Division of Assets in Divorce: Relationship Breakdown

A relationship breakdown can be one of the most emotionally and financially challenging times in a person’s life. When a marriage ends, questions about the family home, savings, pensions, or even a jointly owned business can quickly become overwhelming. For many people, the fear of “what happens to our assets?” is just as worrying as the emotional impact of separation.

In England and Wales, the law aims to ensure that assets are divided fairly, with the needs of both parties and any children of the family being the most important consideration. Fairness does not always mean assets are divided equally. Instead, the court takes into account a range of factors such as earning capacity, financial needs, and future responsibilities.

AFG Law explains how assets are divided in divorce, which assets are taken into account, and how business and other complex assets may be treated. We also answer some of the most common questions people have when they are thinking about divorce.

If you have questions regarding the division of assets in divorce or divorce financial settlements, please do not hesitate to get in touch with a family law solicitor from our team.

How are assets split in a divorce?

When a divorce reaches the stage of resolving financial matters, assets are either agreed between the couple or, if agreement cannot be reached, decided by the court. The law governing financial division is found in the Matrimonial Causes Act 1973, which sets out the principles judges must apply.

The court considers a list of factors often referred to as the section 25 factors. These include:

• The income, future earning capacity, and financial resources of each party.
• The financial needs, obligations, and responsibilities of each party.
• The length of the marriage.
• The standard of living enjoyed during the marriage.
• The age of each spouse and the duration of the marriage.
• Any physical or mental disability.
• The contributions made by each spouse, whether financial or through caring for the family.
• The needs of any children.

The starting point is often a 50/50 division of matrimonial assets, but this can be adjusted depending on the circumstances. For example, if one party has a much lower earning potential and will be the primary carer of the children, they may receive a larger share.

Which assets are divided in a divorce?

In most cases, all assets are considered, not just those in joint names. This includes:

• The family home: The matrimonial home is often the most valuable asset, and central to discussions about where children will live.
• Savings and investments: Cash savings, ISAs, stocks, and bonds.
• Pensions: Pension funds can be significant and are sometimes overlooked, but pensions are often divided through a pension sharing order.
• Vehicles, valuables, and personal possessions: Cars, jewellery, art, and other items of value.
• Other properties: Holiday homes or buy-to-let investments.

The court distinguishes between matrimonial assets (those built up during the marriage) and non-matrimonial assets (such as inheritance or property owned before the marriage). Non-matrimonial assets can sometimes be excluded, but if financial needs cannot be met without them, they may still be taken into account.

Division of business assets in divorce

Business interests can make divorce settlements more complicated. A company shareholding or partnership interest is often treated as part of the matrimonial pot. The court will want to know the value of the business and whether it can be divided or offset against other assets.

There are several possible outcomes:

• One spouse may keep the business while the other receives a greater share of other assets.
• Shares may be transferred if both parties were involved in running the business.
• In some cases, expert valuations are required to work out the true worth of the business.

The court is usually reluctant to disrupt a business that provides ongoing income, but it will look carefully at whether it forms part of the financial resources available to the couple.

How long after a divorce can you claim assets?

A common misconception is that once the divorce itself is finalised, financial ties are automatically severed. This is not the case. Without a financial order approved by the court, either party could make a claim years after the marriage has ended.

There have been cases where a former spouse has applied for a financial settlement decades after the divorce. Although a long delay can affect what the court decides, the risk of a claim remains unless a formal order is made.

For this reason, many people apply to the courts for a clean break order, which finalises financial matters and prevents either party from making future claims. A clean break can bring peace of mind and allow both parties to move forward without the uncertainty of unresolved financial issues.

How to protect assets from divorce?

It is natural for people to worry about protecting assets, especially if they have built up wealth before the marriage or own a business. There are a few steps that can help:

• Pre-nuptial and post-nuptial agreements: Although these are not automatically binding in England and Wales, courts increasingly give weight to these types of agreements if they are fair and entered into freely.
• Keeping clear records: Documentation showing when an asset was acquired can help demonstrate whether it should be treated as non-matrimonial.

Ultimately, the court’s priority is fairness. Attempts to hide or dispose of assets are likely to backfire and may result in penalties. The best protection often comes from reaching an early and reasonable financial agreement.

Maintenance payments after divorce

In addition to dividing assets, the court may also consider ongoing maintenance. There are two main types:

• Child maintenance: This is a regular payment made by the parent who does not live with the child most of the time. In most cases, it is arranged through the Child Maintenance Service (CMS), which calculates the amount based on the paying parent’s income.
• Spousal maintenance: This may be ordered if one spouse cannot meet their reasonable needs after the divorce, for example because they have given up work to care for children or have a much lower earning capacity. The court looks at the needs and resources of both parties when deciding whether spousal maintenance is appropriate, and how long it should last.

Where possible, courts prefer a clean break so that both parties can become financially independent, but spousal maintenance can provide important support where there is a significant imbalance in income or resources.

Clean break divorces

A clean break divorce is where a financial order is made that brings an end to all financial ties between the parties. Once approved, neither spouse can make further claims against the other’s income, property, or estate.

Clean breaks are most suitable where both parties are financially independent and no ongoing support, such as spousal maintenance, is required. In cases where one spouse needs maintenance for a period of time, the court may order ongoing payments instead, though this can sometimes be converted to a lump sum to achieve a clean break sooner.

For many people, a clean break provides a sense of closure. It allows both spouses to move forward, rebuild their lives, and make plans for the future without the risk of financial claims hanging over them.

Division of assets in divorce – Frequently asked questions

Do pensions always have to be shared in a divorce?

Pensions are generally considered a joint asset and are often divided in divorce proceedings to ensure a fair financial outcome for both parties. That said, they do not always have to be shared directly. In some cases, one spouse may keep their pension while the other receives a larger share of different assets, such as property or savings, to balance things out.

What happens if we reach an agreement ourselves?

If you and your spouse can agree on how to divide assets, you can ask the court to approve a consent order. This makes the agreement legally binding and avoids the cost and stress of contested proceedings.

Will I lose my inheritance in a divorce?

Inheritances received during the marriage are not automatically included, but they may be considered if needed to meet financial needs, particularly those of children.

Can we divide assets without going to court?

Yes. Many couples resolve financial matters through negotiation, mediation, or collaborative law. Court involvement is only necessary if agreement cannot be reached.

How can AFG Law assist?

At AFG Law, we understand that the division of assets in divorce is about more than figures on a page. It is about your home, your financial security, and your future. Our family law team combines technical expertise with a compassionate approach, helping clients make informed decisions at every stage.

We can:

• Advise on how the law applies to your personal circumstances.
• Represent you in negotiations and court proceedings if required.
• Draft and secure clean break orders or consent orders to finalise matters.
• Work with financial experts where business assets, pensions, or complex property issues arise.
• Support you in achieving a fair settlement that enables you to move forward with confidence.

Every case is different, and our role is to listen, guide, and protect your interests. If you are concerned about how your assets may be divided in a divorce, speaking to a solicitor early can help you feel more in control of the process.

AFG Law’s family law team is here to provide the legal advice and support you need at this difficult time, helping you take the next step with clarity and confidence.

Contact AFG Law’s family department today by calling 01204 920106 or emailing familysolicitor@afglaw.co.uk for a free initial over the phone consultation.

AFG Law have multiple offices with family law teams in Manchester, including Stockport, Bolton, Cheadle and Bury. We can also assist clients nationwide with our family law services remotely.