We are often asked by a party in divorce proceedings whether “non-matrimonial” property will have to be shared with their spouse on divorce.
What is non-matrimonial property?
Non-matrimonial property is any asset from outside of the marriage. This includes any assets, gifts, inheritances acquired by a party before the marriage or after the marriage, and which has not been mingled during the course of the marriage.
Do I have to share non-matrimonial property on divorce?
Once there has been full and frank financial disclosure and it can be identified which of the assets are non-matrimonial property, the next step is to consider whether or not there would be enough in the matrimonial pot to meet the parties’ needs on divorce. If there is not, we would then need to determine how much from the non-matrimonial property is required to meet the needs of the party who does not hold the non-matrimonial property.
Non-matrimonial property can be divided if a spouse has financial needs which cannot be satisfied by the assets in the matrimonial pot. For example, if a spouse was unable to re-house after the divorce with the matrimonial assets and their housing needs were not satisfied, it may then be necessary to divide non-matrimonial property.
In the case of JL v SL (2015) the Judge, Mostyn J, stated that a claim to share non-matrimonial property (as opposed to having a sum awarded from it to meet needs) would be as “rare as a white leopard”.
Claire Rutter, Partner, commented: "In the Law Commission’s report (February 2014) it states that “The Courts’ approach at present is generally not to make orders requiring former spouses to share property acquired by gift or inheritance, or acquired before marriage or civil partnership, unless that property is required to meet financial needs” .Therefore, it is very unlikely that non-matrimonial property will be shared unless required for needs-however in many instances there are insufficient assets otherwise and needs will then take precedence .The extent to which such “external” assets will be utilised can then be a difficult issue and requires careful consideration."
Pre-Nuptial Agreement/Post-Nuptial Agreement to protect Non-Matrimonial property
A pre-nuptial agreement can be entered into prior to the marriage or a post-nuptial agreement following the marriage to protect assets including non-matrimonial property should the marriage break down.
Although pre-nuptial and post-nuptial agreements are not strictly legally binding in the UK, in the landmark case of Radmacher v Granatino (2010) the Supreme Court ruled that the Courts must now give appropriate weight to prenuptial agreements. Provided the correct steps are taken and the parties seek independent legal advice a pre-nuptial or post-nuptial agreement is likely to be upheld on divorce and can provide the necessary protection for parties who wish to preserve assets such as those acquired prior to the marriage or an inheritance.
At Ramsdens, we are accredited members of Resolution and expert family law specialists. If you would like more information on the issues raised in this article or any aspect of Family Law please do not hesitate to contact one of our friendly family law team to arrange a free 30 minute consultation. Call us free on 08000 147720, send us an email or text LAW to 67777 to book a free information session at any of our offices. We also offer early morning and late evening appointments across our offices