From debts to pets: who owns what when partners separate?

Coodes Solicitors Family expert, Karen Pritchard, gives some tips to help separating couples sort things out with the minimum of fuss and expense.

Often when partners separate or divorce it’s fairly easy to agree what happens to the big things like the house and the children. Sometimes it’s the smaller items or liabilities that are trickier to work out. If these aren’t agreed by the separating couple that can cause a lot of bad feeling. Worse still, it could generate solicitors’ correspondence, which is both costly and time consuming.

There are a few ‘golden rules’ regarding contents and debts which are really helpful to have in mind when separating.

Dividing joint assets

For married couples, things bought jointly or given to one or other party during the course of a marriage are generally considered to be joint assets. Neither person has a right to them and they need to be divided fairly or by agreement. Judges have been known to comment that if the parties cannot reach agreement on the division of the household contents then they will order everything to be sold at public auction and the proceeds divided equally so the parties can bid against each other for what they want. It’s amazing how quickly the divorcing couple then sort it out!

If there are items of significant value or particular sentimental value then it is as well to identify them at the outset. Valuation evidence may be required for antiques, paintings, jewellery and the like and then the values can be balanced by each party having a fair share. Sentimental items usually come from one side of the family and will generally be retained by that person but ‘offset’ by the other person keeping something else.

For unmarried couples it is a very different position and the rule of ‘Ownership being 9/10ths of the law’ remains. If someone can prove that they bought a particular item then ownership falls with them. This can result in apparently unfair divisions of assets where one party has paid the bills and bought the food and the other has bought goods or contents.

Sharing debts

Whether married or not, debts such as credit cards, loans and HP agreements are the liability of whoever entered into the contract for them. If debts were taken out in joint names, such as an overdraft on a joint account, then both people are legally considered to be equally liable for the debt.

The only exception is when a debt is in one person’s name for whatever reason but can be proved within divorce proceedings to have been for the benefit of both parties. In these cases, a Court will sometime direct that the whole balance be paid from the proceeds of a property or equally by both spouses.

Family loans, sometimes called ‘soft loans’, can be treated differently. These may, for example, be from parents to help marrying children buy their first home. If the marriage then fails the parents will often require repayment. There is often a dispute as to whether the money was a loan or a gift. Much will turn on the arrangements agreed at the time and if it is intended that the money is a genuine loan then it is best to record this at the time in writing and signed by all parties. The record should include how much is being loaned, the repayment terms and any interest to be added. The Court can otherwise take the view that these ‘loans’ are really ‘advance inheritance’ and discount them as actually needing to be repaid.

Caring for pets

One of the most difficult things to agree on is who should keep the family dog! Over the years I have seen all sorts of arrangements including ‘alternate weekend visitation rights’ and orders specifying maintenance payments for dog food and vet bills.

There is the same general rule about pets: that they belong to the parties jointly if they are bought by married parties together or by one or other party if they are not married and were bought by one of the parties from their personal funds.

There is no easy answer and of course the ‘sell and divide’ option is not so easy.

Avoiding problems

In extreme cases, mediation is undoubtedly the best option to resolve disputes over contents, debts or pets. This will be required before any Court application can be made, which should only ever be a last resort.

The key message, particularly if you are not getting married, is to plan ahead. Have a Living Together Agreement to set out who will own what if you separate. If you are planning marriage and have significant personal assets you should consider a pre-nuptial agreement. If you have these in advance then, should things not go to plan, the unpleasant and expensive business of trying after the event to decide who owns what can be avoided.

For more information or advice on marital or relationship legal issues, visit our Divorce and Separation pages or contact our Family Team at Coodes Solicitors on 01726 874700.