Money, divorce and the wife by Mary Waring

ChequeIn this special guest blog, financial advisor Mary Waring examines the issues commonly faced by women going through a divorce.

If your husband has dealt with the family finances during your marriage then you may end up feeling fearful and overwhelmed when considering the financial issues surrounding divorce.

Let’s examine a few of the commonest myths surrounding divorce and money.

Myth: You aren’t entitled to a fair share of the assets

Don’t assume that if you have earned less than your husband that this will impact on your settlement. Women often earn less; either because they are a stay-at-home mum, or maybe the family finances don’t require them to work, or they do a lower paid/part time role due to child care issues.

Frequently women believe that if they haven’t contributed financially to the marriage that they will be entitled to a lower share of the joint assets on divorce.

But this is not the case. The court will base the settlement on the financial needs of both parties, especially the one looking after the children.

If it’s a short marriage, typically you will leave the marriage with what you brought in. But in a longer marriage all assets (and in fact all debt) are pooled and the aim is to divide this equally, as much as possible. This applies  regardless of who owns which assets.

Myth: Your husband will be financially penalised

Don’t assume that if your husband wants to end the marriage, or perhaps ended it with an affair, then the law will in any way punish him financially to your benefit. I often hear women saying “I want him to pay” for what he’s done.

But the law is not there to punish one or the other spouse. Its aim is to split the available assets according to each party’s needs. The court does not consider moral right or wrong:

If your husband has left the marital home, he will need to be rehoused. If there are children, he will need an appropriate sized property so that there is sufficient room for them to stay when they spend time with him.

Myth: You will always be able to maintain the same lifestyle after divorce

If you divorce, it’s very likely you will want to maintain the same lifestyle as you enjoyed during your marriage.

If there are sufficient funds to go round that’s likely to be possible. However, consider what will happen if there isn’t enough money. The same income that was being used to support one household during the marriage will now be used to support two households following divorce.

On this basis, maintaining the same lifestyle just may not be possible.

You must consider the joint finances. If there is not sufficient money for you to stay in the family home, the law will not support your desire to keep on living the same lifestyle.

Listen to what your family solicitor tells you. They have years of experience and can predict the likely outcome with some confidence.

Work closely with your financial adviser to see if it is possible to stay in the family home. Look at the various options, budgets, and what you can afford.

Myth: Keeping the family home is the best option

In my experience the wife often wants to stay in the family home and the husband wants to keep his pension intact. He views the pension as “his” money, compensating him for all those hours he put in at the office.

Staying in the family home can often be an easier option for the wife. In a period of extreme upheaval and uncertainty it can be really comforting to have some stability. It causes the least disruption and upheaval, not only for the wife but for the children too.

However, before you decide this is the outcome you want, you must consider the wider implications of being awarded the home and therefore potentially receiving no pension share.

Consider the income will live on when you retire, especially if your maintenance will cease at that point. There may be an option to downsize at a later stage, but do you know for sure that will release enough money for your needs?

Myth: Thinking you are a “common law wife

Frequently women who live with their partner without being married think they have the same protection as a wife.

Although we often hear the term “common law wife”, there is in fact no such thing in law.  It is a myth, and this is the case regardless of the period of time you have been living together and applies even when you have children.

After a separation your partner will need to provide financially for any children but there is no legal requirement for him to provide for you or provide a share of the wealth created during your relationship.

What should you do?

Getting to grips with finances during this very difficult and emotional time will often be challenging. But you only have this one chance to get the right settlement for you and your children. Work closely with your professional advisers to ensure you understand the implications of each of the financial options and choose the one that’s right for you.

Mary Waring is a Chartered Financial Planner specialising in advice to women going through divorce. Mary Waring She is also the author of “The Wealthy Woman: a Man is Not a Financial Plan”, due to be published on the 15th January. 

Photo by David Goehring via Flickr under a Creative Commons licence

Stowe Family Law Web Team

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18 comments

Steve - January 11, 2014 at 7:25am

“Listen to what your family solicitor tells you. They have years of experience and can predict the likely outcome with some confidence”. We all know in reality this never happens……

Marilyn Stowe - January 11, 2014 at 9:51pm

Dear Steve
If I am given a reasonable set of facts and figures at the first interview, I like to be able to answer with an opinion. It’s important clients know what is going to happen and how it’s likely to end up. They can decide what to do.
I advise “in the range” but it isn’t always possible because what you are told, sometimes just isn’t right and not only is it wrong but spectacularly wrong. Eg The ex is worth a fortune, when in fact it’s a lifestyle built entirely on credit, or the company is worth nothing when it turns out to be worth millions. So don’t just shoot the lawyer here:- the client has to be correct too.
Regards
Marilyn

Luke - January 11, 2014 at 2:45pm

“or maybe the family finances don’t require them to work”
====================================

I have never understood this, it seems to be our culture that it is socially acceptable if they choose for women with children at school to sit on their arse all day drinking lattes with their friends. Then if divorce occurs some women expect to be spoon-fed money.

Housework doesn’t take that long with the domestic appliances we now have – surely it would be more sensible to set up a small internet business or do an Open University degree in something that will help them become employed in the future – the options are endless with so much free time.

