One of the most contentious elements of a divorce is the division of assets.  Central to this is understanding the different types of assets involved, particularly with regards to matrimonial and non-matrimonial assets.

The need to differentiate between matrimonial and non-matrimonial assets is brought into sharper focus because the Court’s starting point is to find the fairest and most equal way to split a couple’s money, property and possessions. 

This task is often made even more challenging when the marriage has been a long one as there will have been more time to build up assets.  In these cases, there will need to be even more careful consideration as to which assets are were acquired during the marriage – the matrimonial assets – and which existed before the marriage – the non-matrimonial assets.  The latter will usually be exempt from the division unless one spouse is in a position of real need.

What are a couple’s matrimonial and non-matrimonial assets?

A couple’s matrimonial assets will typically include:

• The family home (even if the property is only registered in one spouse’s name)
• Any additional properties
• Pensions, savings, stocks and other financial investments
• Trusts
• Businesses and business interests
• Furniture and other valuable household items including collectables
• Cars and other vehicles

Matrimonial assets can also include debt and other financial liabilities.

Non-matrimonial assets can include:

• Anything inherited by one of the spouses during the marriage
• Anything received as a gift by one of the spouses during the marriage
• Anything one spouse had already owned before the marriage
• Any properties solely owned by one spouse that is not the family home
• Capital acquired through earnings or investments

However, it is important to remember that to remain as a non-matrimonial asset, the asset in question must be kept separate from the joint matrimonial ‘pot’. 

If, for example, one spouse sold something of value that they owned before getting married to pay for something that benefited the family, all monies raised by the sale would be classed as a matrimonial asset if the couple were to divorce.

Are non-matrimonial assets protected in a divorce?

The distinction between matrimonial and non- matrimonial assets was initially defined in the case of White and White which recorded that:

“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.”

However, despite the existence of such noted case law, it does not guarantee that all non-matrimonial assets will automatically be protected from the division of your assets if you divorce.  As will all decisions, their inclusion is determined on a case-by-case basis.

The best way to protect any non-matrimonial assets you may have is to enter into a formal legal agreement with your spouse that sets out exactly how all matrimonial and non-matrimonial assets would be treated if your relationship comes to an end.  If this agreement is reached before you marry it would be recorded in a prenuptial agreement.  If it is reached after you marry, it is called a postnuptial agreement.

In most cases, pre- and postnuptial agreements will be considered binding by the courts as long as they were freely entered into and not signed in obviously unfair circumstances, i.e. one signatory had been put under undue pressure or had signed without taking independent legal advice.

Alternatively, you could place specific non-matrimonial assets into a trust.  A trust gives a third party legal control of certain assets on behalf of their owner – the ‘beneficiary – for a defined period of time.  However, trusts are a complex area of law and require very specialist legal support.

The division of assets on divorce can be as contentious and they are complex, particularly when there is a dispute over whether specific assets should be treated as matrimonial or non-matrimonial.  If you are struggling to reach an agreement on the division of assets in your divorce or would an initial understanding of how your own assets are likely to be viewed by the court, please contact our experienced family law barristers today.