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Dealing With Finances in a Divorce or Relationship Breakdown

January 25, 2022

Why a 50/50 division of financial assets is just a starting point

While we’d all love to believe in happily ever after, statistics show that a high percentage of marriages will end in divorce. When you also add the number of cohabiting couples who split up, there is a very real need to address the issue of the division of financial assets from any long-term relationship.


The emotional impact of a relationship breakdown is difficult enough to deal with. Even where the split is mutual and amicable, there will inevitably be some major changes involved, such as  potentially moving out of the home that you shared and dividing up your finances.


Due to a number of high-profile cases, England has gained something of a reputation as being fairly progressive when it comes to matrimonial law and the financial aspects of divorce and separation settlements. Although the principle is that the court will aim for a 50/50 split of assets in accordance with the Matrimonial Causes Act 1973, in fact there is no set formula to apply when calculating financial settlements, and these can vary significantly depending on the specific circumstances of each case. 

How you may be protected from losing out in a divorce settlement

There is still a perception of imbalance where one partner (often the woman) has given up work to raise a family and build a home, so becoming financially dependent on the other partner. But in reality, judges have a wide discretion to divide assets in a way that achieves a fair outcome. It doesn’t automatically follow that the higher earning partner will get the lion’s share of the financial settlement.


Divorce courts must consider several factors, including the income and financial needs of each party, the family’s standard of living before the marriage began to collapse, and whether there are any children. In terms of income, if either party has a high earning potential for the foreseeable future, then this will be an important consideration. Property and other financial assets are also included in the calculation.


One judge even coined the phrase “relationship-generated disadvantage” where, in a landmark divorce case (RC v JC), he awarded the wife an additional financial settlement by way of compensation for her loss of career. In another case (White v White) the judge awarded a settlement that “reflected the wealth of the parties, and not just their needs and requirements.” This decision emphasised that a judge should not make any presumptions of equality, but should ensure "the absence of discrimination", for instance, between a wage earner, and a child-carer, thereby recognising the non-financial contribution of the parent caring for children.


The law also applies to civil partnerships, who have the same rights as married couples when it comes to divorce matters, if they have been in the partnership for a year or more. The process for dissolution of a civil partnership is also very similar to the process for a divorce, which includes the distribution of financial assets. 

Pre- and Post-Nuptial agreements can make things easier

If you’re entering a marriage or civil partnership where there is a significant disparity in either income or capital, or where there are children from an earlier relationship, we suggest you consider drawing up a pre-nuptial agreement. This is a legal agreement that sets out how assets should be divided between a couple in the event of a divorce. It can include your rights regarding property, income, debt and other assets acquired individually (such as an inheritance) or together (such as joint purchases). 

Man and woman figures standing on opposing ends of a seesaw with house balanced on fulcrum

Cohabiting couples that separate: no such thing as “Common Law Marriage”


If you are cohabiting things may not be as straightforward if you decide to separate. Even though it’s common to live together and not get married these days, there is a lot of misconception over financial rights when cohabiting.


For example, there is no such thing as “Common Law Marriage” – that is a myth. It categorically isn’t the case that couples who cohabit automatically have the same legal and financial rights as those in a marriage or civil partnership.


If you are living as an unmarried couple you have less rights, unless you have outlined your wishes in a cohabitation agreement. A cohabitation agreement can set out how you'll divide your finances if you separate, including joint bank accounts, your home and any other assets. However, without an agreement, an unmarried person’s rights in relation to property and assets are significantly affected. Furthermore, there can be serious consequences if there are children from the relationship.


If there are no children, the starting point is that neither party will have any ongoing financial obligations towards the other; they will be able to keep whatever assets or income they have in their sole name. Unmarried couples do not have the right to claim capital or maintenance against the other, irrespective of how long they have been together. A separating unmarried couple will ordinarily divide any assets held jointly in accordance with their legal ownership, then go their separate ways with no further financial obligations.


