settlement was favourable to our client and he has since been able to maintain a cordial relationship with his ex-wife.