What is matrimonial property, and why is it important?

What is matrimonial property, and why is it important?

In a recent case the Court of Appeal had to consider whether a certain asset comprised ‘matrimonial property’. But what is matrimonial property, and why is it important?

The concept of ‘matrimonial property’ has its roots in the idea that marriage is a joint venture between the husband and the wife. Accordingly, they both have a shared interest in all assets that either or both of them generated during the course of the marriage. Those ‘matrimonial’ assets are thus available to be shared between them upon divorce.

But there may of course be other assets that belong to one party, but that were not generated by them during the course of the marriage. As we will see, these ‘non-matrimonial’ assets may not go into the ‘sharing pot’.

Inheritances and pre-marriage assets

So what kind of assets will be non-matrimonial?

There is no definitive list of all assets that will be considered to be ‘non-matrimonial’. In general, though, non-matrimonial assets will be those assets that were received or created either before or after the marriage, or were “gratuitously received within the partnership from an external source [which] has little to do with the endeavour of the partnership”.

It follows from this that the most common types of non-matrimonial property are assets acquired by one party prior to the marriage and inheritances (or other gifts).

Obviously, it is not unusual that one or both parties to a marriage will already have significant financial assets before the marriage takes place. Whether these will be counted as non-matrimonial will depend upon the circumstances of the case. For example, if the marriage was short then they are more likely to be considered non-matrimonial.

Inheritances are slightly different, in that they may be received during the course of the marriage (inheritances were one of the assets argued over in the Court of Appeal case, as we will see in a moment). Again, however, whether the inheritance will be treated as non-matrimonial will depend on the circumstances, including the nature of the inheritance.

One important thing to note about non-matrimonial property is that an asset that began as non-matrimonial may become matrimonial over time. For example, it may become mixed with matrimonial property, so that it becomes impossible to say what is matrimonial, and what is not. An asset that is kept entirely separate is more likely to be non-matrimonial.

In addition, non-matrimonial assets may increase in value during the marriage, and that increase may be considered to be matrimonial property.

Needs come first

So how are non-matrimonial assets treated by the court?

As indicated above, they may be left out of the pot of assets shared between the parties, so that they remain the property of the party that acquired them.

However, this is not a strict rule. The court will look at all of the circumstances of the case, and may decide that non-matrimonial assets should go into the pot.

The primary circumstance for this happening is where all of the assets, matrimonial and non-matrimonial, will be required to meet the financial needs of the parties, because the matrimonial assets alone are not sufficient to meet those needs. The effect of this of course is that non-matrimonial property is more likely to be an issue in higher-money cases, where the needs can be met out of matrimonial assets.

And what of that Court of Appeal case? Well, it was far too complicated to go into here, but suffice to say that the court did accept the arguments raised by both parties that certain assets, mainly inheritances, were non-matrimonial, and should therefore remain the property of the party who received them. It should be noted that this was very much a higher-money case, with the matrimonial assets, which were divided equally, totalling some £38 million.