Where there are children from the partnership, one parent can make an application under Schedule 1 of the Children Act 1989 for a lump sum, settlement or transfer of property order. However, since the law is that the cohabitant herself (it is still often the mother making the claim) has no claims in her own right, any capital which is awarded to purchase a property where her and the children will live is likely to be held in trust until the child’s majority or the end of full-time education, whereupon the capital sum will revert to the payer (the other parent).


So if you are cohabiting, or planning to cohabit, we strongly advise that you consider a cohabitation agreement. While it may momentarily take some of the romance and excitement out of your decision to live together, it will give you both a clear understanding of your legal position and how your assets will be handled should the relationship break down. 

A young seated couple resolving their differences with the help of a mediator who is sitting opposite

Child Contact Agreements

If there are children of the relationship upon separation or divorce, then we can assist in securing an amicable contact agreement. We believe that it is important to ensure that your child or children feel stable, safe and secure during the divorce or separation process.  So we will work with you to reach the best child contact agreement for everybody involved.


It’s more than likely that the child or children will live primarily with one parent and the other will maintain ‘contact’ at regular, pre-arranged intervals, for example, at weekends. If the break-up is amicable this can be arranged quite easily, however, if there is animosity between the parents then arranging future child contact agreements can often end up going to court.


Every situation is different, and your family needs to make some important decisions. Whatever your feelings, it’s vital to put your child’s needs first. These needs will vary depending on their age, health, abilities, life and family experiences and their personality.


Our specialist family solicitors recognise that the best outcome is one where everyone agrees on the contact arrangements. If you want to know more about your rights in this regard, need help with child matters, or want advice on whether a current agreement is legally sound, then please contact us.

What to do if you believe your relationship is over

We are experienced in family legal matters, so our first advice to you is this:-


Do not sign anything until you have obtained legal advice


It’s essential that you get legal advice and secure the services of a specialist in family law before you make any arrangements or agreements with your ex-partner, either verbally or in writing.


Our second suggestion is that you engage in mediation. Divorce law is complicated and expensive (especially now that there is limited legal aid funding) and the process can be protracted with many hurdles to jump over. This can bring its own share of suffering, especially if there are children involved. 


We can put you in touch with accredited family mediators. With divorcing couples, the mediator’s role is to help both parties identify, negotiate and come to a mutually acceptable agreement on the various issues and financial matters required to end their marriage without the need to go to court.


Mediation ensures that you – with your soon-to-be- ex-spouse or partner – will have full control over the divorce agreement and decisions you make.


If however, all other options have been exhausted, then rest assured we will uncompromisingly pursue your divorce settlement through the courts so that you are awarded your full rights under the law, financially and otherwise.


At Ash Hill Solicitors we specialise in all matters relating to family and divorce law and would be happy to have a 20-minute free initial discussion about any issues that you may have. So if you are considering a divorce, please contact us today. 

What will happen to your digital assets if you pass away suddenly?

