Is it 50/50 in a financial separation?
Maybe, maybe not. If you haven’t contributed equally and don’t have equal future needs, you aren’t likely to get a 50/50 settlement. It’s a nice starting point, but then adjustments are made based on numerous factors. We have written extensively about those adjustments and who gets what previously. This article will discuss the likely outcome of some property settlement cases and if you will go halves with your wife/husband/former spouse.
Many people assume that just because you have gone half and half throughout the relationship, you will somehow end up with 50% of the assets (or debts!). Actually, the family court uses what we call a 4 (or 5) step approach to determine who gets what in divorce or separation.
Most commonly, people end up with 60/40 or even 70/30. Rarely they get half.
Some property settlement examples
A multitude of situations exists in family law, and we have guestimated some examples below. Take these case examples with a grain of salt and remember everyone is different.
if you only had a short relationship with your former spouse and one of you contributed the majority of the assets
what you might expect in this situation – maybe 60/40, maybe 70/30 and maybe even nothing
It’s probably not fair to split it down the middle if one of you contributed the majority of the assets and you’ve been together for only a short time. It’s likely the initial assets might be kept out of the pool altogether, or the court would make an adjustment in the contributing person favour.
what is the exception to this case?
If the couple have young children together and one of the parties (usually the mother) has majority care of the child, that party could argue that a 50/50 split is fair. The pool, in this case, might be separated to including only post-relationship assets and liabilities.
if you have been together for a long time and one brought in all the assets
what you might expect in this situation – maybe 30/70, maybe 40/60 and maybe even 50/50.
If you have had a long relationship and one brought in or was personally gifted the assets, you might find an adjustment in their favour, but it depends on the relationship’s length. In most cases, the parties will have contributed to the relationship equally when the relationship has been long.
what is the exception to this case?
Suppose the other party has future needs or equally contributed to those assets they might adjust in their favour. It’s tough to determine specifically what would happen in this case.
if you built up the assets together, but one worked, and one can’t or has not worked
While you may have contributed a majority to the assets through your work, the other party likely contributed to your work by looking after the house or children. Therefore, it’s likely that contributions will be the same. Additionally, when we look at future needs, the court might adjust the spouse’s case if they need future support to enter the workforce or retrain. It’s likely a 50/50 split wouldn’t be fair in this case.
So will we get half or not?
Each financial separation is very different; the above cases aren’t specific, and multiple factors may come into play. It’s essential to speak to a qualified family law solicitor to determine what factors will come into play in your case and to give you an assessment of what you are entitled to. Even with that assessment, it’s a matter of getting the split done. Again more factors come into play like is it worth arguing over 5-10% when you consider the legal fees? In a small property pool, you might not argue; in a large property pool, it might be worth it. Also, what about future liabilities due to assets like capital gain tax? Is the split fair if one party will have to by CGT on an asset and the other party keeps the family home?
When all of these things are considered, a 50/50 split is very rare in our experience.