How Are Assets Split in a Divorce?

One of the first questions we are often asked by separating couples is ‘how are assets split in a divorce?’ 

In England and Wales, the division of assets is governed by fairness, not fixed formulas. The Court considers a wide range of factors, from financial resources and future needs to contributions and child welfare. Understanding how these principles apply can help you make informed decisions and achieve the best possible financial outcome during divorce proceedings. 

What factors determine how assets are divided in a divorce in England & Wales? 

The law governing the division of assets on divorce is set out in Section 25 of the Matrimonial Causes Act 1973. It is a checklist under which the Court will first consider the welfare of any minor children. Thereafter, the Court will take account of such factors as the parties’ available assets, income, other financial resources and earning capacities and they are balanced against their needs (both capital needs and income needs/expenditure).  

The Court will also take account of the parties’ ages, the length of marriage, any mental or physical health issues, the standard of living enjoyed during the marriage and the parties’ contributions (both financial and non-financial).  

It is only in extreme cases that the Court will take account of any bad behaviour or ‘conduct’ 

Is everything split 50/50 in a divorce, or can there be a 70/30 asset split? 

The starting point is for there to be an equal division of the assets, taking into account any inherent liabilities.  

However, there can be a departure from the 50/50 division based on factors such as whether any assets were pre-owned before the relationship or marriage, acquired from a wholly external source, such as through an inheritance within the marriage, or acquired after the breakdown of the marriage through unilateral efforts. 

There can also be a departure from equality based on sharing liquid or illiquid assets, which would leave one party with a majority of the illiquid assets. There may be a reason to depart from equality based on needs, i.e. this would cover a scenario whereby a simple application of 50/50 division of the matrimonial assets would leave one party without their needs met. 

How does a divorce without a financial settlement affect future claims? 

A Final Order (Decree Absolute) legally ends the marriage, but it does not end the financial relationship between the parties. 

If a couple divorces without a financial settlement being made, future financial claims remain open indefinitely, albeit they are limited. 

When applying for divorce, the parties will confirm whether they intend to apply for a financial order. If you answer yes, then financial proceedings are commenced by way of separate application, and you can apply for a broad range of orders.  

Your application remains live even after the marriage is legally at an end, and you are not prevented from making a claim for a lump sum or property adjustment order should you remarry. 

If you answer no, then you will only be able to apply for a lump sum or property adjustment order once the marriage is at an end, but only if you have not remarried. 

Treatment of Different Types of Assets

How does the Court treat assets acquired before the marriage?

Section 25 of the Matrimonial Causes Act 1973 draws no distinction between “matrimonial” and “non-matrimonial” assets i.e. assets acquired before the marriage.  

The Court will first consider whether there are any assets which can be categorised as “non-matrimonial”. If there is a clear distinction between matrimonial and non-matrimonial assets, then the Court will usually leave the non-matrimonial assets out of the equation when dividing the assets, especially where the marriage was short and assets were kept separate. 

However, the Court will make an overall assessment to achieve fairness. They may conclude that those non-matrimonial assets need to be distributed to meet the parties’ needs. In the case of a long marriage, over time, the distinction between matrimonial and non-matrimonial assets can blur as they become intermingled. 

Can my spouse claim part of my inheritance in a divorce? 

Inheritance is not automatically shared in a divorce. It will usually be considered “non-matrimonial” property. However, the Court may take it into account if the parties’ needs will not be met without it.  

Are pensions included when splitting assets in a divorce? 

Yes, the Court has the power to make various orders in respect of the parties’ pensions. There are three main ways a pension is dealt with on divorce: 

• Pension Off-Setting 
• Pension Attachments
• Pension Sharing  

The Family Home and Property 

How does the Court decide who keeps the family home in a divorce? 

When making any order, the Court will always look at what is fair to ensure that both parties’ needs are met. It will consider the factors set out in Section 25 of the Matrimonial Causes Act 1973; the first consideration being given to the welfare of any minor children of the family.  

The Court will therefore ensure that any order made reflects the needs of the children as well as the parties, by ensuring that the children are suitably accommodated when determining what should happen to the matrimonial home. 

Can investment properties or second homes be treated differently in asset division? 

Investment properties or second homes that are owned solely by one spouse are often treated as “non-matrimonial” assets, especially if they were acquired before the marriage and were kept separate from the matrimonial assets. 

However, the Court will take them into account in the overall division of assets if they are needed in order to meet the parties’ needs. 

Investment properties or second homes that are jointly owned will be divided between the parties. 

What happens to joint bank accounts during a divorce?

Joint bank accounts are considered matrimonial assets that both parties have an equal right to, and the money will be divided as part of the financial settlement. 

Debts and Hidden Assets 

Are debts split in the same way as assets during divorce? 

When looking at how to divide up debts, the Court will typically look at whether the debt is “matrimonial” or “non-matrimonial” debt. 

If the debt is “matrimonial” i.e. incurred during the marriage and for the benefit of both parties or children, then the Court will typically consider it to be the joint responsibility of the parties.  

If the debt is “non-matrimonial” i.e. incurred before/after the marriage or during the marriage by one party, not for the benefit of the family, then the Court may consider that this debt be the responsibility of the spouse who incurred it. 

Ultimately, when considering debts, the Court will look to achieve fairness and ensure that both parties needs are met.  

Can one spouse hide or transfer assets before a financial settlement?

In the UK, both parties are under a strict legal duty to provide full and frank disclosure of all their assets. This duty is ongoing. Attempting to hide or failing to disclose assets can lead to serious consequences, including fines, payment of the other party’s legal costs, or even imprisonment. 

What happens if hidden assets are discovered after the divorce is finalised?

If hidden assets are discovered after the financial order is made, you can ask the Court to reopen the case to set aside the original financial settlement and consider the section 25 factors afresh taking into account the hidden assets.

You can learn more about what happens if you don't get a financial order in a divorce by clicking here.

Legal Agreements and Court Orders 

How do prenuptial or postnuptial agreements affect asset division?

The existence of prenuptial and postnuptial agreements does not prevent the Court from deciding on the appropriate division of assets in accordance with the factors under section 25 of the Matrimonial Causes Act 1973.

Courts will use the agreements as a starting point for asset division, and it remains open to a court to hold that a different division of assets is appropriate having regard to the section 25 factors.

What is a financial order in divorce, and why is it important?

A financial order in divorce is a legally binding document issued by a Court that sets out how a couple’s capital i.e. property, savings etc, income and pensions are to be divided after their marriage comes to an end.

They are important because without one, either spouse is able to make financial claims against the other in the future, even after divorce. It provides certainty about who owns what, and ensures all financial matters are fully settled.  

If one spouse fails to comply with the terms of the financial order, the other spouse can enforce it through the Court.

Can a financial order prevent future claims after divorce? 

Yes. The financial order can include a clause to confirm that all future claims are dismissed, preventing any party from seeking to reactivate a claim in the future. This is known as a “clean break” provision.

Contact our divorce solicitors

Every divorce is unique, and understanding how assets are split requires careful consideration of your personal and financial circumstances. Whether you’re concerned about property, pensions, inheritance or business interests, seeking specialist legal advice early can make a significant difference to the final settlement.

At Aaron & Partners, our Family Law team offers discreet, partner-led guidance on complex financial arrangements, ensuring your interests are protected and your future secure.

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