WHEN IS A MATRIMONIAL ASSET NOT A MATRIMONIAL ASSET?

A typical matrimonial asset would be the family home; bought together, lived in together and when the parties separate it needs to be dealt with in a way that ensures both have somewhere to live.  The property is either sold or transferred to one or other of the parties.  This is on a relatively equal basis according to their means so that they both end up living in relatively similar accommodation.

little boy and dogA “non-matrimonial” asset would be for example, an inheritance, something acquired by one party either prior to the marriage or during, but in some way kept separate.  This could be a family business or an inheritance received by one of the parties and perhaps kept separately or used to purchase another property or asset.  When the parties separate what should happen to these assets; do they belong to both of them equally or should they be treated differently?  I am sure the person that received the inheritance would argue that it’s “theirs” and not to be dealt with jointly.  After all if the asset was acquired after the parties were divorced then it would only belong to that person.

The Courts have varied their approach to these non-matrimonial assets, whether it be an inheritance or other assets received post separation or brought to the marriage and kept separate.  Having established that those assets that the parties generated during the marriage otherwise than by external donation i.e. matrimonial property, are to be shared equally, the Courts are now saying that this also applies, this sharing principal, to all the parties’ property, however acquired.  But, “to the extent that their property is non-matrimonial, there is likely to be a better reason for departure from equality” (Charman v Charman [2007] 1 FLR 1246) so, the existence of non-matrimonial property can justify departure from equality, but not necessarily if this would result in unfairness to one party or the other.

So there we have it – non-matrimonial property is to be treated as matrimonial property unless it would be unfair to either party. The situation remains very unclear!

It means that if one party for instance acquires an inheritance shortly before they separate both would argue that it would be unfair to do one or the other, the recipient would feel it unfair to be divided equally, the other party would argue that it would be unfair for it not to be taken into account.  As always you would need to look at the particular facts of a particular case to come to any sensible conclusion.  This is why it is often very difficult to give categorical advice as to the likely outcome in divorce proceedings.  The financial aspects of separation are best agreed rather than argued through the Courts which can be an expensive gamble.

For more information contact Nichola Gough:

E: nickygough@cotswoldfamilylaw.co.uk

T:01608 686590

W: www.cotswoldfamilylaw.co.uk