Example case study: dividing finances for divorcing couple with varying financial assets
The following case study is based on a matter that our divorce finance solicitors typically take on.
Our divorce finance solicitors advised a couple on dividing their finances and assets as part of the divorce process. Geraldine and Joseph lived together for one year before their three-year marriage.
Establishing finances, assets and debts
The couple’s matrimonial home was worth £500,000 and they jointly paid the mortgage, which was £350,000. Geraldine paid £100,000 towards the deposit from an inheritance she received and they signed a Declaration of Trust stating that Geraldine was entitled to the £100,000 on sale of the property, with the remainder to be split equally.
As well as their matrimonial home, the couple had a two-year-old child together. Joseph was an alcoholic, meaning that Geraldine was the child’s primary carer.
Geraldine worked for a London marketing agency, earning £120,000 per year, and she was the sole owner of a rental property worth £200,000. Joseph was a Paralegal with a salary of £18,000 per year. He had student loan debt from before the marriage. He also won £50,000 in the lottery after he and Geraldine divorced.
The couple had a joint savings account of £20,000.
Disagreement over the division of finances
The couple had varying financial earnings, assets and responsibilities which made agreeing on the division of assets more complicated.
Geraldine had more financial resources than Joseph, was the sole owner of a second property worth £200,000, and was entitled to £100,000 on the sale of their property.
However, she had a chronic medical condition that could affect her future earning potential. She was also their child’s primary carer due to Joseph’s alcoholism. Our divorce solicitors took these facts into account when advising the couple.
Negotiating a financial agreement through mediation
Our solicitors negotiated a financial agreement between each party on the division of the following assets:
Former matrimonial home
The Declaration of Trust ensured Geraldine would receive £100,000 of the deposit on the sale of the former matrimonial home, and the remaining equity would be split equally between parties. As Geraldine had a higher income, we advised that the property should be transferred to her sole name, as she was able to pay the mortgage.
Geraldine agreed to give the £20,000 in joint savings to Joseph for the sake of a clean break and to allow him to potentially put a deposit down on his own property.
As Geraldine was their child’s primary carer, Joseph agreed to pay maintenance in line with the Child Maintenance Service calculator.
Assets and debts acquired outside of the marriage
Any assets or debt acquired before the marriage or after their divorce was taken from or given to the appropriate party. For example, Joseph continued to own his student loan debt as this was accrued before the marriage, but he kept the lottery winnings as these were won following the couple’s divorce.
Geraldine maintained ownership of her second property as it was bought outside of the marriage and was solely in her name.
Contact our divorce finance solicitors
Negotiating finances can be the most stressful part of a divorce. Our specialist solicitors believe that the best way of resolving financial settlement issues is through negotiation and outside of court, where possible.
To speak to our divorce and separation solicitors, call us on 0117 325 2929 or fill out our online enquiry form. We work with separating couples across Bristol and the surrounding area in Bedminster, Bishopston, Bristol city centre, Kingswood and Thornbury.