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11 Aug 2022

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Marriage breakdown - Divorce - Who gets what? by Lynch Solicitors

Marriage breakdown - Divorce - Who gets what? by Lynch Solicitors

Marriage breakdown - Divorce - Who gets what? by Lynch Solicitors

When a couple separate or divorce, how is it decided what assets each are entitled to?

This could be done in two ways:

1. By the parties agreeing between themselves as to what each will take from the assets available. If no agreement can be reached, there are options like mediation that may assist;
2. If ultimately the parties cannot agree, then the matter will be brought before the courts and the Judge will decide (this option takes control away from the parties)

How does a court decide?

In dealing with the breakdown of a marriage, the courts will look to make "proper provision" for the parties involved. Their overarching aim is fairness and justice. The Court will consider a list of criteria and arrive at the asset or financial split based on these criteria.

These criteria include:

1. The income, earning capacity, property and other financial resources which each of the spouses concerned has or is likely to
have in the foreseeable future;
2. The financial needs, obligations, and responsibilities which each of the spouses had or is likely to have in the foreseeable future (whether in the case of the remarriage of the spouse or otherwise);
3. The standard of living enjoyed by the family concerned before the proceedings were instituted or before the spouses separated, as the case may be;
4. The age of each of the spouses and the length of time during which the spouses lived together;
5. The physical or mental disability of either of the spouses;
6. The contributions which each of the spouses has made or is likely in the foreseeable future to make to the welfare of the family, including any contribution made by them to the income, earning capacity, property and financial resources of the other spouse and any contribution made by either of them by looking after the home or caring for the family;
7. Any income or benefits to which either spouse is entitled by or under the statute;
8. The conduct of each of the spouses if that conduct is such that in the opinion of the Court, it would in all the circumstances of the case be unjust to disregard it;
9. The accommodation needs of either of the spouses
10. The rights of any other person other than the spouses but including a person to whom either spouse is married.

Does separation or divorce really mean the end?

While the formalising of Separation will recognise that a couple is no longer living with one another as husband and wife and a divorce will legally end a marriage, there are some limited cases where any division of assets that has taken place in doing so can be re-visited and varied. Maintenance is an example of this.

Is a clean break a reality?

There is no provision for a "clean break" in Irish family law legislation.  However, the Courts have accepted that there is a
principle of law that supports any effort made by the Courts or parties to arrive at finality or closure, wherever possible. This is
particularly true in a break-up where there are ample resources to cater for both parties (and their dependents) needs.

What if there is a change in circumstances?

What then, if an agreement or court order is made and one or other of the parties finds themselves in a situation where their financial position after the matter has been finalised changes so that the terms entered into now affect them very differently down the road? (for example, if assets divided were to significantly reduce in value or one party was to earn much less etc.) 

When this situation came before the High Court on two occasions recently and the courts have taken the view that unless the change that has occurred makes the previous terms impossible to comply with, they will be very reluctant to alter what was intended to be the final settlement.

Recent cases provide those who have entered into Judicial Separations and Divorces some certainty, in that the terms which result will seem to stand unless there are exceptional circumstances that would make it unjust and unfair for them to remain.

Is it better to agree if possible?

The Courts have expressed support for the notion that couples can make an agreement between themselves as to how they wish to deal with the break-up.  Any such agreement should be given significant weight should either of the parties later wish to re-visit the matter.

This is particularly important if the couple at the time of coming to the agreement had specified that it should be final.
The courts then will usually only get involved to alter the situation if such agreement does not "properly provide" for one party or if the circumstances of one or other of those involved has changed dramatically.

In a similar vein, the courts have indicated that any windfall or wealth that one party gets after the couple's relationship has formally ended or, very importantly, assets which were inherited by one party should not automatically be open to a claim by the other unless they were involved directly in obtaining same. Any such assets, however, may be considered relevant to the "proper provision" criteria.

Is it possible to protect assets in a divorce?

One of the ways people can try to do this is by having a pre-nuptial agreement setting out how the parties will divide their assets and deal with their finance upon Divorce or Judicial Separation.

While an Irish couple is not prevented from signing a pre-nuptial agreement in Ireland, the Irish courts are not obliged to enforce such agreements if the couple's relationship later breaks down.

It is a rather grey area and it remains to be decided as to what impact these agreements have where the parties separate.

However, it can be said that a well-drafted pre-nup agreement that makes proper provision for the parties will both concentrate minds and be unlikely not to influence the approach of the Court.

Afterthought

There are a number of general observations that can be made:

  • A prior Settlement with a "final settlement" clause, whether by Deed or Consent, will only be varied in the most acute
    circumstances of change;
  • If the terms of a break-up have already been dealt with by a Court in judicial separation proceedings, a Divorce Court is unlikely to allow, what is called, a "second bite of the cherry".
  • Substantial change (as in illness) needs to exist to justify an application for further provision. If there is no change, there is no new provision.
  • Inherited assets or windfalls are not to be treated as assets of the marriage and have a special status.
  • As a general rule, the Courts favour a 50/50 split unless there are surplus assets.
  • Where there are surplus assets, the Court does not consider that its job is to divide wealth – each case is looked at on its merits.
  • If a case is being made that a non-working spouse is capable of taking up employment or becoming self-employed, this has to be proven by the other spouse.

For further advice or if you wish to discuss any other legal area please contact reception@lynchsolicitors.ie or telephone 052 6124344.

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