By Nasreen Akhter • January 20, 2025
What will happen to digital assets if you pass away suddenly? In today’s digital world, where most of us have multiple digital assets, it is important to put measures in place to protect these assets. A digital asset refers to any asset which you own and may have stored in a digital format. Typically, digital assets are accessed via an online account run by a third-party provider such as Facebook, Google, Apple, or Amazon. There are many examples of digital assets which you may own that are online. These are typically bank accounts, music libraries, email accounts, cryptocurrency, social media, gambling accounts, loyalty schemes, or sentimental photos and videos. Maintaining access to online accounts is essential for either financial or sentimental reasons. Thus, it is very important to plan what will happen to your online accounts when you pass. How can digital assets be protected? The tech industry is fast-paced and constantly changing, with new languages, frameworks, and tools emerging regularly. You may have multiple online accounts on various platforms. For each online account, we recommend that you should review the terms and conditions you agreed to when creating the account. Each account is likely to have specific terms on which assets can be administered on death or if there is no activity on an account for a long period of time the account might be terminated. We recommend that you should choose a digital executor to take over control of certain aspects of your account where the internet service providers (ISP) offer this facility. For example, Facebook allows you to nominate a legacy contact to turn your account into a memorial when you die. Google, on the other hand, allows you to nominate an Inactive Account Manager. This in turn allows the account to be closed or for the submission of requests for data from the account. You should make note of the fact that some ISPs will permanently destroy your digital assets after a period of inactivity or upon notification of your death. What will happen to your digital assets if you pass away without a will or have not mentioned the digital assets in your will? If you currently have a Will in place that does not provide for your digital assets upon death, then these are likely to form part of the residue of your estate and will pass to your residuary beneficiaries. If you don’t have a Will in place, then your digital assets will be distributed via the rules of intestacy which could risk your digital assets ending up in the wrong hands or being lost forever. Here is a link to a government website that explains the rules of intestacy: https://www.gov.uk/inherits-someone-dies-without-will What challenges will your relatives face when dealing with your digital assets? Relatives often face several issues when dealing with a relative's digital assets after their death: Access and Passwords : One of the primary challenges is gaining access to the deceased's digital accounts and assets. Without passwords or access credentials, it can be difficult to manage or close accounts. In order to remedy this administrative issue, it is important to keep a list of digital assets and login information in a secure place. Ideally, this should be alongside the will in a locked draw/safe. Furthermore, this should be updated regularly to avoid further issues. Such information should not be disclosed in the Will document as the Will becomes a public document once a Grant of Probate is obtained. Identification of Assets : Identifying all digital assets can be challenging, especially if the deceased did not maintain a comprehensive list. Digital assets can be spread across various platforms and devices. Ownership : Relatives performing the role of an Executor for the deceased’s estate will need to determine whether the deceased owned the object or if they had the required permission to utilise it during their lifetime. The information regarding the deceased’s ownership will likely be displayed in the terms and conditions of each digital asset. Legal Authority : Relatives may need legal authority, such as a grant of probate, to manage or transfer digital assets. This can be complicated if the deceased did not leave clear instructions or if the digital service providers have strict policies. Service Provider Policies : Different service providers have varying policies regarding the transfer or closure of accounts after death. Some may require specific documentation or legal processes. Privacy Concerns : There may be privacy issues related to accessing the deceased's digital communications or personal data, which can complicate the process. Valuation and Transfer : Determining the value of digital assets, such as cryptocurrencies or digital art, and transferring them to beneficiaries can be complex and may require specialist knowledge. Legal and Tax Implications : There may be legal and tax implications associated with inheriting digital assets, which can vary depending on the type of asset and jurisdiction. How can we help you plan ahead to protect your digital assets? At Ash Hill Solicitors, our experienced solicitors specialise in all areas of estate planning and Wills. We can assist in planning your digital legacy by providing comprehensive legal guidance and support in several key areas: Identifying Digital Assets : We can help you identify all your digital assets, including online accounts, digital currencies, and intellectual property, ensuring nothing is overlooked. Drafting Legal Documents : Our team can draft or update your will to include specific instructions for the management and distribution of your digital assets, ensuring these are legally binding and clear. Appointing a Digital Executor : We can assist in appointing a digital executor, who will be responsible for handling your digital assets according to your wishes. Access and Security : We can advise on secure methods to store access information, such as passwords and encryption keys, ensuring that your digital executor can access your assets when needed. Compliance with Laws : Our experienced solicitors ensure that your digital legacy plan complies with relevant laws and regulations, including data protection and privacy laws. Regular Updates : We are able to help you regularly update your digital legacy plan to reflect changes in your digital assets or personal circumstances. Dispute Resolution : In the event of disputes over digital assets, our team can provide legal representation and advice to resolve issues effectively. By working with Ash Hill Solicitors, you can rest-assured your digital legacy is managed according to your wishes, and that your digital assets are protected and transferred smoothly to your beneficiaries. Please access our downloadable free digital assets log: Click Here Further information The draft Property (Digital Assets etc) Bill proposes that digital assets can be the object of property rights in England and Wales. Please see the link below for further details: https://www.lawsociety.org.uk/topics/private-client/property-digital-assets-etc-bill Contact us Call us today so that we can assist you in securing your digital assets: 02085152790 or visit our website for further information https://www.ashhillsolicitors.co.uk/ .

