The division of assets including income, properties, savings and insurance of a divorced couple is a complicated issue. The best solution is to have the couple coming up with an acceptable division after negotiation between themselves. However, if the couple could not reach an agreement, it has to be taken to court. In this way the assets would be distributed according to reasons, which means the assets may not be directly divided into half.

Encumbrance would occur in the case of proceedings of divorce

When a divorced couple seek legal proceedings to solve division of assets, the law firm would register a “Notice of intention to proceed an application for ancillary relief” on the ownership of the properties of both parties. The registration would be shown on the Land Registry records, which means the properties could not be sold nor rented out unless both parties agree to do so. The income earned through selling or renting out the properties would be temporarily stored by the law firm until the case is closed.

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Asset division based on principle of fairness

A lot of people believed that the assets would be divided into half during a divorce proceeding. But it is not that easy as it involved a judge to hear the case. In fact, the judge would consider various reasons to divide the assets:

• Current and foreseeable future salary, assets and other sources of income of both parties
• Economic needs and burden of the two parties
• Standard of living of both parties before a divorce
• Would there be any physical or spiritual disability of any parties;
• Contribution to the family welfare including taking care of the family members

Therefore, if the children originally live with the wife, the court would usually distribute the property to the wife instead of the husband to maintain reasonable living standard of the children.

Property under one party’s name could also be distributed

The sole owner of a property might believe it would not be redistributed after a divorce. But it is not the case. In a divorce, all assets and properties held by both parties, be it solely owned or co-owned, would be considered family assets by the court. Therefore, even if the property is owned by just one party, the other also has the right to request a portion of the rights.

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Three situations could occur when the court requests the property to be transferred from one to another party. First, the property ownership could be solely owned by one party. Second, if the court believes the value of the transferred property exceeds the total value one party is entitled to, he/she may need to pay certain amount to the other party as compensation. Third, if the transferred property is still under mortgage, and both parties are unable to repay the mortgage loan, it is necessary to obtain the mortgagor, e.g. the bank’s consent before the transferal. The owner of the property has to bear the responsibility of repaying the remaining mortgage loan.

Payment involving a third party

In some occasions, the property involves payment of a third party when both parties bought the property, for example, the property costs $6 million, the first instalment is $2.4 million and the husband’s mother paid $1.2 million. Upon divorce of the couple, the mother would receive the relevant portion of the rights or money she held. The portion would not fall into the pool of assets to be distributed by the couple.

Asset distribution after divorce is not simple. You are advised to consult a lawyer who is familiar with relevant regulations. Click here to consult our professional customer service team!