I am well aware that small babies are a full time job and that such activity at that time is unrealistic – but that doesn’t last forever and after that there is no excuse.

The following statement is also ridiculous:
=================================
“If you divorce, it’s very likely you will want to maintain the same lifestyle as you enjoyed during your marriage.”
=================================

Why ? Why would anybody in their right mind expect things to go on as though the marriage was intact ?

Divorced men know that is not going to happen (for a start they are likely to have limited contact with their children), so I don’t understand why women have such an unrealistic expectation.

JamesB - January 12, 2014 at 12:59am

I also didn’t like this article. In particular the suggestion that the court cares about the father or where he lives if there are children involved. In such cases he is just a source of income and capital for the children.

Steve - January 12, 2014 at 6:13am

Hi Marilyn So when a lawyer has all the fact and figures, is there an expectation that the lawyer should be able to advise on a possible outcome and not just wait for the final hearing?

Marilyn Stowe - January 12, 2014 at 8:27am

Dear Steve
Absolutely. That’s what the lawyer is supposed to do. The lawyer is supposed to give an informed opinion and as I say I like to do so, within the bracket. If a case can settle within a range then it’s probably worth settling to save the cost of continuing and the aggro.
Regards
Marilyn

Andrew - January 12, 2014 at 8:49am

As I have said elsewhere: the law should be re-written to make the aim to give both parties the same standard of living after the divorce as each other: if necessary with a Mesherised dealy. Equality of sacrifice.

JamesB - January 12, 2014 at 12:53pm

I agree with that Andrew. Indeed, I wrote the same to my MP about the clause which says if there is any doubt then the Judge should side with the party who has the children and advised him that it should be cancelled as it was doing more harm then good. Being an intelligent man he saw the sense in my argument and wrote to some minister and civil servant on that and saying he said he thought sounded reasonable given the bad publicity of family courts and F4J etc at the time.

The reply from the minister and department was. No. That was it, no argument at all. Was a woman feminist who wrote back as they seem to be in charge of such rules. Labour were in power at the time.

As Andrew says, and I agree, this (MCA 1973 law) needs to be changed, or pre nups legal and not too expensive for all.

Tristan - January 13, 2014 at 7:30am

Men, beware of marrying someone with no assets. A pre-nuptial counts for nothing when UK judges have clearly reserved the right to ignore them.

JamesB - January 13, 2014 at 10:56am

I heard something on the radio the other day that men are interested in women’s looks when choosing a partner and women are interested in a man’s money. Sadly, I think that is true. The love and romance don’t get mentioned much these days.

Marilyn Stowe - January 13, 2014 at 12:45pm

Dear James
So women are only after men for their money are they? Err….Plenty I could say to that one but wont.
Love and Romance aren’t dead you’ve just got to keep looking for the right one…
Regards
Marilyn

JamesB - January 13, 2014 at 11:03am

They are still important and relevant I suppose, but looking for them on a divorce law blog probably isn’t a good idea.

JamesB - January 13, 2014 at 5:31pm

I am trying to point out to myself and others that it doesn’t have to be all about that, or even mostly about that, although they are important.

Unfortunately (a lawyers word for “that’s the law, deal with it”) a lot of divorce is trying to get the most you can from the other person financially. Some of the posters on this site (myself included) can tend to think of the opposite sex as devoid of love and romance because of our experiences of this subject and the law doesn’t help with its insistence that there is no fault or rights for fathers.

JamesB - January 13, 2014 at 5:35pm

It is also easy to say that money is not important when you have some.

Like the John Lennon video where he is singing “imagine there’s no money” while playing on a grand piano bigger than my bathroom!

JamesB - January 13, 2014 at 5:37pm

Over twice the size of my bathroom. Check it out on youtube.

JamesB - January 13, 2014 at 5:41pm

I just want to make it clear to people, giving away your possessions to your ex is not a route to happiness in case anyone thinks it is a good idea or is what I argue for. I know someone – a chap – who did that and it didn’t make him happy. Quite the opposite indeed.

Still it can be nice to be with someone you like even if they are not rich or good looking. So, perhaps there is a chance for me and everyone yet :-).

I don’t know what my point is, just that divorce is only one part of relationships I suppose and it can be easy and wrong to lose site of that.

MaryF - January 31, 2014 at 7:05pm

I have a real problem that I need advice about – my lawyers don’t seem to know how to handle it. Myself and my husband built a holiday home outside UK jurisdiction several years before divorce. Unbeknownst to me, my husband did not put my name on the deeds although he said he did. Now he says the property is 100% his and I get nothing. My lawyers say it will go into the matrimonial pot, however I have already lost one home (I left the marital home with my children due to abuse) and am keen to hold on to this one. I have strong family links with the location too. Can you advise? Thanks

Marilyn Stowe - February 1, 2014 at 8:45pm

Dear Mary
The court will deal with all assets. But why don’t you trust your lawyers? If you aren’t happy tell them! And if they don’t tell you what they are going to do and why, and what is likely to happen and you aren’t convinced by them, change them. Don’t sit and worry writing to a stranger on a blog. It’s your case, and you need to be talking to your lawyers and trusting them to get you a result.
Regards
Marilyn

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