What is a Lasting Power of Attorney?

By Nasreen Akhter • February 22, 2024
A Lasting Power of Attorney is an important legal document that lets you choose who would make decision on your behalf if you were unable to do so due to a sudden accident, illness, or long-term health issues. There are two different Lasting Powers of Attorney, one covers decisions regarding Health and Welfare and the other Property and Finance. The person for whom the Lasting Power of Attorney is created is called the donor and the people (or persons) nominated to make decision on behalf of the donor are called attorneys. How do I decide who to appoint as my attorney(s)? An attorney can be a relative, friend, spouse or civil partner, your child or even a professional. Ideally, they should be individuals who know you well and most importantly to appoint people who you trust. It is always useful to have more than one attorney as this allows checks to be put in place and provides reassurance to you and other members of the family. You can specify what decisions you are happy for your attorney(s) to make on your behalf. You can decide if your attorney(s) must act jointly on all matters or whether they can also act individually (severally). An LPA ensures that, should you be unable to manage your own affairs, the people you have appointed can manage your financial life on your behalf. This can save a great deal of money and will ensure that as a vulnerable person your affairs will be handled correctly. Risks of not having an LPA If you lose mental capacity without an LPA in place, your family must apply to the Court of Protection to have a deputy appointed to deal with everyday financial matters. This is a slow and expensive process. Contact us today for a free no obligation chat: www.ashhillsolicitors.co.uk Our Power of Attorney solicitors can help and guide you through this process to make sure your forms are correctly and accurately completed.

Why are there delays in obtaining grant of Probate and how to avoid them?

By Nasreen Akhter • January 9, 2024
Bereaved families in the UK are facing a significant financial burden as probate delays continue to accumulate significant costs and unpaid taxes, adding to the distress and emotional strain during an already difficult time. https://committees.parliament.uk/committee/102/justice-committee/news/198600/justice-committee-launches-new-inquiry-into-probate-amid-concerns-over-delays-and-consumer-protection/#:~:text=The%20waiting%20time%20for%20probate,take%20at%20least%20nine%20months. The waiting time for probate almost doubled from April 2022 to April 2023, with reports citing cases of probate taking more than eleven months and practitioners advising clients that probate will take at least nine months. Whether using online systems or the traditional paper process, applicants can now expect a lengthy wait of up to four months or more for probate to be granted. The backlog, a long-lasting result of the challenges created by the Covid pandemic, currently stands at around 40,000 applications, and shows no signs of improving, leaving many families uncertain of when or how they can find a resolution. What problems are caused by Probate delays? Delays in settling an estate can have serious financial consequences for beneficiaries. Here are some important things to consider: If Inheritance Tax is owed, the first payment must be made within the first six months after the death. HMRC will not issue a receipt to the Probate Registry until payment is received - https://www.gov.uk/inheritance-tax After six months, HMRC applies interest to any remaining balance - https://www.gov.uk/government/publications/rates-and-allowances-inheritance-tax-thresholds-and-interest-rates Properties with monthly service charges can incur additional costs due to delays. Vacant properties may require special insurance coverage. Waiting for probate to be granted can prolong the process of selling a property, potentially discouraging buyers. Having a current Will in place should help to ensure a smoother and more efficient probate process. How can these problems be solved? HMCTS is actively exploring various methods to enhance the efficiency and speed of its service. This includes a focus on improving IT systems and reducing paper applications. Digital applications, on average, are processed in less than half the time it takes to process paper applications.  However, irrespective of the application method chosen, gaining a Grant of Probate will always involve a significant amount of legal, tax, and administrative work, which can be time-consuming, and complex by its very nature. As such it is always wise to enlist the support of a probate specialist should you want to minimise the risk of complications causing a stoppage or compounding the existing processing delays. Call us today for a free no obligation chat.
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