Here are some of the common misconceptions about Finances and Divorce that we hear frequently along with our answers to help demystify some aspects.
Most people going through a marriage or relationship breakup will experience a whole raft of complex emotions and there are few who relish the legal part of the process. We recognise the legal process is daunting for most and so here set about examining some of the more common misconceptions about finances and divorce that we hear frequently, in the hope that at least some aspects can be demystified:
Myth “We were married in England and so must divorce there too”
You will be able to divorce in Scotland if either yourself or your spouse have lived here for the last six months. It may also be possible for you to divorce in Scotland if you do not have a permanent residence in any country at present, provided you retain a permanent attachment to Scotland and intend to return to reside here permanently. This might well be applicable if you are temporarily working overseas but intend to return here in the foreseeable future. There are significant differences between the financial regimes applicable upon divorce in Scotland and elsewhere in the UK and so we strongly recommend that you take advice to find out if you have a choice about where to divorce and if so which regime is most advantageous to you.
Myth “We aren’t married but I am protected as a common law wife”
There are some limited circumstances in which you might be entitled to financial claims as common law wife. This will only be possible if you were believed by your friends and family to have been married as opposed to having been living together.
If you have lived (openly unmarried) with your partner as if man and wife, as is more common, then upon separation you have one year within which to make a financial claim. However, you do not have an automatic right to fair sharing of your partner’s assets or support from income as you might have done were you married. Rather, you are entitled to financial compensation provided you can show either 1) that you have been disadvantaged in the interests of your partner and/or your family together and that your partner has in turn benefited financially as a result of your contributions or 2) that you are entitled to financial provision for any future burden of caring for children of the relationship.
Myth “If I move out of the family home it will affect my rights”
If you own the family home jointly with your spouse or partner then you will retain the right to move back in if you wish for so long as that property remains in your joint names.
If your spouse owns the family home then you will retain the right to move back in for a period of up to two years after moving out. If you are not married then you have the option to apply to court to have occupancy rights declared for a period of up to six months at a time.
Myth “Keeping the family home instead of making a claim on the pensions is the best deal”
If the net value of your family home is the same as the value of your husband’s pension then offsetting one asset against the other like this is a neat solution. However, it might not provide you with the best outcome and you should consider your other options carefully. Firstly, you need legal advice to make sure the pensions have been valued correctly. The cash equivalent transfer value of each fund, including the state earnings related pension fund, that has built up during the period of marriage will be taken into account. Once you are sure you are using the correct values for the pensions you should consider your ability to support yourself from income upon retirement, taking into account any capital you may be able to raise by downsizing the family home. Pension sharing orders that give a clean break settlement are possible. A pension sharing order allows you to claim either a fixed sum or a percentage share of your spouse’s pension. Depending on the scheme, a pension share may allow you either shadow membership of certain occupational schemes or a transfer of pension funds into a personal pension of your own. Expert advice is important even more so if there is a choice of pensions to take a share from as not all pensions perform as well as others. Pension Earmarking Orders offer another option. Earmarking attaches the lump sum part of the pension. They are less popular in practice than pension sharing mainly due to the lack of clean break offered by this option.
“My wife committed adultery and so will be penalised financially in the divorce”
This is a common preconception but has no relevance to your respective financial claims upon divorce. Generally speaking, your spouse’s behaviour will not be relevant to your financial claims unless in special circumstances where they have acted in bad faith financially such as destroying or concealing assets. If your wife is living with a new partner who is able to contribute financially to the running costs of their new home then this is likely to reduce the amount of any spousal support you may otherwise have to pay her from your income each month.
bto Family Law experts are dedicated family lawyers specialising in helping you with divorce, separation and any aspect of family law, in Edinburgh and Glasgow, Scotland.