Navigating Finances in Divorce:
Understanding the Realities Beyond 50/50
Historically, women were viewed as effectively being a chattel of their husband, who was not permitted to own property, receive inheritance, have custody of their children, earn and own their income, or any option to divorce their husband. It wasn’t until the Married Women’s Property Act 1870 that women were allowed to own the money they earned, even so this did not change the financial provision for women in divorce. In fact, there was a long period between this legislative change, and the next change which came in 1937 with the Matrimonial Causes Act (MCA 1937). The MCA 1937 allowed women to inherit 1/3 of the matrimonial assets upon divorce, provided they were not found to be at fault. Whilst this can be seen as progressive legislation, since it recognises a women’s claim in divorce proceedings, the law refused to recognise the part played by a woman as homemaker and carer of children.
The Marriage Causes Act 1973 legislated for a 50/50 split of matrimonial assets, finally recognising the important role played by women as the homemaker. S.25 of the Marriage Causes Act 1973 set out the factors that should be considered upon division of matrimonial assets such as reasonable requirements of either party, the welfare of any minors, and the duration of the marriage, which are still used today. The case of White v White1 involved a wealthy couple with matrimonial assets exceeding £4.5 million and was a landmark case in establishing the concept of equal sharing as the starting point for financial settlement. In this case, the court held that consideration of the wife’s future needs, and her reasonable requirements was inappropriate as £4.5 million clearly exceeded either party’s needs. The decision of equal sharing in this case was a significant, and long-awaited, shift from the previous practice of the husband retaining the majority of the wealth.
It is certainly worrying that women were not treated equally in the division of matrimonial assets until 2000, and it was done in a very piecemeal manner. Although the law has progressed significantly, legal practitioners and academics still fear that women can be financially vulnerable in financial settlements, particularly where legal advice is not obtained.2
Recent report examines the reality of finances in divorce cases for the average couple:
Whilst the case of White v White was significant in establishing the concept of equal sharing, it does not reflect the stark and rather difficult reality faced by most couples who have modest assets, sometimes not enough to go round. Professor Hitchings report ‘Fair Shares’3 explores the difficult reality of the everyday couple’s divorce and the struggle of balancing the needs of each party with often limited assets. Cases involving the average couple, when compared to cases involving substantial wealth like White v White are hard to reconcile, especially since media often portrays divorce cases of the rich and famous, giving lay people a distorted reality of financial settlements in divorce cases. In particular, Professor Hitchings identifies that equal sharing may not always deliver a fair outcome, especially where there is not much to share and the couple have different priorities to those of wealthy couples, such as providing a home for the children from the relationship.4
Importance of legal advice
Unfortunately, marriage is quick and easy to enter, yet it can be protracted, confusing and emotionally challenging to end. Pursuing legal advice and assistance during divorce is vital to ensure equal sharing, and a fair settlement especially where assets are limited.
The ’Fair Shares’ report demonstrated a general reluctance of divorcees to instruct solicitors particularly due to misconceptions about cost. This is particularly problematic as the report also showed that divorcees showed a considerable lack of financial and legal knowledge.
Pensions
Conclusion
It will remain a concern that women were overlooked by the law for so many years, and that legislation to change this was done in a piecemeal manner. But the fact remains that, in this day and age, the concern of the average divorce case now is to meet the needs and reasonable requirements of the parties with limited means, as opposed to ensuring a precise 50/50 split. The court will always try and achieve as close to equality as possible. Instruction of a legal professional will ensure that all avenues for division are explored, and particularly ensure correct consideration of pensions which are often overlooked or under-utilised, to encourage a fair financial settlement.
Sources:
1: Delivered by the House of Lords, 26 Oct 2000
2 – 6: Professor Hitchings ‘Fair Shares’ – 2023: Fair Shares Report | University of Bristol Law School | University of Bristol
