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What do the Court consider when making a financial order?

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When the Court decide how to distribute assets following the breakdown of a marriage, they have to consider the checklist contained within Section 25 of the Matrimonial Causes Act 1973. The main principle is that the settlement must be fair and reasonable for both parties.

Circumstances

The Court must have regard to all the circumstances of the case, the first consideration being given to the welfare of a minor of any child of the family who has not attained the age of eighteen.

Income, earning capacity, property and other financial resources

This requires both parties current and future income and earning capacity to be considered. This can include if a party is nearing retirement age or if one party is refusing to work when they have the ability to. The Court will consider all of the facts and make a decision as to what is reasonable.

Financial needs, obligations and responsibilities

The Court will consider current and future needs, obligations and responsibilities. This can include things such as housing needs, debts owed and agreements entered into. The courts make a clear distinction between hard debts and soft debts, which can often cause many parties’ issues during financial proceedings. Hard debts will include money owed to banks and authorised lenders, whereas soft debts is money owed to friends and family. Hard debts will be considered by the court, and viewed as a necessary obligation to be paid off, where as soft debt may not have so much weight attached to them.

Standard of living

The Courts will consider the standard of living both parties shared before the breakdown of the marriage. As it is not always possible for both parties to maintain the same standard of living as during the marriage, the Court focuses on ensuring that one parties’ standard of living does not largely outweigh the other, again maintaining fairness.

The age of each party and the duration of the marriage

The Court often have the view that the younger the parties’, the more time they have to rebuild their lives following divorce. For example, they still have the ability to add to their pensions and increase their earning capacity, opposed to couples who may be nearer retirement age. When the parties have been married for a long period of time, it is likely that they will have a greater claim on the other party. The court will often take into account the length of time the parties cohabited before the marriage.

The physical or mental disability of either of the parties

It is possible that this will have an impact on the party’s income and earning capacity.

The contributions which each of the parties made

This will also include the contributions that either party is likely to make in the foreseeable future to the welfare of the family, including any contribution by looking after the home or caring for the family. The contributions of the breadwinner is treated the same as the contributions of the home-maker.

The conduct of each of the parties

It is rare that arguments for a parties conduct are successful during financial proceedings. Adultery or the unreasonable behaviour relied upon in the divorce petition will very rarely effect the division of assets.

If you are about to start financial proceedings or are considering a divorce, contact one of the experts in our Family Department at Johnson Astills.