One of the most contentious parts of a divorce is the division assets. To understand the process it is essential to get familiar with the different types of assets, particularly with regard to distinguishing between matrimonial and non-matrimonial assets because the court applies the sharing principle to the division of matrimonial property, with the starting point being an equal division of those assets between the parties.
The distinction between matrimonial and non- matrimonial assets was first defined in the case of White and White. Lord Nicholls said, "... property owned by one spouse before the marriage, and inherited property whenever acquired, stand on a different footing from what may be loosely called matrimonial property. According to this view, on a breakdown of the marriage these two classes of property should not necessarily be treated in the same way."
In simple terms:
Matrimonial Assets
Matrimonial assets are assets acquired during the course of the marriage by you, and your partner. They can also be assets acquired during any time you lived together before you were married, known as pre-marriage cohabitation. Common examples are:
- The family home
- Pension
- Savings and current accounts
- Investments, endowments, insurance policies
- Personal belongings – vehicles, jewellery, furniture, art
- Any other assets – for example share options, trust interests
- Any asset that is likely to be received in the foreseeable future
- Debts, including loans, credit cards and overdrafts
Non-Matrimonial Assets
Non-matrimonial assets are financial assets acquired by you or your spouse before your marriage or after your divorce. However, it is not always easy or straightforward to agree on what assets are considered non-matrimonial. Some examples are:
- Gifts
- Inheritance
- Capital acquired through earnings or investments
Pre acquired assets
These assets are not the product of marital endeavour. Such as properties bought by either you or your partner before marriage or cohabitation.
Identifying the different assets is important in financial proceedings. However, the extent to which this will be appropriate will depend on the facts of each individual case and two essential factors; the needs of the parties and the way the non-matrimonial assets have been dealt with by the parties during the marriage. Needs are the overriding factor, and therefore the court can take into consideration non-matrimonial assets to ensure needs are met. However, as confirmed by the Court of Appeal in Hart v Hart [2017] EWCA Civ 1306, the sharing principle applies with limited or no force to non-matrimonial assets.
Arguments regarding non-matrimonial property can be complex and difficult to make. The most important thing to do in order to protect non-matrimonial assets is to enter into a pre-nuptial agreement before getting married. Alternatively, the non-matrimonial assets should be kept entirely separate from the marriage. Although, as mentioned, the caveat to this is that the court can always have recourse to non-matrimonial assets to meet the other spouse's needs.
Originally published 03 February 2023.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.