Section 25 Factors

What Are S25 Factors (section 25 checklist)?

Section 25 factors are part of the law that the judge uses to help him/her decide how a couple should split their assets when they get divorced.

They are called section 25 factors because they are set out in section 25 of the Matrimonial Causes Act 1973.

What Does Each of the Section 25 Factors Mean?

There are 8 items listed as section 25 factors:
1. Income, Earning Capacity, property and Financial Resources;
2. Financial Needs and Responsibilities;
3. Standard of Living;
4. Age of each party and how long their marriage lasted;
5. Physical or mental disability of either of the parties;
6. Contributions which each of the parties has made;
7. Conduct of each of the parties;
8. If the divorce will mean you will lose the chance of getting a certain benefit.

Let’s look at what each factor means:

Income, Earning Capacity, property, and Financial Resources

What the court needs to know: When deciding your financial settlement, the judge will want to know:
• What you both currently earn,
• What you both can earn in the future (by retraining or getting a job),
• What assets you both have (house, cars, savings, stocks and shares, and pensions), and
• What debts you both have.

How Will Court Use this Information to Decide Your Financial Settlement: Knowing information about your income and assets will help the court to know what you both have so that they can decide how to split these things fairly.

• How much you earn will help them to decide whether you will have enough money to pay your bills and maintain your house.
• What you can earn in the future will help the judge to decide whether you need financial support or not i.e. if you are able to get a good job immediately, you might not need any support, whereas if you need a few years to retrain or if you have child-care responsibilities for the next few years, you might need spousal maintenance to cover you for the next few years.
• Knowing what assets, you have will help the judge to see what you have and how to split it all so that you both have what is fair. The judge will also see if the person needing maintenance can have more of the assets instead.
• Knowing your debt level will help the judge to take this information into account so that the order is fair. Many times, you will see one person with all the debt in their name when in fact the debt belongs to both parties so the judge needs to allow for this and decide how the debt should be dealt with.

Sometimes people argue that they should get 100% of certain assets because they bought them before marriage or after separation out of their own money. There are no general rules about this and what the court will do depends on your situation. For most middle to low-income families with few assets, the court will not pay much attention to when an asset was bought, because their aim is to make sure both parties can have a house and pay their bills and they will not be able to meet this aim if they start excluding certain assets

Financial Needs and Responsibilities

What the court needs to know: The court will need to know what your financial needs and obligations are:

• Financial Needs:
  • Housing Needs: you will generally need to tell the court what size of house you need to live in, the area and how much it will cost for you to buy it and to continue to pay the bills.
  • Income needs: you will usually write a list of all our outgoings so you know the amount of money you will need each month. Income needs includes a need for income in retirement.
• Financial Obligations: In terms of financial obligations a judge would also take existing financial obligations into account, for example, to pay child maintenance to children of the family or for other children.

How Will Court Use this Information to Decide Your Financial Settlement: The court will use the information about your financial needs to decide how the needs of each person can be met from the assets that you both have. In the majority of cases, there aren’t many assets so the court’s main aim will be to provide a home and enough income for you both -although priority will be given to the person looking after the children on a full-time basis.

Standard of Living

What the Court Need to Know: The court will want to know what the standard of your life was before you separated. You can show your standard of living through these details:

• How much you spent each month on living expenses;
• What sort of car (if any) you drove;
• How often you went on holiday as a family and where to;
• How often you went to restaurants and where;
• Whether your children go to state or private schools.

How Will Court Use this Information to Decide Your Financial Settlement: The courts will look at lifestyle the couple had together and see whether the assets can be split in a way so that they can continue to enjoy the same lifestyle, as far as possible, after divorce. However, in most cases, this is not doable because the assets and income usually won’t stretch far enough to cover two separate households. In that situation, the court will expect you to adjust your lifestyle accordingly.

Age of Parties & How Long their Marriage Lasted

What the Court Need to Know:

• How old you both are
• How long you were married for
• How long you lived together as a couple before marriage

How Will Court Use this Information to Decide Your Financial Settlement:

Your age will play a role in how your finances are split:

• If you are both young, there is a greater chance that you can go back into work argument, therefore, you will not need to rely on spousal maintenance. Younger people will be expected to go back to work and become financially independent quickly especially if there are no children from the marriage. You will also have more time to build up a pension for your retirement.
• If you are older, you are not be expected to find a highly paid job or any employment if you have spent the large part of your life in the home. It may be difficult for older parties to get a mortgage or build up a pension as they do not have much more time left in service.

