During divorce or separation, it’s important to distinguish between your matrimonial assets and your non-matrimonial assets, as it could make a difference to your Financial Settlement.
What’s the Difference?
Matrimonial assets are financial assets that you and/or your spouse acquire during the course of your marriage. This differs to non-matrimonial assets, which are financial assets acquired either before or after your marriage.
Matrimonial assets typically include things such as the family home, pensions and savings. It doesn’t really matter who put the money forward or who accumulated the wealth. When you’re married, the law in England and Wales considers that any assets you acquire also belong to your husband or wife. Therefore if you contribute towards a pension during your marriage, your spouse is entitled to a share of it.
Non-matrimonial assets typically include things like inheritance, family businesses and property purchased before the marriage or after separation.
Why Does it Matter?
Matrimonial and non-matrimonial assets matter when it comes to divorce and separation because you and your ex will need to divide your finances between you. The arrangement that you reach must be fair and reasonable to each person.
However, there may be some debate as to which assets should be included in the Financial Settlement. For example, one person may feel that the inheritance received from their Great Auntie Ruby 30 years ago should be ring-fenced.
So what should and shouldn’t be included in the marriage pot?
Matrimonial assets will, by their very nature, be shared out between you and your spouse during divorce. This means you’ll need to divide the finances that were acquired while you were married – even if the money came from your job, or from your family.
Matrimonial assets won’t necessarily be split 50/50. It really depends on the financial situation of each person. Essentially the law in England and Wales requires that each person receives a fair settlement that meets their financial needs. So if you need to give up a third of your pension pot to ensure your ex is provided for, that is what the Court will rule.
Non-matrimonial assets are a little more complicated. Often you can request that they be excluded from the Financial Settlement. But this request might not always be granted. This might be because the non-matrimonial asset was used somehow in your marriage. For instance, you used the inheritance from your Great Auntie Ruby as the deposit for the family home.
Or it might be that the matrimonial assets do not sufficiently provide for your ex, or the welfare of your children. If so, the Court can rule that non-matrimonial assets be included in the Financial Settlement.
Protecting Your Assets
If you’d like to protect your assets from a future Divorce Settlement, you can do so by putting a Pre-nuptial Agreement in place (or a Post-nuptial Agreement, if you’re already married).
Although nuptial agreements aren’t legally binding in England & Wales, the Courts will consider them seriously when deciding what assets should and shouldn’t be included in a Financial Settlement.