If you're splitting assets, see a solicitor

Divorce and separation are, unfortunately, common realities of life, even more so at this time of year which can bring joy, but also stress.

Many couples are seeking to minimise costs and focus on immediate needs which is totally understandable. In many cases, they choose to manage separations without legal advice, and we understand why. While this approach may seem practical, it carries significant risks, particularly regarding financial fairness.

In Scotland, the financial breakdown of both marriages and civil partnerships is governed by the Family Law (Scotland) Act 1985. The Act aims to ensure financial fairness upon separation. However, just as every couple’s financial circumstances differ, such as varying incomes, assets, and outgoings, so too does the process of achieving a fair division. There’s no one-size-fits-all solution.

Even a single meeting with a solicitor will make for a better split (Picture: Shutterstock)

There are two main approaches to financial separation: with or without “full disclosure.” Full disclosure sees both parties exchanging comprehensive financial information, often through solicitors, to determine the total net value of matrimonial property available for fair sharing. Without transparency, there is a risk neither party can be confident the division is truly fair, as they may not know the full extent of what is to be shared.

A common oversight in self-managed separations is the value of pensions. Typically, only pension interests accrued during the marriage are considered matrimonial property; amounts accrued before marriage or after separation are usually excluded. Failing to account for pensions can lead to significant imbalances.

A frequent scenario encountered by family lawyers involves a household with children, where one partner is the main earner and the other dedicates more time, or all their time, to managing the home and childcare. In such cases, the stay-at-home parent may have little or no income and be financially dependent on the main earner. If the couple separates, is it fair for the main earner to retain all career progress, savings, and pension interests, while the stay-at-home parent leaves with little, simply because of their chosen role? The Act recognises these dynamics, seeking to ensure what was built up during the marriage is shared fairly, regardless of whose name the assets are in. It acknowledges that contributions to a marriage can be financial or non-financial, such as childcare, and aims to allow both parties to move forward as financially stable as possible.

The main risk of arranging a financial separation without legal advice is that not all relevant information may be disclosed or considered. This increases the likelihood of an unfair division, potentially resulting in financial loss to one party and gain to the other which is an outcome the Act is designed to prevent. Both parties contribute to the family unit and are entitled to a fair share of matrimonial property, regardless of their roles.

Transparency when it comes to assets is best, says Alexis Harper

For those unsure about the process, it is strongly recommended to consult a solicitor at least once at the outset of separation. An initial meeting can clarify the extent of matrimonial property and identify what information should be gathered to achieve fairness. There are often several options for dividing property, and legal advice can facilitate productive discussions and informed decisions, helping both parties secure their financial futures.

While it is natural to focus on immediate concerns during separation, it is equally important not to lose sight of long-term financial security. Seeking legal advice early, even just a single meeting, can make a significant difference in achieving a fair and stable outcome for both parties.

Alexis Harper is a Partner, Harper Macleod