When a relationship ends, the natural hope is that you will be able to separate your matrimonial and non-matrimonial assets fairly and amicably with your spouse or partner. It may be however, that there are some assets you feel strongly about protecting and attempting to retain.
What assets could I look to protect?
Whether it’s a business that you started, an inheritance received from your family or monies accrued following separation, or money/property owned prior to the marriage which has remained untouched, the source of a separating couples’ assets may be a good reason for departing from equality of division on divorce or dissolution. You should take legal advice early on, as to how you may best protect your interest in such assets.
The basis of the sharing principle is that marriage is regarded as an economic partnership where each party is presumed to have contributed to the economic or domestic well-being of the family. It follows that assets built up during the course of the marriage are normally regarded as matrimonial assets, capable of division. For example, such assets typically include the family home, monies saved, pensions contributed to or a business which has been started and built up during the marriage. This is particularly the case if spouses jointly hold shares in a family business.
Non-matrimonial assets
Assets that are not the fruit of the matrimonial partnership may be regarded as non-matrimonial assets, and unless needs require it, could be ring-fenced from division. Inherited assets, a post-separation accrual or pre-marital holdings may commonly be considered as ‘non-matrimonial assets’ and may be dealt with differently from matrimonial assets.
Inherited assets
In the case of inherited assets, their treatment will depend on when the inheritance was received and the extent to which it has been mingled with the other matrimonial assets. This can dictate whether the existence of the inherited assets should affect the division of assets. In the case of post-separation accrual, the relevant issues are the timing of the entitlement and the extent to which the accrual might be referable to marital partnership. In relation to pre-marital assets, the question will pin around whether those assets have then been used for the family benefit or whether they have remained untouched and not drawn upon.
When separating your matrimonial and non-matrimonial assets is irrelevant
However, in many cases, the distinction between matrimonial and non-matrimonial assets may have little relevance if there is not enough capital available to meet both parties’ future needs adequately. The non-matrimonial origin of an asset will not override a needs-based claim and non-matrimonial assets can be shared if this is required to meet the parties’ and any children’s needs.
Help to clarify your position
It is important to identify your matrimonial assets and any potential non-matrimonial assets from the outset. You should consider the extent to which your non-matrimonial assets have been mingled with the matrimonial assets and how much money would be left over to meet your spouse or partner’s needs if your non-matrimonial assets were excluded from the communal and joint assets. Taking legal and financial advice upon separation can help to clarify your position and to explore the options available to you to protect and separate your matrimonial and non-matrimonial assets.
If you would like to discuss any of the issues raised in this article, please contact our Family team, call 01392 210700 or email family.exeter@stephens-scown.co.uk.