Richard Kershaw discusses how the courts will apportion assets of a divorcing couple in the FTAdviser

Richard’s article was published in the FT Adviser, 25 February 2020, and can be seen here.

Richard Kershaw, Partner in our Family & Relationships department, examines how courts approach the division of assets on divorce, particularly the contentious issue of whether a financially weaker spouse should be required to use their capital award to meet ongoing income needs.

The principle of non-discrimination between breadwinner and homemaker, established in White v White, underpins the law, but its application varies. While matrimonial assets are typically divided equally, the court may adjust this based on need, pre- or post-nuptial agreements, or other exceptional circumstances.

Maintenance may be awarded if one party cannot meet their needs through income alone, but the question remains whether they should also be expected to deplete their capital.

Judicial opinion diverges on this point. Earlier cases like Lambert v Lambert [2002] and Vaughan v Vaughan [2010] supported a flexible approach, allowing the financially weaker party to preserve capital in some circumstances.

In Waggott v Waggott [2018], the Court of Appeal endorsed limited amortisation of capital, reinforcing the need for case-specific decisions. However, in CB v KB, Mr Justice Mostyn took a stricter stance, asserting that capital should be used to meet needs, challenging the prevailing flexibility.

Critics argue this risks reintroducing discrimination by failing to account for the homemaker’s contributions and the long-term financial imbalance that can result when one party retains earning capacity. The debate continues, with future judgments likely to shape whether flexibility or a firmer rule becomes the norm.

Read the full article on the FT Adviser website [external link].