What are matrimonial assets?

What are matrimonial assets?

Matrimonial assets are any assets that you, and your partner, acquired during the course of your relationship. They can include things like the properties, pensions, savings, investments, cars, antiques, jewellery, art, collections, and anything of value acquired whilst you lived together before you got married, and brought into the marriage. They can also include business assets established or expanded during the marriage.

How are matrimonial assets divided in divorce?

There is no set percentage split that automatically applies when splitting matrimonial assets on divorce or dissolution. The starting point is that these assets should be divided equally with the aim to meet the needs of both parties. If an equal division of the matrimonial assets is sufficient to meet both party’s needs, an equal division may be both the starting and the end points.

If, one party has significantly greater needs or responsibilities, there can be an adjustment and departure from an equal split (50/50) to meet those needs.

Instead of sticking to a fixed formula, the primary goal is to achieve a fair outcome for both parties based on needs and the factors contained in section 25 of the Matrimonial Causes Act 1973. Each case is assessed individually based on its particular circumstances.

What happens to the family home in divorce?

In a divorce or dissolution, the family home where the couple and children live will be treated as a marital asset during regardless of which party purchased the property and who paid the mortgage.

There are several possible options for the family home in a divorce:

• The house may be sold and the proceeds split between the spouses.
• One spouse can “buy out” the other’s share and remain in the home.
• One or both of the spouses may temporarily stay in the home, until the children reach a certain age or the property market improves. Thereafter the home is sold.
• The property may be rented out, and the parties move into alternative accommodation like friends, family or rented.

Can my spouse take half my pension on divorce?

The 50/50 starting point for the settlement of assets includes pensions. If one spouse has a much larger pension than the other, this could be shared out between them via a court order called a ‘pension sharing order’.

When a pension sharing order is made a pension pot is split between a couple. One spouse will receive a percentage of a pension from the other spouse’s pension. This creates a separate and independent pension for the recipient.

Once the pension share is implemented, each party has control over their own portion of the pension. A pension sharing order can be made in both divorce and in dissolution of a civil partnership.

Alternatively, one party could take a larger share of a different asset instead of claiming from the pension, known as pensions offsetting.

How is a business treated in divorce?

A business is treated like any other asset which can be divided between the spouses as part of a divorce settlement. Valuing a business in divorce involves assessing tangible and intangible assets, business income, and the trading pattern to determine its worth. The division of a business can involve one spouse buying out the other’s interest, continuing to co-own the business post-divorce, or selling the business to a third party.

Are all assets treated the same in a divorce?

No, there are two categories of assets: Matrimonial & non-matrimonial.

Matrimonial typically include the family home, personal savings, pensions, business assets, and personal belongings acquired during the marriage.

Non-matrimonial are those acquired before the marriage, or after separation and are usually kept separate from the matrimonial assets.

What are examples of non-matrimonial assets?

Non-matrimonial assets include:

• Property purchased in one spouse’s sole name before marriage, and kept separate from the marriage.
• Assets specified as separate property in a Prenuptial Agreement entered into by the parties.
• An inheritance received by one spouse.
• Gifts given to one spouse by family or friends.
• Investments or savings acquired before marriage.
• Family businesses owned by one spouse prior to marriage.
• Assets acquired after separation.

How are non-matrimonial assets treated?

Non-matrimonial assets are not automatically excluded from financial settlements. They may be included if they are needed to meet the financial needs of both parties. The longer the marriage or civil partnership, the more likely non-matrimonial assets will be considered as shared assets.

What are post separation assets?

Post separation assets refer to assets that have been obtained after separation, but before a financial Order is obtained in a divorce. These assets can include properties, bonuses, inheritances, and company shares. A Separation Agreement can specify the date of the separation, and identify what assets existed at the time.

How are post separation assets dealt with in divorce?

If an asset was acquired after the parties’ separation using a party’s own endeavours and was not related to the marital partnership, or created during the marriage, the asset may be treated as non-marital and isolated. In the event that the marital assets are not enough to meet both parties’ needs, then isolated non-marital assets can be included to meet those needs.

Are there any assets that cannot be split in a divorce?

There are no absolute restrictions in what assets can be included in reaching a divorce financial settlement. All assets are generally considered, but some assets may be treated differently. A court has considerable discretion in determining how assets should be divided as the goal is to achieve a fair outcome based on meeting the party’s needs.

Non-matrimonial assets such as are generally excluded from division UNLESS they are required to meet financial needs.

Personal items of little financial value are the least likely to be divided.

What does ringfencing assets in divorce mean?

Ringfencing refers to protecting certain assets from being divided or shared as part of the divorce settlement. By ringfencing, certain assets such as premarital wealth, inheritances, or businesses can be excluded from the matrimonial pot during divorce proceedings. It is normally done through prenuptial or postnuptial agreements.

Ringfencing an asset is not automatic or guaranteed. When considering whether to exclude an asset, courts will consider various factors, including:

• Whether the asset has been shared or used by the family during the marriage
• the financial needs of both parties and any children
• the length of the marriage.