You may have heard that half of all marriages end in divorce. This is now an outdated statistic but is still pretty close to true. In the US divorce rates fluctuate each year (with 2018 at 37% and 2019 at 42%) but average out with around 40% of marriages end in divorce. The figures are roughly the same in the UK as well. This means that almost half of couples who enter into marriage will someday need to settle a divorce. Considering how likely this is it is surprising that so many couples don’t consider these aspects when they get married or plan for them. Here we provide some basic assistance in the best approach to splitting property and assets during a divorce.
Of course, it is obvious why people don’t mention divorce when they are getting married. It is a romantic time and you don’t want to go from asking the love of your life to marry you one day to subtly mentioning the 40% chance it won’t work out and how you would like to protect your assets in that eventuality. There is no Hallmark card for that. Yet the number of couples that are using prenuptial agreements before getting married is growing strongly and shows people are becoming a little more pragmatic in their approach to marriage. The good news is that marriage rates are improving too. The percentage of successful marriages is increasing so you may never need to split assets in the future.
Marriage success rates are improving because people are getting married later in life. In the past, marriage was done at a young age as it was seen as important to marry someone early for life security and to start a family. Today people are happy to live together and have kids together without marriage so the need for this act has lowered. Instead, people usually get married now when they want to show how happy they are and all that they have achieved together.
Yet if it does come to divorce you should know how to split assets. While it can be settled in court this usually works out as expensive for both parties and should be avoided if possible. If you signed a mortgage together you are legally bound to pay it so you must ensure that you work out which party will pay what amount and how it will be carried out. It is usually best to remove the need for communication between both parties because as life goes on you may want to move on and away from that relationship as much as possible. Try to remove any necessary reasons to keep in touch. This may mean selling a number of assets at a lower price but in the end, it will work out better.
Depending on the difference in income between the two spouses, one spouse may have to support the other for a long period of time. This can be a strange requirement of a couple and is something you should keep in mind when getting married. While a wedding is expensive the bills will keep coming even after divorce. Sharing gifts between spouses comes with no tax but sharing gifts between ex’s does. This means that you should be really clear on what you are dividing before splitting to avoid any unnecessary charges.
It is always best to get legal advice to help with these proceedings. As a guiding line, most solicitors say that couples that have been together for over ten years, end up splitting things 50-50. If that doesn’t sound fair to you, start thinking about that prenuptial agreement today.