Financial Settlements for LGBT Couples: Advice from a LGBT Divorce Lawyer

Insights from Tyrer Roxburgh’s LGBT Divorce Lawyer

Ending a marriage, civil partnership, or long-term relationship raises questions about how money and assets will be divided. For LGBT couples, there are often additional considerations, especially for those who entered into civil partnerships before same-sex marriage became legal in England and Wales in 2014, or for couples who lived together without a formal legal status. Knowing how the courts approach property, pensions, and maintenance is important to help you plan for a fair outcome, our specialist LGBT divorce lawyer explains.

How The Courts Decide on Financial Settlements

When couples divorce or dissolve a civil partnership, the court has wide discretion to decide how assets should be divided. There is no strict formula, but the law requires the court to consider a range of factors under section 25 of the Matrimonial Causes Act 1973. The key aim is fairness, taking into account both partners’ needs and contributions.

Some of the main factors the court will weigh include:

• The income and earning capacity of each partner, both now and in the future.
• The financial needs and responsibilities of each person, particularly if children are involved.
• The standard of living enjoyed during the relationship.
• The age of each partner and the length of the marriage or civil partnership.
• The contributions each person made, whether financial (such as earnings) or non-financial (such as raising children or caring for the home).

Although every case is different, the guiding principle is that settlements should be fair and should meet the reasonable needs of both partners.

Dividing Property

The family home is often the most significant asset for separating couples. If it is jointly owned, the court will decide whether it should be sold and the proceeds divided, or whether one partner should keep it, often in exchange for giving up a claim to other assets. If the home is owned in one person’s name, the other may still have rights if they have contributed financially or if the property is considered part of the overall matrimonial assets.

When deciding what happens to property, the court will pay close attention to housing needs. For example, if one partner will be the primary carer of children, that will carry significant weight. In some cases, a property may be transferred to one person, or one partner may be allowed to remain in the home for a set period before it is sold.

Pensions and Historical Complications

Pensions are another key element of financial settlements, and often one of the most valuable assets. The court has several options for dividing pensions, such as:

• Pension sharing orders, which split a pension at the time of divorce or dissolution and transfer a share into the other partner’s name.
• Pension attachment orders, where part of one partner’s pension income is paid to the other after retirement.
• Offsetting, where one partner keeps their pension and the other receives more of another asset (such as property or savings).

For LGBT couples, pensions can be particularly complex. Many older couples were only able to register as civil partners, not marry. Some pension schemes historically provided fewer rights to surviving civil partners than to surviving spouses, although the law has been gradually brought into line. Issues may also arise where couples lived together informally for many years before entering a legal union, as contributions made during that period may not be recognised in the same way.

It is important to obtain up-to-date pension valuations and specialist advice, as the way pensions are treated can have long-lasting effects on financial security.

Spousal Maintenance

In some cases, one partner may need ongoing financial support after separation. This is known as spousal maintenance in divorce, or maintenance following the end of a civil partnership. The court can order regular payments where there is a significant difference in income or earning capacity, and where one partner cannot meet their reasonable needs without support.

Spousal maintenance is not automatic. The court will consider the needs and resources of each partner, the standard of living during the relationship, and how long it may take the financially weaker partner to adjust. In some cases, maintenance may be ordered for a fixed term, to allow time to retrain or re-enter the workforce. In others, it may be ongoing, particularly where the separation comes after a long marriage or partnership and one partner is unlikely to achieve financial independence.

The court will always try to encourage a clean break where possible, meaning each partner is financially independent. However, this is not always realistic, especially where there are large income disparities.

Prenuptial Agreements and LGBT Couples

Prenuptial agreements are becoming increasingly common, including among LGBT couples. These are agreements made before marriage or civil partnership that set out how assets will be divided if the relationship ends. While prenuptial agreements are not automatically binding in England and Wales, the courts have made it clear that they will usually be upheld if they are fair and were entered into freely, with both parties receiving independent legal advice.

For couples where one partner has significant pre-existing assets, or where there are international elements to the relationship, a prenuptial agreement can provide clarity and reduce conflict in the event of separation. It is important to note, however, that the court retains ultimate discretion and will always ensure that any agreement meets the basic needs of both partners.

Civil Partnerships Versus Marriage

For LGBT couples, the distinction between marriage and civil partnership has narrowed significantly since the introduction of same-sex marriage in 2014. Both offer almost identical legal rights when it comes to financial settlements. However, couples who entered into civil partnerships before marriage was available may face additional complications, especially in relation to pensions and inheritance rights.

Those who lived together without formalising their relationship in law may have fewer protections. Cohabiting partners do not automatically have the same financial rights as spouses or civil partners, even if they lived together for many years. Claims are usually limited to property ownership or financial contributions that can be proven. This can create difficult situations, so it is important to take legal advice as early as possible.

Seeking a Fair Outcome

Financial settlements can be complex, and outcomes vary widely depending on circumstances. Courts aim for fairness, but what that looks like in practice depends on incomes, needs, and the history of the relationship. For LGBT couples, the added layer of legal history around civil partnerships and informal unions makes it especially important to get clear legal guidance.

Speak to Tyrer Roxburgh

If you are going through a divorce or civil partnership dissolution, or if you need advice on financial arrangements after separating from a partner, Tyrer Roxburgh Solicitors can help. Our family law team has experience working with LGBT clients and understands the unique issues that can arise in these cases.

We can explain your rights, guide you through negotiations, and represent you in court where needed. To book a consultation with one of our solicitors, contact Tyrer Roxburgh today.