Are you either expecting — or already going through — a difficult separation? If so, have you considered what will happen regarding your divorce and the family home?
Divorce and separation is one of the most challenging and stressful experiences you can go through. Amidst this already difficult time, practical decisions must be made regarding shared assets, finances, and living arrangements of children and other dependents. Amongst this, what will happen regarding the family home is one of the most significant decisions to be made.
This is because, not only is a residence usually the highest value asset (unless there is a family-owned business), it is also a place with explicit ties to cherished memories with loved ones, making decisions regarding what will happen particularly hard.
This blog will guide you through the key considerations of a divorce and the family home. We will include details as to how property is divided in a separation, the financial implications involved, as well as how children are involved in the process. We are here to help you make better informed decisions for yours and your family’s future.
How UK Law Affects Divorce and the Family Home
A prenuptial agreement can set out what should happen to the family home in a divorce — and this might be conclusive — otherwise, it will usually be considered a marital asset, meaning it may be subject to division upon separation. However, the Matrimonial Causes Act 1973 highlights the factors that must first be considered before a decision is made, to ensure the fairest possible settlement is reached.
These factors include:
- Financial Status: What the financial needs, responsibilities, and obligations of both parties are.
- Standard of Living: The quality of life both parties enjoyed prior to separation is also relevant.
- Child Considerations: How the welfare of any associated dependents would be affected by the separation.
- Earnings & Assets: The income, earning potential, and current financial resources of both parties (at the time of the separation and throughout the relationship) will be taken into account.
- Health: A disability or serious health issue could affect the settlement.
- Contributions: What extent the contributions each spouse made to the marriage. This can include both financial and non-financial contributions.
- Safety Concerns: In situations of domestic violence, if the victim feels frightened, then the courts can grant protection to prevent further harm. It can regulate occupation of the family home for parent and children. Domestic violence includes:
- Threats
- Actual violence.
- Intimidatory behaviour.
- Coercion.
- Controlling behaviour.
- Needs: The court must also look at the needs of both parties. Housing needs are often seen as having more importance than most other factors.
Understanding these factors can help you anticipate how the court might approach the property division process.
Understanding Your Rights and Options for the Family Home
When it comes to divorce and the family home, there are some important questions you must answer before decisions regarding how the property is handled can be made, including:
- Is the property jointly owned or solely in one person’s name?
- Are there any under 18 children involved in the relationship?
- What are the financial circumstances of both parties?
As highlighted above, in most cases, the family home will be considered part of the marital asset pot and therefore may be subject to division. However, the separation process is very rarely straightforward. Below are some of the most common options when it comes to what will happen to the family home during divorce.
1. Selling the Home and Splitting the Money
Selling the property is often the cleanest solution, allowing proceeds to be divided between parties. This split may be equal, or decided by the court — which considers all relevant factors. If an equal division meets the needs of both parties, and any children, it may be appropriate. If not, and no agreement is reached, the court will determine the outcome.
For example, if the home is sold for £300,000 with a £100,000 mortgage, the remaining £200,000 could be split according to an agreement or court order.
While this option provides the least messy situation between the spouses, it can be made significantly more complex if young children are involved.
- Pros: Clears joint financial obligations while providing immediate liquid assets which can be put to help both sides find alternative living arrangements.
- Cons: May disrupt children’s stability. Could also lead to a potential financial loss if the market is unfavourable at the time of sale.
2. Buying Out Your Spouse
It is possible for one party to keep the home for themselves if they buy out the other’s share. For instance, if the home is valued at £250,000 with a £50,000 mortgage remaining, the buying spouse will be required to pay such amount as they can agree, or as the court orders. This may involve:
- Paying half the equity value — unless a different split is agreed.
- Taking on the existing mortgage in full, releasing the other party from liability.
- The buyer obtaining a new mortgage in their sole name to fund the buyout.
- Agreeing to pay the other party in instalments (with or without interest), if full payment isn’t possible upfront.
This process will not be feasible for everybody. This is because, in order to purchase the other half of the property, you may be required to refinance solely in your name. The viability of this will therefore depend on income, finances, and creditworthiness. With poor credit or limited savings, you would be highly unlikely to be in the financial position to buy out your spouse.
- Pros: Maintains some stability for dependent children who can remain in their home. One party is also able to retain a high-value asset, while the other receives a substantial payoff to help them in relocating.
