Division of Matrimonial Assets
The law regarding how the finances of the marriage are to be split is governed by the Family Law (Scotland) Act 1985. One of the main principles underlying financial provision on Divorce is fairness. Fairness, in some cases, means an equal split of the matrimonial assets. Fairness, in other cases, means an unequal split.
The other principles, contained within Section 9 of the FL(S)A 1985 are:-
- fair account should be taken of any economic advantage derived by either party from contributions by the other, and of any economic disadvantage suffered by either party in the interests of the other party or of the family;
- any economic burden of caring, after divorce, for a child of the marriage under the age of 16 years should be shared fairly between the parties;
- a party who has been dependent to a substantial degree on the financial support of the other party should be awarded such financial provision as is reasonable to enable him to adjust, over a period of not more than three years from the date of the decree of divorce, to the loss of that support on divorce;
- a party who at the time of the divorce seems likely to suffer serious financial hardship as a result of the divorce should be awarded such financial provision as is reasonable to relieve him of hardship over a reasonable period.
Along with the underlying principles mentioned above, there are “special circumstances” which can be used to justify an unequal share of the matrimonial assets. Section 10 of the FLSA 1985 provides a non-exhaustive list of “special circumstances” including:-
(a) the terms of any agreement between the parties on the ownership or division of any of the matrimonial property;
(b) the source of the funds or assets used to acquire any of the matrimonial property where those funds or assets were not derived from the income or efforts of the parties during the marriage;
(c) any destruction, dissipation or alienation of property by either party;
(d) the nature of the matrimonial property, the use made of it (including use for business purposes or as a matrimonial home) and the extent to which it is reasonable to expect it to be realised or divided or used as security;
(e) the actual or prospective liability for any expenses of valuation or transfer of property in connection with the divorce.
When you separate from your spouse it is normal practice to obtain details of all of the assets and liabilities arising from the marriage. That would include assets such as pensions (which are valued between your date of marriage to your date of separation), property (and contents), savings, shares, vehicles, businesses etc. All of the assets are valued as at the date of separation aside from property which is valued at its current market value.
In terms of liabilities, these normally comprise the mortgage, credit cards, personal loans, overdrafts.
Once we have all of the relevant valuations we subtract the liabilities from the assets, leaving us with the net matrimonial assets. Thereafter we consider if there are any special arguments to employ and how those assets will, in practical terms, be divided.
It is imperative that you obtain proper legal advice regarding your rights in relation to these financial matters. Failure to do so can have a catastrophic effect on both your short term and long term finances. You may be worried about legal costs but failure to obtain the right advice should worry you more.
Please get in touch to discuss matters further