The length of your marriage is also something the court will look at:

• If you lived together as a couple before marrying, a judge is likely to add that period of time to the length of the actual marriage. So, the marriage will be considered to be longer.
• The longer you were married, the more difficult it is to untangle your finances especially as they are more likely to be financially reliant on each other. The judge will want to share your finances equally even if the assets were bought property before you married – this becomes more irrelevant depending on how long you were married.
• If your marriage was short and you had no children, the traditional view is that you should walk away with what you bought into the marriage. It is less likely in a short marriage that a judge will share out your money and property equally. If on the other hand, you have children together, the fact that your marriage was short will not be that relevant.

Physical or Mental Disability

What the Court Need to Know:

Whether either of you has any mental or physical illness which affects your ability to earn a living or to provide for yourself. The court will need a medical report to support any illness or disability.

How Will Court Use this Information to Decide Your Financial Settlement:

• The court will decide whether the person with the mental or physical illness needs a greater amount of the assets and income to meet their needs.
• This will raise the question of whether the person with a mental or physical illness needs maintenance payments.

Contributions which each of the parties has made

What information the court will need:

• The contributions which each of you made or you are going to make in the near future(i.e. future care of children) for welfare of the family.
• Contributions include financial contribution (the money you brought into the family) and any contribution by looking after the home or caring for the family i.e. the children from the marriage.

How Will Court Use this Information to Decide Your Financial Settlement:

• The court will accept the role of the homemaker just as much as the person who built up the assets and earned the money. So if one person has gone out to work they do not get more of the assets than the person who stayed at home to look after the children.
• The court will see if one person should get a higher share of the assets because of their ‘special’ skill set. This is rare and only usually applies in exceptional cases.

Conduct of each of the parties

This factor is something people often misunderstand. They often feel that the fact that their husband or wife’s conduct during marriage is relevant. It is not. The courts expect that either party to a divorce will behave unpleasantly, unpredictably or with a certain amount of negative emotion. This behaviour does not generally concern the court’s consideration of the case.

Conduct of the parties is only considered in very serious circumstances i.e. where one person tries to hide assets or removes money out of the country to stop their partner from getting a share.

If the divorce will mean you will lose the chance of getting a certain benefit

The judge will look at the things that you are no longer going to benefit because of your divorce, for example, money from your ex’s pension scheme if they die before you.

Are some section 25 factors more important than the others?

No. Each of the s25 factors is equally important for the courts but some may be more relevant in your particular case then others For example there might not be any issues of conduct in your case so the judge will not need to look

Are section 25 factors the only things a judge looks at?

Whilst section 25 items are some of the main things the court will look at, but they are not the only things the judge looks at. The judge will make sure they look at your full situation especially if you have children who are under 18. The judge will want to make sure they have a home to live in and that there is enough money to pay for their needs.

They will also try to make sure the settlement is fair but remember that does not mean they will split everything 50/50.The judge will first want to make that your children and the person with their full-time care is looked after i.e. they have a home and enough money for bills and mortgage to be paid.

How should I use section 25 factors when I am negotiating my settlement?

Ideally, you should negotiate your settlement with each other which is fair to you both without worrying too much about what s25 factors are. When negotiating you should have some basics in mind:

• Don’t mix your emotions with your financial negotiations
• Don’t use the financial negotiations to try to punish your ex for what happened during your marriage.
• Don’t think you should get more because your ex is to blame for the marriage break up – on the flip side, don’t feel guilty into giving everything away either.
• Look at the settlement from both perspectives – not just your own.

If you need help working out how to split your property and money contact me on 07967 012 006 for a friendly chat about your options. You can also email: sl@divorceconsultants.co.uk   or complete an Enquiry Form Below

This article is for general information purposes only and does not constitute legal advice.

“Call Sonia Limbada. Trust me. You won’t regret it.”PETER