Such a seemingly simple question, but not such a simple answer.
The answer is that the division of assets depends on lots of different factors, as there are often many
variables at play during a separation or divorce.
You might say that, if I said it was a simple formula, I would be out of a job.
Fair point and some of that has been addressed here, but I will attempt to explain
this division of assets from my perspective as a family law solicitor, using
comparisons with other assessments that we encounter in life such as buying a
house or business.
Simple question, “How do you value a house?” Well, anybody who has looked for a
house in a specific area will tell you that you can make a pretty accurate guess from
some basic research. We try to find something almost exactly like our house and
then check myhome.ie or equivalent for a number of months, look at the property
price register, and see the actual sales in the area. We can then, based on the
current market, give a reasonable guess within €20k what the house will sell for. This
is an open market.
What about valuing a business? This is something most people will never encounter,
but to enlighten you, it is far more difficult for a number of reasons. The first answer
is the same as the house, “What is someone willing to pay for it?” But how to come
to that answer, can I look at the business price register? There is no such thing and
each business is like a snowflake i.e. unique. Different types are worth more than
others, eg. restaurants are notoriously unpredictable so don’t sell for very much i.e.
2x profits, whereas software businesses are very sellable and can go for 15-20 times
profits. In most cases, there are an infinite amount of variables to take into account.
If I went to two different business valuers I could receive a huge difference in
valuation price.
So simple question:
How do you value what you are entitled to upon the breakdown of your marriage?
Does it lie in the simplicity of valuing a house or the more complex process of a business?
It is almost certainly closer to the business process because of the variables that are involved in separation and divorce.
Of course, I can provide the simple answer that upon the dissolution of the marriage, the court will assess the entire pool of assets of the couple: be it pensions, physical property, bank accounts, foreign property, etc.
Then it will seek to divide it between both spouses to ensure that they are both adequately provided for going into the future.
If there are children of the marriage, their interests are to be considered paramount.
Clear as mud. The best way to explain is to dive into the detail of your individual situation and look at it as a judge would, i.e. from a 30,000- foot view.
This is why the process begins with essentially gathering an exact summary of everything the couple owns, what income comes into the house and how is it spent?
So that means every bank statement, every P60, every pension scheme detail, every folio number needs to be provided so that everyone is agreed that this is the family “Pot” that will be divided. The Court can only make orders upon the basis of the “Pot.” They can’t infer that one of the parties has unidentified
income or assets if no evidence exists.
We have a ‘no fault’ divorce system in Ireland so, by and large, spousal behaviour does not come into the judge’s decision. Instead, the judge has to balance the various assets each party has. He may keep his pension if she takes over the mortgage on the family home, and she will keep the mortgage.
As an example, the main question in many cases is this:
Who gets the Family Home in a Divorce if children are involved?
The question of who gets the house in a divorce again depends on multiple factors the age of the parties, ages of children, amount of equity in the home, the ability of each party to raise a mortgage, each person’s personal assets.
Very simply put, if there are children of the marriage, the court is rarely going to order the sale of the family home in a divorce. The ages of the children are a factor for the simple reason that the house can be sold when the youngest reaches 18 (or in full-time education up to the age of 23). So if the
youngest is 4, does one party wish to stay on a mortgage for the next 19 years and
leave their ex-spouse in the family home? How likely is it that said spouse would get a mortgage while being a party to another one? What’s the solution if she cannot get this on her own? There may be no simple solution with regard to the mortgage.
This is just an example of some of the real-world issues that arise when advising a person involved in this process. What if one of the parties is due to inherit money or inherits money in the meantime? Should this be part of the “pot” or not? Maybe or maybe not. A lawyer argues the point from their client’s point of view. The Solicitor for the other party will argue this point from their point of view and there is a
negotiation.
Like any job or profession, there are different qualities of family law solicitors and different styles so without knowing your opposite number it can be very difficult to predict whether an agreement is possible. If the issue cannot be agreed upon, then a judge decides.
But surely this brings clarity and precision to deciding every issue in the debate? Sorry to break your
illusions, but judges are mortal flesh and blood human beings just like the rest of us.
They are not an algorithm. The Law gives them wide discretion so naturally, each
judge’s biases and general views of the world come into play when they decide cases.
Yes, it can be helpful to have experienced family law practitioners who have argued innumerable cases before the judge to provide a form guide, but it can still be difficult to predict and one never knows which judge one will draw on any given day.
So to conclude, I think it is clear that determining how to divide assets in a divorce in Ireland is no simple task. It’s certainly not as simple as valuing a home but not as opaque as valuing a small business. The key is to honestly value the family “pot” of assets, and try to think of the practical situation of looking 10 years into the future of the family.
Nearly everyone sees the situation from their own point of view.
One spouse sees that the large, secure, monthly pay cheque that has been coming into the house is leaving and she faces an uncertain future. The other spouse sees that I am leaving my home and am having to try to buy a house with enough rooms to facilitate access to my children in this housing market.
A resolution could be made more likely if it was kept in mind that no one is going to come out of this 100% happy. The question is whether you can live with it because the reality that is being faced is that one home/pot most likely must be divided to create two homes going forward.
So here is my advice, when asked how are assets divided in divorce in Ireland. Honestly appraise your financial situation. Then speak to a financial advisor if necessary and understand that this is not a simple calculation or process, and perhaps finally, specialist family law solicitor in Dublin as well. But again, you might say I would say that!!
Are assets split 50/50 in divorce in Ireland?
There is no such blanket rule regarding the division of assets in Ireland. For instance, in California, there is a strict 50/50 split of all assets of the marriage regardless of all the circumstances. It would be termed a strict policy. In Ireland it is not so clear, the courts are required to ensure that both spouses are adequately provided for going forward into the future. Not all assets are taken into account in a blanket fashion. For instance, some monies are in the overall pot of assets such as the family home but other assets are taken less into account for example a house owned and paid for by one spouse before the marriage. Lots of factors are taken into account by a court when dividing the assets but firstly the welfare of the children must be catered for and then a balancing act is performed by the judge in dividing up the family assets in such a way as to ensure both spouses are adequately provided for.
Is Divorce in Ireland 50/50?
No, Irish Courts do not operate in such a way. The Courts in Ireland treat each case as unique and do not have such a simple formula. The courts instead try to identify all the marital assets and obtain a history of the acquisition of these assets. The Court then considers the children of the marriage and how they will be looked after and thereafter try’s to ensure both spouses are adequately provided for. The Court acknowledges that both spouses will most likely have to take a drop in their living standards when one house becomes two.
What is a wife/husband entitled to in a divorce in Ireland?
There is no black-and-white entitlement for a husband or a wife that can be baldly put into numbers in Ireland. Instead, there is the idea that a general pool of marital assets exists, that the
couple owns together. Both individuals’ assets are combined to provide this list of family
assets. The judge in a divorce case tries to come to a fair division of these marital assets
to allow both spouses to move on with their lives into the future. Their goal is to ensure
that both parties are adequately provided for going into the future. Behaviour during
the marriage is virtually never going to be taken into account.
