How is a home divided in divorce in England and Wales
When divorce proceedings have been initiated by one spouse, the couple should look to resolve their finances at the same time. For many families, their main asset is the Family Home, although this is not always the case. It should be noted that the Family Home should be looked at in conjunction with all other assets including but not limited to: holiday homes, other properties, land, shares, savings, investments, pensions and businesses. Pensions in particular, should not be overlooked, as they too can often be the most valuable assets the parties own.
What do the court look at when deciding what orders to make?
The court has a duty to consider all the circumstances of the case and to take into account a range of specific statutory factors set out in s25(2) of the Matrimonial Causes Act 1973:-
- The income, earning capacity, property and other financial resources which each of the parties has or is likely to have in the foreseeable future, including in the case of earning capacity any increase in that capacity which it would in the opinion of the court be reasonable to expect a party to the marriage to take steps to acquire;
- The financial needs, obligations and responsibilities that each of the parties has or is likely to have in the foreseeable future;
- The standard of living enjoyed by the family before the breakdown of the marriage;
- The age of each party and the duration of the marriage;
- Any physical or mental disability of either of the parties to the marriage;
- The contributions which each of the parties has made or is likely in the foreseeable future to make to the welfare of the family, including any contribution by looking after the home or caring for the family;
- The conduct of each of the parties, if that conduct is such that it would in the opinion of the court be inequitable to disregard it.
However, if the couple have children, the court’s overriding consideration is the welfare of any minor children of the family. The court will wish to ensure that the children of the family are adequately housed during their minority with one or both parents. It is not always possible for both spouses to be rehoused with the matrimonial assets available, so the court will look to ensure the spouse with whom the children are to live the majority of the time can house themselves adequately in the first instance.
What Orders can the court make in relation to the Family Home?
The court has a wide range of judicial discretion when determining the appropriate division of matrimonial assets but the following are the most common options available to the court in relation to the Family Home and any other properties which the parties might own.
- Sale of the property
- Transfer of the property into the sole name of one spouse, whilst the other spouse receives a lump sum or retains other assets
- Transfer of the property into the sole name of one spouse, with the other having a deferred interest in the property, which they will receive on certain events in the future eg, the youngest child completing their full time secondary education or attaining the age of 18 years. This type of order is made, where there is insufficient money for both parties to rehouse immediately and if the Family Home were sold, their children’s needs for housing would not be met.
Wherever possible, the court will seek to sever the financial ties between
spouses, so that they end their financial interdependence towards each other. If this can be achieved by way of the sale of the Family Home or transfer of the Family Home into one spouse’s sole name, this is the preferred outcome. However, in some cases, it may not be possible to do so immediately due to the lack of financial resources for one party. In these circumstances, it is likely that a transfer of the Family Home will be made to one spouse, with the other having a deferred interest in the property. This type of order is known as a ‘Mesher Order’ or ‘Charge Back Order’.
What share will I receive from the Family Home?
The court will look at the spouses’ financial circumstances on a case-by-case basis. As a starting point, assets accrued during the course of the marriage are divided equally including the Family Home irrespective of whether it is in the sole name of one spouse or in their joint names.
If both spouses are able to rehouse themselves and any children appropriately with an equal share of assets, the court will be unlikely to move away from equality. This will also be the case if one spouse has to wait until a later date (e.g. until the youngest child attains the age of 18 under a Mesher Order) to realise their interest in the Family Home.
However, if the needs of a spouse and any children cannot be met by an equal division of the net proceeds of sale from the Family Home and other capital assets, an unequal division is likely to be appropriate. In these cases, the needs of that spouse are likely to dictate how the house will be
To assess each spouse’s need for housing, the court will consider how much it will cost for them to each buy a suitable property. Both parties will provide 4 or 5 property particulars of properties they say would 1) be suitable for themselves to live in and 2) be suitable for the other spouse to live in. The court will then consider how much each party is able to raise on mortgage. Thereafter, it can work out how much each party needs by way of deposit from the sale proceeds of the Family Home and other capital assets, to purchase a suitable property. Often cases turn on whether a party needs e.g. £X to purchase a suitable property or whether they need £X plus or minus £50,000.
Unfortunately, there is no set formula to determine how the Family Home and other assets should be shared on divorce and each case will turn on its own facts. For more information and advice about the specifics of your matter, please contact one of our specialist family law solicitors on 01604 258558.