In Scotland, the law favours the "clean break" on divorce or dissolution of civil partnership, designed to enable parties to move forward independently of one another economically as well as legally. But how do the courts ensure that a financially weaker spouse or partner (of either sex) can stand on their own two feet after divorce?
The law
Unlike some jurisdictions, separating couples in Scotland should not expect to be financially tied to one another for years. The Family Law (Scotland) Act 1985 sets out a framework designed to divide matrimonial or civil partnership property fairly between the parties, and to provide a clean break insofar as far as is possible. Ongoing financial support post-divorce is not the norm. On the contrary, it is rare for one spouse or partner to be ordered to support the other for more than a very short period following divorce. In order to achieve fairness and to foster financial independence at the same time, the court can take into account non-financial contributions to a marriage or civil partnership and various other practical and economic factors before deciding which orders should be made to reach a fair outcome.
A home of your own
Either party can ask the court to make financial orders in their favour, such as an order for transfer of title to the family home or for payment of a capital sum. Such orders will often be made with a view to enabling a financially weaker spouse or partner to retain or acquire a suitable home, which is affordable for them to maintain under their own steam. In some cases, retaining the family home may not be financially viable for either party – particularly where there is a substantial outstanding mortgage. In such cases, an order for sale of the property may be used to release capital to both parties to enable them to acquire alternative accommodation with a smaller or no mortgage.
Provision for retirement
One obvious consequence of a disparity in earnings during a relationship is that parties may end up with vastly different pension provision, particularly if one party has given up work or worked part time during the marriage or partnership to care for children. In some cases, one party may have a valuable occupational pension (perhaps supplemented by private pension interests) while the other party has little or nothing invested for their retirement. This could place the un-pensioned spouse or civil partner at risk of financial hardship later in life, particularly if there is limited time or scope for them to build up a pension between divorce and retirement. The court can be asked to make a pension sharing order, which has the effect of transferring a proportion of one party's pension for the benefit of the other on retirement. Such orders can be made on their own, or alongside a capital sum or property transfer order.
Economic advantage and disadvantage
A key component of the 1985 Act is found in section 9(1)(b), which deals with economic advantage gained by one party as a result of contributions made by the other, or economic disadvantage suffered by one party as in the interests of the other or the family. Contributions can be non-financial, and it is not unusual for there to be various advantages and disadvantages over the course of a marriage which require to be balanced. The court is routinely called upon to apply this section in cases where one party has given up work and/or had their career and earning potential limited because they have taken on primary responsibility for childcare while the other has been able to advance their career. The court can be asked to make some or all of the orders mentioned in order to redress any overall imbalance.
And in the meantime…..
Aiming for a clean break does not prevent the court from providing some short term support to a financially weaker party during the period between separation and divorce. This is known as interim aliment and is generally sought where one party is unable to meet their monthly outgoings post-separation. Being the lower Being the lower earner doesn’t automatically justify a payment of interim aliment. Rather the court looks at the needs and resources of both parties in the context of their particular circumstances. Where one party can demonstrate a reasonable need for continuing support, the court will then look at the ability of the other party to meet that need. In the majority of cases, interim aliment is sought by those who have sacrificed their own careers in the interests of their spouse or partner and/or of the children of the relationship and need to supplement their income pending a financial decision on financial matters.
No matter your circumstances, if you are separating from your spouse or partner getting the right advice is crucial to ensure you put yourself in the best possible position to move forward on a positive economic footing. For more information, please get in touch.
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