Lucinda Connell, Senior Solicitor of Major Family Law, Newcastle and North East’s leading divorce and children’s specialists, comments in the North East Times your average person could be forgiven for being unclear as to how divorce settlements work in this country. Case reported in the media do nothing to clarify the courts’ approach: is it a straight 50:50 or a case of wife gets all?
The reason for this (sensational reporting tendencies aside) is that the judiciary in England and Wales are afforded a wide discretion when it comes to deciding financial settlement in individual divorce cases. It may surprise a few to discover that there is no set mathematical formula to be applied; rather it is a checklist of considerations against the specific background of each marriage history.
Generally, there is an accepted starting point of considering whether an equal division (50:50) of assets would prove a fair settlement. If there are sufficient available assets to meet each of the parties’ needs (for housing, capital and income), then the Court may well decide that equal division is appropriate.
The problem is that in many cases, a simple equal split would not be fair. There may well be a disparity in earning capacity, and/or an increased level of need where one party has the day to day care of the children. There are other considerations to be factored in too, so that it begins to become clear why there sometimes seems no emerging pattern to reported decisions.
And then there is the tricky question of assets acquired either side of the marriage – either before the parties married, or since they have separated. Is it fair to include these in the pot of assets to be divvied up?
There are any number of assets which can be termed “non-matrimonial” assets: gifts or inheritances received by one spouse; businesses which are deemed to be family businesses; and family heirlooms are just some of the common examples.
As before, there is no set formulaic approach to dealing with such property and all the surrounding circumstances including acquisition, subsequent dealing and benefit received will be considered. Depending on how and when such assets were acquired and how they were subsequently treated within the marriage, it is open to the Judge to determine that they thereby became matrimonial assets to be divided in the same way as the other matrimonial property.
In a similar vein, assets accrued after the parties have separated may be deemed to be non-matrimonial assets, particularly where they have come about as a result of an entirely new and independent venture entered into by one of the parties post separation. An example of this is where one party uses independently obtained finance to establish a new business venture which reaps rewards.
There is also a further type of post separation asset accrual, where assets in existence during the marriage increase in value post separation, in which case, the Judge is likely to treat the post separation increase in value only as a non-matrimonial asset.
What does this mean in terms of a divorce settlement though? Are these “non-matrimonial” assets exempt from being divided up?
In a recent Court of Appeal case, the Appeal Judge declared that the non-matrimonial property is not quarantined and excluded from the court’s dispositive powers. The court will decide whether it should be shared and if so in what proportions. In so deciding it will have regard to the reality that the longer the marriage the more likely non-matrimonial property will become merged or entangled with matrimonial property. By contrast, in a short marriage case non-matrimonial assets are not likely to be shared unless needs require this, although he acknowledged that only very exceptionally will such sharing be found to be fair.
In short, it’s a technical area which requires expert advice. Each case is different according to the particular circumstances of each marriage. Moreover, early financial planning is recommended for anyone bringing assets to a marriage if they are to be preserved as non-matrimonial assets.
Lucinda Connell is a Senior Solicitor at Major Family Law, the Divorce and Family Law Specialists, 12 West Road, Ponteland, Newcastle Upon Tyne. T: 01661 82 45 82 www.majorfamilylaw.co.uk. Twitter: @majorfamilylaw”