Divorce in Scotland - sorting out the finances

In Scotland, when a couple divorce, the starting point for division of matrimonial assets is that it should be fair. However, we need to examine these two elements to understand what that means. The first element is the identification of the matrimonial assets. The second element is what a fair division means.

What are matrimonial assets?

Matrimonial assets are assets built up over the course of a marriage. One of the problems with this is that sometimes, the couple may each own assets before they became married. This is especially true where the individuals may have been in previous relationships. For example, each of them may own their own property or a share in a property. This can make identification of matrimonial assets troublesome.

There are also situations where items or monies that were not originally matrimonial assets either become matrimonial assets or are used to acquire matrimonial assets.

Before there can be any discussion about a fair division of the assets, the extent of the matrimonial assets must be established.

What does a fair division mean?

Most people would think that a fair division means an equal division. For instance, split everything down the middle and each party walks away with half of the assets. However, that is not always the view taken in divorce.

If special circumstances can be shown, it is possible to justify an unequal division of the matrimonial assets. Such special circumstances might be when one party has gained an economic advantage through the contribution of the other party. Alternatively, one of the parties may have sustained economic disadvantage in the interests of the other party or in the interests of the family. It can also be argued that one party has had the economic burden of looking after children. Any of these could be used to argue for an unequal division of matrimonial assets.

What is the effective date on which assets are assessed?

An additional element to be taken into account is the actual date of separation. It is important to establish this because this is the date on which assets are valued. If the parties acquire assets after this date, they will not be considered matrimonial assets. Also, if one of the parties disposes of something after that date, if the asset was owned on or before the effective date, the value of the asset will still be included as part of the matrimonial property even although the assets are no longer owned.

Reaching a financial agreement on divorce

It can be challenging to reach a financial agreement on divorce. On separation and divorce, feelings tend to run high and, sometimes, it is extremely difficult to separate emotions from decisions that must be made.

There are several options available to try to resolve issues. These might include negotiation between the solicitors for the couple. Another option might be mediation or arbitration. The end result of these negotiations is to reach a consensus on the financial arrangements between the parties.

If a satisfactory agreement can be reached, that agreement can be enshrined in a Separation Agreement which will be binding on the parties. Failure to reach agreement can lead to court proceedings.

How do the courts view financial provision on divorce?

The courts are looking to apply a “clean break” principle. The court will assess the matrimonial property at the effective date. They will then hear arguments on economic advantage and economic disadvantage. They will consider the needs to the parties going forward and include the needs of other family members, usually children. They will then decide whether any capital award should be equal or unequal and in whose favour in the case of an unequal division.

Are there any other financial arrangements available?

There is an option for one party to claim spousal aliment. Spousal aliment will apply from the date of separation until the date of divorce. Again, the needs and resources of the parties are taken into account and an agreement reached on aliment. The courts can also make an award of aliment between the date of separation and the date of divorce.

In certain circumstances, an award of periodical allowance may be available. This type of award is made by the courts. Periodical allowance is generally payable on divorce when one party is substantially dependent on the other. The purpose of periodical allowance is to allow the formerly dependent party to adjust to the loss of support.

This award is generally for a period of three years and is designed to relieve any hardship the dependent spouse suffers as a result of divorce.

What is the situation in the dissolution of a civil partnership?

The position when a civil partnership is dissolved is exactly the same as when a married couple divorce. The same criteria apply to determine the partnership assets, what a fair division should be and whether one party has been economically disadvantaged to the economic advantage of the other.

Separation Agreements in North Berwick and Dunbar, East Lothian

Our solicitors have been involved in negotiations for clients in divorce and dissolution cases where there have been claims and counter claims against the matrimonial or partnership assets. Invariably, agreement is reached and the terms of the agreement reflected in a separation agreement. 

If you need any help or advice in understanding the law and your entitlement on separation or divorce, please get in touch with us to arrange an appointment.