When looking to divorce, one of the main questions (from the many that arise), are along the lines of ‘what will happen to the assets?’. The law in England and Wales differentiates between two types of assets: ‘matrimonial’ and ‘non-matrimonial’. Both types of assets must be declared by both you and your former spouse during the divorce process.
Matrimonial assets are any financial assets that you and/or your spouse built up during the course of your marriage. The course of marriage is defined as the length of time that elapses from the date of your wedding, to the date of separation, rather than the full length of your pre-marital/cohabiting relationship.
The matrimonial assets include the family home along with investments, businesses, savings, pension plans, vehicles, and furniture etc that you acquired as a couple. It does not necessarily matter who paid/accumulated the wealth. The general position under the law in England and Wales is that the assets gained, whilst married, also belong to your husband or wife who is entitled to a share of them upon divorce: whether that means by way of a 50:50 split, all depends on the other factors of the case, including yours and your former spouse’s needs and financial resources (more on this below).
The term ‘non-matrimonial assets’ defines the assets that have been acquired before marriage (either as a single person or while cohabiting) or after separation.
Non-matrimonial assets include property which has been purchased in one spouses’ name, (rather than jointly with the other spouse), or assets which have been gifted to one of you or inherited by one of you. Non-matrimonial assets can include inheritance, family businesses, pension plans, investments, savings etc. To be considered ‘non-matrimonial’, these assets must not have ‘mingled’ during the course of your marriage; For instance, a property that you have in your own name before marriage would be considered non-matrimonial, however if you were to then transfer ownership of this property into your joint names after marriage – this would be considered matrimonial.
Non-matrimonial assets are not necessarily excluded from any financial settlement. Though you could ask the court to exclude the non-matrimonial assets from ‘the asset pot’ and therefore any financial settlement, this is not guaranteed. The judge has a wide discretion. Having said that, the general position in the law of England and Wales is that the non-matrimonial assets are unlikely to be shared between both yourself and your ex-partner following a divorce unless they are required to meet needs. For example, if upon division of the matrimonial assets, one spouse will still be unable to appropriately house themselves, then a sum could be awarded to them from the non-matrimonial assets, to meet their housing needs moving forward.
One way to try to ring fence your non-matrimonial assets is by drawing up a prenuptial agreement (before the marriage takes place) or a postnuptial agreement (entered into during the marriage). Though not strictly legally binding in England and Wales, following the Supreme Court’s ruling in 2010, both agreements could serve to protect assets such as family inheritance, or gifts given prior to the marriage etc if properly executed.
The court’s considerations:
In any event judges have a wide discretion to act ‘fairly’. Each case turns on its own facts. If one person’s needs cannot be met from their share of matrimonial assets alone, the court can (and will) look to apportion the non-matrimonial assets.
The court will look at a number of different factors (often termed the s25 factors) when deciding how matrimonial and non-matrimonial assets should be split between you. These include:
1) The income, earning capacity, properties, investments and savings that each of you have or is likely to have in the near future.
2) The financial needs, obligations and responsibilities each of you have or is likely to have in the near future
3) The standard of living you/the family were accustomed to, before the marriage broke down.
4) The duration of the marriage and age of each of you.
5) Any physical or mental disability suffered by either of you.
6) The contributions each of you made or is likely to make in the near future to the welfare of the family, including looking after the home or caring for children.
7) Yours and your ex-partner’s conduct, if this is deemed to affect the proceedings in any way.
The court will take a view on each of these factors to determine the fairest way to split the assets, given your individual circumstances.
As can be seen from the above, the obtaining of a financial settlement upon divorce is not a straightforward matter. If you are seeking a divorce, it is important that you obtain specialist advice, so you know where you stand and to assist you in obtaining the best settlement possible. Please do not hesitate to contact our team of experienced family law specialists. For more information, call us today on 0845 287 0939, contact us by email, or chat to us through the online chat below.