Many of us have been hooked by series 2 of the BBC drama, 'The Split', which follows the emotionally charged ups and downs of the Defoe family life. When spouses, civil partners or cohabitants 'split', family law solicitors are brought in to help not only to advise on that split, but also the splitting of assets and liabilities and childcare arrangements. How should property, pensions, savings and debt be split? Is there a right or wrong split?
We are often asked if a 70/30 split is possible. In short, the answer to this is yes as in certain circumstances, although each case is different. The law in this area is explored further below.
The starting point in Scotland is that on divorce the 'matrimonial property' is divided fairly. Fair will generally mean an equal division but there are factors which can result in an unequal share of the property being awarded to one party or the other. Before we go to consider this, it is necessary first to establish what constitutes matrimonial property i.e what is going to be divided between the couple on divorce.
What is the 'matrimonial property' for the purposes of a divorce settlement?
"Matrimonial property" is all assets and debts held by the couple (either in joint names or their sole names) at the date on which they separated, other than those assets acquired by way of a gift from a third party or inheritance. Assets held by them before the marriage do not form part of the matrimonial property. The exception to this is a residential property that was bought prior to the marriage but for use by the couple as a family home during the marriage.
The 'date of separation' is the date on which the couple were no longer 'living together as husband and wife'. It is possible to be separated whilst still living under the same roof as it is understood that not every couple can afford to run two households post-separation or have family/friends with whom they can reside temporarily. If there is a dispute about when the separation took place, there are various factors that can be considered to determine this.
How is the 'matrimonial property' valued?
Assets in sole names are valued at the date of separation and assets in joint names are valued at the current date. This enables the total value of the matrimonial property to be divided to be determined.
How is the matrimonial property divided?
The starting point for division is 50/50. There are, however, legal arguments to support a departure from this in certain circumstances, such as a 60/40 or 70/30 basis, although such divisions are not the norm. Each case turns on its own facts and there is a wide discretion as to what is fair in any particular case.
An argument can be advanced that fair account should be taken of any economic advantage derived by either party from the contributions by the other, and of any economic disadvantage suffered by either party in the interests of the other party or of the family.
An example of this could be where one party put money into the other party’s business or if one party has given up a well-paid job to look after children. An economic advantage includes gains in income, capital and earning capacity and contributions can include non-financial contributions, such as childcare. In weighing all of this up, a court must consider whether the economic advantages or disadvantages sustained by either spouse have been balanced by the economic advantages or disadvantages sustained by the other. An award can be made when an imbalance is found.
As referred to above, gifts from a third party, inherited assets and anything acquired prior to the marriage ( with the exception of a residential property bought prior to the marriage for use as a family home) do not form part of the matrimonial property to be divided on divorce.
Such assets may be 'converted' during the course of the marriage., For example, an inheritance may be used to purchase a new asset (eg. a car). In those circumstances, the 'new asset' does form part of the matrimonial "pot" and its value will be taken into account in the division of the assets. In that situation however, a ‘special circumstances’ or 'source of funds' argument can be advanced. It would be argued that in determining how the matrimonial property (or "pot") ought to be divided, either the value of the new asset ( or part of it) should be excluded from the matrimonial pot or there ought to be an unequal split of the pot in favour of the party with the special circumstances argument.
This argument is not fail-safe and it is unlikely that the converted assets would be excluded from the matrimonial 'pot' altogether. A pre-nuptial or post-nuptial agreement entered into prior to or during the marriage can be used to prevent this situation arising.
There are other special circumstances which can be advanced which, if successful, could also result in an unequal split of the matrimonial property.
In short, therefore, there are a number of reasons why there could be a departure from a 50/50 split of the matrimonial property on divorce, but there is no guarantee of success with any of the arguments referred to above.
If you wish to discuss this, or any other family law issue further, please do not hesitate to contact us- we're here to help.
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Senior Associate
