Central to divorce or the dissolution of a civil partnership is the process of dividing up the couple’s money and property. ‘Matrimonial assets’ are jointly-owned or acquired property which can and should be divided between the estranged couple. Non-matrimonial assets, by contrast, are those which existed before the marriage and are therefore not normally subject to division unless one spouse is in a position of real need.
The longer a couple have been married, the more marital assets they will hold. A couple who have only been together a couple of years have not had long to build up a pool of joint wealth, but a couple ending a 20 year marriage or civil partnership will be in a very different position.
Examples of matrimonial assets
There are no hard-and-fast rules but for the average couple, marital assets typically include:
- The family home (even if only one partner has their name on the title deeds)
- Pensions and savings accounts
- Stocks and financial investments
- Furniture and other household items
- Cars and other vehicles
Examples of non-matrimonial assets
Typical non-matrimonial assets include:
- Assets inherited by one of the spouses during the marriage.
- Assets received as a gift by one of the spouses.
- Assets already owned by one party before the marriage.
- Property acquired by one spouse and solely owned by them, and which is not the family home.
In order to qualify as non-matrimonial property, assets must remain distinct and separate from matrimonial wealth. For example, if you owned a valuable piece of art before getting married, but then sold this during the marriage to pay school fees, the money raised by that sale would be considered matrimonial in the event of a divorce.
Are my non-matrimonial assets safe if get divorced?
So, what if you are lucky enough to own substantial assets before your divorce – or to have received a major inheritance? Is this property safe if you get divorced? It may be, but this is not guaranteed. It all depends on your personal circumstances. English family law is not one-size-fits-all but instead operates on a case-by-case basis.
The law in England and Wales clearly states that jointly acquired property should be shared. The normal starting point for this division is 50:50 but the family courts will depart from this if:
- One of the partners clearly has greater need than the other.
- One spouse can demonstrate that they made a particularly significant contribution to the matrimonial assets.
When you complete your Form E to declare your assets at the beginning of the divorce process, in order to ensure fairness, you are required to declare everything – even property that you feel sure is non-matrimonial. A family court judge may agree and exclude these assets from the settlement – a process called ‘ring-fencing’. But the primary focus of a family court judge will always be meeting the financial needs of the poorer partner, and if those needs cannot be met by simply dividing the matrimonial wealth, then at least some non-matrimonial assets will be added into the mix.
How do I protect non-matrimonial assets?
The best way to protect non-matrimonial assets is by entering into a formal legal agreement with your spouse regarding the division of matrimonial and non-matrimonial assets if your relationship comes to an end. If this agreement is reached before the marriage, it will be called a ‘prenuptial agreement’. But if signed after the ceremony it becomes a ‘postnuptial agreement’.
In most cases prenups and postnups will be considered binding by the courts as long as they were freely entered into and not signed in obviously unfair circumstances (for example, if one partner was unduly pressured, or had no independent legal advice).
Placing non-matrimonial assets into a trust can also be an effective way to protect them. In a legal trust, a third party is given, for a period of time, formal control of certain assets on behalf of their owner, who is known as the ‘beneficiary’.
This is a complex issue and we always recommend seeking specialist legal advice. Talk to a specialist family lawyer and ensure your interests are fully protected.