When couples divorce, it is commonly believed that all assets are split equally between parties however this is not always the case. When assets are put into the ‘matrimonial pot’ ready for dividing between parties it is important to distinguish between matrimonial and non-matrimonial assets. Why? Simply put, they can be treated differently when being divided between spouses in divorce.
Not all marriages will involve non-matrimonial assets but where they do, it can be a point of contention between divorcing spouses. Assets generally are likely to include (but are not limited to): property, pensions, savings, investments, jewellery, vehicles. Assets can then be sub-divided into either ‘matrimonial’ and ‘non-matrimonial’ assets, this determines how they will be split between parties and if they will be considered in a financial settlement, but what are they?
If you are going through a separation, here are our most commonly asked questions in divorce answered by our divorce experts.
What are matrimonial assets?
Matrimonial assets are assets that you and your spouse acquired during the marriage.
Matrimonial assets typically include:-
- Family home
- Pensions
- Savings
- Vehicles
- Furniture
- Investments
- Businesses
The law in England and Wales states that assets acquired during the marriage are available to be shared in the event of a divorce.
What are non-matrimonial assets?
Non-matrimonial assets are assets that were owned by one party before the marriage or acquired after separation and have been kept separate from any matrimonial assets. This might include:-
- additional property owned in one spouse’s sole name
- family businesses
- inheritance
- family heirlooms
If non-matrimonial assets have been ‘mingled’, for instance, if your spouse has since been named on a property you owned before the marriage, or if an inheritance received by one party was used to pay the mortgage on the matrimonial home, then those assets may no longer be considered non-matrimonial.
How are matrimonial and non-matrimonial assets treated in divorce?
Generally, in a divorce, matrimonial assets form part of the ‘pot’ that is available for sharing. The division of matrimonial assets doesn’t necessarily mean it’s going to be an equal 50/50 split.
The court will consider various factors, including the needs of both parties, their contributions, and the welfare of any children involved. The court considers all the assets, both matrimonial and non-matrimonial, and assesses how they should be divided to provide for both parties’ needs and the needs of any dependent children.
Needs prevail, and if the needs of one or both parties cannot be met through division of matrimonial assets then the court will look to the availability of any non matrimonial property. If the parties’ needs can be met through division of the matrimonial assets, and the non-matrimonial assets have clearly and unequivocally been kept separate, then the court may be persuaded to ringfence those assets.
Tips when dealing with matrimonial and non-matrimonial assets
- Be honest with your spouse about your finances. This may help in avoiding disputes surrounding your finances and can make negotiations easier between you both.
- Be practical and realistic about your expectations. It is unlikely you will be able to keep all of your matrimonial assets. Be aware you must be open to compromise.
- Prepare to negotiate. It is possible to reach an agreement with your spouse without having to through the Court, if you are willing to negotiate between yourselves or with the help of a legal professional, if necessary.
If you are unable to reach an agreement with your spouse, you may need to apply to the Court for a Financial Order.
Conclusion
Reaching a financial settlement when there are both matrimonial and non-matrimonial assets to consider can be a complex process. It is important to understand your options.
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If you would like further advice on the issues discussed, get in touch for a free 30-minute consultation.