- Cons: Will require refinancing, or significant financial resources which may not be available to most.
3. Postponing the Sale (Mesher or Martin Orders)
In some scenarios, the court may order to delay the sale of the home until a specific event has occurred. This is known as a Mesher Order. Situations where this may be relevant include:
- Completion of Education: The court may order any property sale to be postponed until a child has the opportunity to finish education (usually either secondary school or university). This is done to provide maximum stability during their studies.
- Spouse Finance: If one party cannot afford alternative accommodation, the court may order the sale delayed for a fixed period, or until stated triggering factors occur (youngest child turning 18, completion of education, the occupying party remarrying or cohabiting with a new partner, etc.).
- Outstanding Obligations: if there are any outstanding financial obligations, such as debts or mortgage payments, that need to be resolved prior to selling, the sale may be delayed in order to avoid additional financial complications.
- Health Issues: When one spouse or a child is dealing with a serious illness, the court may postpone the property sale to maintain continuity of care.
Alternatively, a Martin Order allows one spouse to remain in the home for life, or until they remarry, while the other retains an interest in the property. This is normally the case when the other spouse has no immediate need for capital in order to rehouse themselves.
- Pros: Can provide some level of stability for dependents or a spouse.
- Cons: Ties both parties to the property longer than desired. A Martin Order can also have adverse tax effects for the non-occupying spouse.
4. Transferring Ownership to One Party Outright
The court may transfer the property to one spouse, often the primary caregiver of the children, without an immediate financial exchange.
Financial Remedy Orders are legally binding court orders under the Matrimonial Causes Act 1973 (or the Civil Partnership Act 2004 for civil partners).
- Pros: Orders provide legal protection against potential claims post-separation.
- Cons: Some level of ongoing financial cooperation between spouses may be required, which can be difficult during a less-amicable separation.
Financial Considerations When Dividing Property During Divorce
Before deciding on the family home’s future in divorce, it is vital to first assess the property’s remaining equity (value minus outstanding mortgage and notional sale costs). Another key consideration includes mortgage responsibility. If one party were to take full ownership responsibility, they may have to take on the existing mortgage in their name, or seek a new mortgage completely. Sometimes, the property can be transferred subject to the existing mortgage. Lenders will assess income and affordability before approving either method.
Additional costs to consider when dividing property during divorce include:
- Legal fees for divorce and property settlement.
- Land Registry fees and search fees.
- Fees owed to estate agents for assisting in selling the property.
Prioritising Children’s Needs in Property Division
When dealing with divorce and the family home, prioritising the children’s best interests and ensuring they have stable living arrangements is most important. Courts often prioritise stability for children, which can influence decisions about whether to sell the home or allow one parent to remain in it.
The best interests of your children should be seen as the most important thing during a divorce. Poor handling of a divorce could cause issues for young children which can have a knock-on effect for their lives for years to come. If you’re unsure how to balance your children’s needs with financial and legal considerations, seeking advice from a family law expert can help.
When Should You Seek Legal Advice?
While the purpose of this blog is to provide an overview of what to expect when it comes to divorce and the family home, every separation is unique, and the legal process can be complicated. Are you unsure about your rights, the process to fairly divide property, or how your children’s needs should be taken into account as part of the process? Professional support from an experienced family law solicitor is recommended.
A solicitor will be able to:
- Offer you some clarity on your legal rights and best available options.
- Assist you in navigating the numerous legal and financial complexities that come with dividing property during a divorce and separation.
- Ensure that the needs of your children are prioritised at every stage of the process.
Are you facing a divorce and need support? Don’t hesitate to reach out to WHN Solicitors’ team of trusted legal professionals.
Divorce and the Family Home: Expert Guidance for a Fair Resolution
When it comes to divorce and the family home, both financial and personal factors must be considered. Whatever scenario you are in, exploring what your rights and available options are will empower you to make the most informed decision possible — one that can ensure the fairest possible resolution and bring a difficult period to a close.
Are you navigating a divorce and concerned about what will happen to the family home or any other high-value asset? Contact our experienced family law team today. At WHN Solicitors, we are on hand to help you navigate this challenging process with the utmost empathy and expertise , providing solutions tailored to your situation.
For assistance, feel free to reach out to David Connor at [david.connor@whnsolicitors.co.uk] & [01706 232039], or get in touch with Stephen Pinnington at [stephen.pinnington@whnsolicitors.co.uk] & [0161 761 8079].
